-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BRqdl01t44XApKTquCM5+AObYD3qAUkt8vUsSTRGv6gnRuGtfipkFw3KR33jtLFE gid930BiBPZkgiTO2+llMw== 0000891804-04-001247.txt : 20040607 0000891804-04-001247.hdr.sgml : 20040607 20040607172138 ACCESSION NUMBER: 0000891804-04-001247 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20040331 FILED AS OF DATE: 20040607 EFFECTIVENESS DATE: 20040607 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COLUMBIA FUNDS TRUST XI CENTRAL INDEX KEY: 0000809558 IRS NUMBER: 366851784 STATE OF INCORPORATION: MA FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: N-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-04978 FILM NUMBER: 04852424 BUSINESS ADDRESS: STREET 1: ONE FINANCIAL CENTER CITY: BOSTON STATE: MA ZIP: 02111 BUSINESS PHONE: 8003382550 MAIL ADDRESS: STREET 1: ONE FINANCIAL CENTER CITY: BOSTON STATE: MA ZIP: 02111 FORMER COMPANY: FORMER CONFORMED NAME: LIBERTY STEIN ROE FUNDS INVESTMENT TRUST DATE OF NAME CHANGE: 19991025 FORMER COMPANY: FORMER CONFORMED NAME: STEINROE INVESTMENT TRUST DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: STEINROE EQUITY TRUST DATE OF NAME CHANGE: 19891127 N-CSRS 1 file001.txt COLUMBIA FUNDS TRUST XI UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-4978 --------------------- Columbia Funds Trust XI ------------------------------------------------------------------------------ (Exact name of registrant as specified in charter) One Financial Center, Boston, Massachusetts 02111 - ------------------------------------------------------------------------------ (Address of principal executive offices) (Zip code) Vincent Pietropaolo, Esq. Columbia Management Group, Inc. One Financial Center Boston, MA 02111 - ------------------------------------------------------------------------------ (Name and address of agent for service) Registrant's telephone number, including area code: 1-617-772-3698 ------------------- Date of fiscal year end: September 30, 2004 ------------------ Date of reporting period: March 31, 2004 ----------------- Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles. A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. ss. 3507. ITEM 1. REPORTS TO STOCKHOLDERS. COLUMBIA DIVIDEND INCOME FUND Semiannual Report March 31, 2004 [photo of woman sitting and reading] [LOGO]: COLUMBIA FUNDS A MEMBER OF COLUMBIA MANAGEMENT GROUP Table of Contents Fund Profile ............................... 1 Performance Information .................... 2 Economic Update ............................ 3 Portfolio Managers' Report ................. 4 Financial Statements ....................... 6 Investment Portfolio .................... 7 Statement of Assets and Liabilities .....11 Statement of Operations .................12 Statement of Changes in Net Assets ......13 Notes to Financial Statements ...........16 Financial Highlights ....................21 Important Information About This Report ..........................27 Columbia Funds .............................28 Economic and market conditions change frequently. There is no assurance that the trends described in this report will continue or commence. NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE TO OUR FELLOW SHAREHOLDERS Columbia Dividend Income Fund DEAR SHAREHOLDER: We are pleased to let you know that FleetBoston Financial Corporation and Bank of America Corporation have merged, effective April 1, 2004. As a result of the merger, Columbia Management Group became part of the Bank of America family of companies. Looking ahead, we believe this merger will be a real benefit to our shareholders. Preserving and leveraging our strengths, the combined organization intends to deliver additional research and management capabilities, as well as new products to you. There are no immediate changes planned for fund names or customer service contacts. As always, we will provide you with updates at www.columbiafunds.com or through other communications, such as newsletters and shareholder reports. As you might know, on March 15, 2004, FleetBoston Financial announced an agreement in principle with the staff of the Securities and Exchange Commission ("SEC") and the New York Attorney General to settle charges involving market timing in Columbia Management mutual funds. (Bank of America came to a similar settlement in principle at the same time.) The agreement requires the final approval of the SEC. This action reflects our full cooperation with the investigation and our strong wish to put this regrettable situation behind us. Columbia Management has taken and will continue to take steps to strengthen policies, procedures and oversight to curb frequent trading of Columbia fund shares. We want you to know that all of the members of your fund's Board of Trustees are independent of the fund's advisor and its affiliates. In addition, the board has been energetic over the past year in strengthening its capacity to oversee the Columbia funds. Recently, the Board of Trustees: o APPOINTED A CHIEF COMPLIANCE OFFICER OF THE COLUMBIA FUNDS, WHO REPORTS DIRECTLY TO EACH FUND'S AUDIT COMMITTEE. TRUSTEES WERE ALSO ASSIGNED TO FOUR SEPARATE INVESTMENT OVERSIGHT COMMITTEES, EACH DEDICATED TO MONITORING PERFORMANCE OF INDIVIDUAL FUNDS. o VOTED TO DOUBLE THE REQUIRED INVESTMENT BY EACH TRUSTEE IN THE COLUMBIA FUNDS -- TO FURTHER ALIGN THE INTERESTS OF THE TRUSTEES WITH THOSE OF OUR FUND SHAREHOLDERS. AT THE SAME TIME, NEW POLICIES WERE INSTITUTED REQUIRING ALL INVESTMENT PERSONNEL AND TRUSTEES TO HOLD THEIR COLUMBIA FUND SHARES FOR A MINIMUM OF ONE YEAR (UNLESS EXTRAORDINARY CIRCUMSTANCES WARRANT AN EXCEPTION TO BE GRANTED BY SENIOR EXECUTIVES OF THE ADVISOR FOR INVESTMENT PERSONNEL AND BY A DESIGNATED COMMITTEE FOR THE BOARD). Both your fund's trustees and Columbia Management are committed to serving the interests of our shareholders, and we will continue to work hard to help you achieve your financial goals. In the pages that follow, you'll find valuable information about the economic environment during the period and the performance of your Columbia fund. These discussions are followed by financial statements for your fund. We hope that you will take time to read this report and discuss it with your financial advisor if you have any questions. As always, thank you for choosing Columbia funds. It is a privilege to play a role in your financial future. Sincerely, /s/ Thomas C. Theobald /s/ J. Kevin Connaughton Thomas C. Theobald J. Kevin Connaughton Chairman, Board of Trustees President, Columbia Funds J. Kevin Connaughton was named president of Columbia Funds on February 27, 2004. Fund Profile Columbia Dividend Income Fund The information below gives you a snapshot of your fund at the end of the reporting period. Your fund is actively managed and the composition of its portfolio will change over time. Top 10 holdings as of 03/31/04 (%) - ---------------------------------------------- Citigroup 5.1 Exxon Mobil 3.4 ConocoPhillips 3.1 BP PLC 3.1 US Bancorp 3.1 Verizon Communications 2.7 JP Morgan Chase 2.5 Public Service Enterprise Group 2.4 National City 2.4 SBC Communications 2.3 ============================================== Top 5 sectors as of 03/31/04 (%) - ---------------------------------------------- Financials 32.0 Energy 14.0 Industrials 10.5 Consumer staples 8.7 Telecommunication services 7.0 ============================================== Sector breakdown and portfolio holdings are calculated as a percentage of net assets. (C)2004 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. The Morningstar Style Box(TM) reveals a fund's investment strategy. For equity funds the vertical axis shows the market capitalization of the stocks owned and the horizontal axis shows investment style (value, blend or growth). For fixed-income funds the vertical axis shows the average credit quality of the bonds owned, and the horizontal axis shows interest rate sensitivity as measured by a bond's duration (short, intermediate or long). All of these numbers are drawn from the data most recently provided by the fund and entered into Morningstar's database as of month-end. Although the data is gathered from reliable sources, Morningstar cannot guarantee completeness and accuracy. As of 03/31/2004. [SIDEBAR DATA]: Summary o For the six-month period that ended March 31, 2004, the fund's class A shares returned 15.26% without sales charge. o The fund was slightly ahead of the average return of its peer group, the Lipper Equity Income Funds Category. The fund's return was below its benchmark, the Russell 1000 Value Index. o A favorable environment for stocks helped the fund generate a double-digit return. The move toward dividend-paying securities further enhanced performance, especially during the second half of the reporting period. Class A shares Russell 1000 Value Index 15.26% 17.65% artwork: arrow up artwork: arrow up Objective Seeks current income and capital appreciation Total net assets $199.8 million Morningstar style box Style/Value Size/Large 1 Performance Information Columbia Dividend Income Fund Value of a $10,000 investment 03/04/98 - 03/31/04
Class A shares Class A shares Russell 1000 without sales charge with sales charge Value Index S&P 500 Index 03/1998 $10,000 $ 9,425 $10,000 $10,000 10,230 9,642 10,565 10,530 10,170 9,585 10,636 10,636 9,760 9,199 10,478 10,453 9,635 9,081 10,612 10,878 9,425 8,883 10,426 10,763 7,864 7,412 8,874 9,206 8,555 8,063 9,384 9,796 9,625 9,071 10,111 10,593 9,835 9,269 10,582 11,235 10,262 9,672 10,942 11,882 10,302 9,710 11,030 12,379 10,072 9,492 10,874 11,994 10,489 9,885 11,099 12,473 11,351 10,698 12,136 12,956 11,431 10,774 12,002 12,650 11,693 11,021 12,350 13,352 11,251 10,604 11,988 12,936 10,759 10,141 11,544 12,872 10,097 9,516 11,141 12,520 9,936 9,365 11,783 13,312 9,885 9,317 11,691 13,582 10,266 9,676 11,747 14,382 9,876 9,308 11,364 13,660 9,704 9,146 10,519 13,402 11,088 10,450 11,803 14,713 11,191 10,548 11,666 14,270 11,409 10,753 11,788 13,978 10,965 10,335 11,250 14,323 10,839 10,216 11,390 14,099 11,460 10,801 12,024 14,975 11,481 10,821 12,134 14,184 12,033 11,341 12,433 14,125 11,665 10,994 11,971 13,012 12,549 11,828 12,571 13,075 13,644 12,859 12,619 13,540 13,227 12,467 12,268 12,305 12,856 12,117 11,835 11,525 13,677 12,891 12,415 12,420 13,856 13,060 12,694 12,503 13,565 12,785 12,413 12,200 13,530 12,752 12,386 12,080 12,804 12,067 11,890 11,324 11,590 10,923 11,053 10,409 11,935 11,249 10,958 10,608 12,971 12,225 11,594 11,421 13,555 12,775 11,868 11,522 13,135 12,379 11,777 11,353 13,160 12,403 11,795 11,134 13,737 12,947 12,353 11,553 13,502 12,726 11,930 10,853 13,317 12,552 11,989 10,773 12,168 11,468 11,301 10,006 11,081 10,444 10,250 9,226 11,218 10,573 10,328 9,286 9,759 9,198 9,180 8,277 10,564 9,956 9,860 9,005 11,237 10,590 10,481 9,535 10,759 10,140 10,026 8,976 10,449 9,848 9,783 8,741 9,879 9,311 9,522 8,609 9,882 9,313 9,538 8,693 10,616 10,005 10,378 9,409 11,449 10,791 11,048 9,905 11,700 11,027 11,186 10,032 11,612 10,944 11,353 10,208 11,775 11,098 11,530 10,408 11,611 10,943 11,417 10,297 12,037 11,345 12,116 10,880 12,125 11,428 12,281 10,976 13,028 12,279 13,037 11,551 13,179 12,422 13,266 11,763 13,469 12,695 13,550 11,927 03/2004 13,379 12,610 13,429 11,742
All results shown assume reinvestment of distributions. The graph and the table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or redemption of fund shares. The Russell 1000 Value Index measures the performance of those Russell 1000 companies with lower price-to-book ratios and lower forecasted growth values. The Standard & Poor's (S&P) 500 Index is an unmanaged index that tracks the performance of 500 widely held, large-capitalization US stocks. The S&P 500 Index was the fund's previous benchmark. Unlike mutual funds, indices are not investments, do not incur fees or expenses and are not professionally managed. It is not possible to invest directly in an index. Securities in the fund may not match those in an index. Index information is from March 4, 1998. Average annual total return as of 03/31/04 (%)
- ------------------------------------------------------------------------------------------------------------------- Share class A B C G T Z =================================================================================================================== Inception 11/25/02 11/25/02 11/25/02 03/04/98 03/04/98 03/04/98 =================================================================================================================== Sales charge without with without with without with without with without with without =================================================================================================================== 6-month (cumulative) 15.26 8.69 14.74 9.74 14.75 13.75 14.73 9.73 15.20 8.63 15.45 1-year 35.44 27.72 34.20 29.20 34.24 33.24 34.34 29.34 35.31 27.60 35.80 5-year 4.99 3.75 4.20 3.86 4.18 4.18 4.17 3.66 4.97 3.73 5.46 Life 4.91 3.89 4.23 4.10 4.22 4.22 4.21 4.07 4.89 3.87 5.39 ===================================================================================================================
All results shown assume reinvestment of distributions. The "with sales charge" returns include the maximum 5.75% sales charge for class A shares, the appropriate class B contingent deferred sales charge for the holding period after purchase as follows: through first year - 5%, second year - 4%, third year - - 3%, fourth year - 3%, fifth year - 2%, sixth year - 1%, thereafter - 0%, and the class C contingent deferred sales charge of 1% for the first year only. For class G shares, the contingent deferred sales charge for the holding period after purchase is as follows: through the first year - 5%, second year - 4%, third year - 4%, fourth year - 4%, fifth year - 3%, sixth year - 2%, seventh year - 1%, thereafter - 0%. For the class T shares, the "with sales charge" returns include the maximum 5.75% sales charge. Performance for different share classes will vary based on differences in sales charges and fees associated with each class. Performance results reflect any voluntary waivers or reimbursement of fund expenses by the advisor or its affiliates. Absent these waivers or reimbursement arrangements, performance results would have been lower. Class A, class B and class C are newer classes of shares. Their performance information includes returns of the fund's class T shares (for class A) and class G shares (for class B and class C) for periods prior to their inception. The returns shown for class T and G shares include the returns of Retail A Shares (for class T) and Retail B Shares (for class G) of the Galaxy fund for periods prior to November 25, 2002, the date on which class A, B and C shares were initially offered by the Fund and the date the Galaxy fund merged into the existing fund. The returns have not been restated to reflect any differences in expenses between the predecessor shares and the newer classes of shares. If differences in expenses had been reflected, the returns shown for periods prior to the inception of the newer classes of shares would have been lower. The returns for class G and class T shares include the returns of Retail A Shares (for class T shares) and Retail B Shares (for class G shares) of the Galaxy fund for periods prior to November 25, 2002, the date on which class T and class G shares were initially offered by the fund. Retail A Shares and Retail B Shares of the Galaxy fund were initially offered on March 4, 1998. The returns for class Z shares include returns of Trust shares of the Galaxy fund for periods prior to November 25, 2002, the date on which class Z shares were initially offered by the fund. Trust Shares were initially offered by the Galaxy fund on March 4, 1998. [SIDEBAR DATA]: Performance of a $10,000 investment 03/04/98 - 03/31/04 ($) - ---------------------------------------------- sales charge: without with ============================================== Class A 13,379 12,610 Class B 12,863 12,763 Class C 12,850 12,850 Class G 12,846 12,746 Class T 13,365 12,597 Class Z 13,753 n/a ============================================== Performance data quoted represents past performance and current performance may be lower or higher. Past performance is no guarantee of future results. The investment return and principal value will fluctuate so that shares may be worth more or less than the original cost. Please visit www.columbiafunds.com for daily and most recent month-end performance updates. 2 Economic Update Columbia Dividend Income Fund The US economy moved ahead during the six-month reporting period that began October 1, 2003 and ended March 31, 2004. A burst of strength in the third quarter of 2003, for which annualized GDP was reported at 8.2%, was followed by fourth quarter growth of 4.1%. GDP growth for first quarter of 2004 was 4.2% Although job growth was slow to catch on, the economy showed signs of improvement on all fronts. Consumer spending rose as a sizeable package of tax cuts, implemented in 2003, gave disposable income a boost. Low interest rates spurred a new round of mortgage refinancing late in the period, which further enhanced household income. Consumer confidence slipped late in the period as the outlook for the labor market remained clouded despite a significant pick-up in the number of new jobs added to the labor market in March. Nevertheless, housing and retail sales showed steady gains throughout the period. After two years of holding back on spending, the business sector began to show signs of improvement late in 2003. Business spending on technology-related items rose as corporate profits improved. Spending on capital equipment also picked up. US STOCKS HEADED HIGHER The US stock market snapped a three-year losing streak in 2003, but its rate of return slowed early in 2004 in response to a mixed job outlook and renewed fears concerning terrorism. The S&P 500 Index returned 14.08% for this six-month period as most sectors of the market continued to benefit from rising corporate profits. Small company stocks were even stronger. The Russell 2000 Index, which measures small-cap stock performance, returned 21.69% for the period. BONDS DELIVERED RESPECTABLE GAINS A growing economy continued to boost investor enthusiasm for high-yield bonds, which led the fixed-income markets during the period. The six-month return for the Merrill Lynch US High Yield, Cash Pay Index was 8.21%. However, high-yield bonds slipped in the second half of this reporting period. US Treasury bonds gained ground and other segments of the bond market also delivered respectable gains as interest rates declined. The Lehman Brothers Aggregate Bond Index, a broad measure of investment-grade bond performance, returned 2.98%. However, money market fund yields remained below 1%, as the Federal Reserve kept short-term interest rates at their historical lows. [SIDEBAR DATA]: Summary For the six-month period ended March 31, 2004 o The US stock market benefited from a pick-up in economic growth and an increase in corporate profits. Small-cap stocks led the way. The S&P 500 Index and the Russell 2000 Index posted double-digit returns this period. S&P 500 Index Russell Index 14.08% 21.69% artwork: arrow up artwork: arrow up o Performance in the fixed-income universe was led by high-yield bonds. As measured by the Merrill Lynch US High Yield, Cash Pay Index, this sector posted a return more than five percentage points higher than the return for investment-grade bonds, as measured by the Lehman Brothers Aggregate Bond Index. Merrill Lynch Index Lehman Index 8.21% 2.98% artwork: arrow up artwork: arrow up The S&P 500 Index is an unmanaged index that tracks the performance of 500 widely held, large capitalization US stocks. The Russell 2000 Index is an unmanaged market capitalization weighted index that tracks the performance of 2000 small companies. The Merrill Lynch US High Yield, Cash Pay Index is an unmanaged index that tracks the performance of non-investment-grade corporate bonds. The Lehman Brothers Aggregate Bond Index is a market value-weighted index that tracks fixed-rate, publicly placed, dollar-denominated, and non-convertible investment grade debt issues. 3 Portfolio Managers' Report Columbia Dividend Income Fund For the six-month period ended March 31, 2004, class A shares of Columbia Dividend Income Fund returned 15.26% without sales charge. The fund's performance was lower than its benchmark, the Russell 1000 Value Index, which returned 17.65% for the same period. The fund was slightly ahead of the average return of the Lipper Equity Income Funds Category, which was 15.02%.(1) A favorable environment for stocks helped the fund generate double-digit performance. A shift in strategy to emphasize dividends as a component of total return further aided performance, especially in the final months of the period. THE FUND'S TIMELY TRANSFORMATION As the period began, the fund was in the process of redefining its investment approach. Effective October 27, 2003, the Board of Trustees changed the fund's investment goal to seek current income and capital appreciation. In the first two months of the period, the move toward dividend-paying securities caused the fund to underperform. Investors were more interested in speculative companies and their turnaround potential in an economic recovery. This investment theme was dominant throughout most of 2003. However, by December 1, at which time the fund's transformation was complete, investors began to shift away from these lower-quality companies, and the relative performance of high quality, dividend-paying stocks improved dramatically. The March dividend was increased from $0.022 to $0.061 for Class A shares. RESHAPING THE FUND During the period, we sold our positions in non dividend-paying stocks such as Accenture and Celestica. We used the proceeds to invest in companies with the ability to generate high levels of free cash flow. Cash flow is the amount of net cash a company generates, including depreciation, but after subtracting taxes. This orientation led us to the tobacco group, where we bought Altria Group (the former Philip Morris), R.J. Reynolds Tobacco Holdings and UST, each of which yielded over 5% during the period. Among our energy holdings, we cut back on oil service stocks in favor of integrated oil companies such as Exxon Mobil and British Petroleum. We bolstered our positions in insurance stocks, which typically feature high dividend yields and relatively low valuations. We also diversified our holdings in real estate investment trusts (REITs) away from office properties and into residential and mixed REITs such as AvalonBay Communities, Vornado Realty Trust and Kimco Realty. BENEFITING FROM THE NEW TAX LAW The fund benefited from corporate America's increasing comfort with higher dividend payouts. When taxes on corporate dividends were 1 Lipper Inc., a widely respected data provider in the industry, calculates an average total return for mutual funds with similar investment objectives as those of the fund. [SIDEBAR DATA]: Net asset value per share as of 03/31/04 ($) - ---------------------------------------------- Class A 10.56 Class B 10.35 Class C 10.34 Class G 10.34 Class T 10.56 Class Z 10.56 ============================================== Distributions declared per share as of 10/01/03 - 03/31/04 ($) - ---------------------------------------------- Class A 0.11 Class B 0.07 Class C 0.07 Class G 0.06 Class T 0.10 Class Z 0.13 ============================================== Holdings discussed in this report as of 03/31/04 (%) - ---------------------------------------------- Altria Group 1.5 R.J. Reynolds Tobacco Holdings 0.7 UST 0.3 Exxon Mobil 3.4 BP PLC 3.1 AvalonBay Communities 0.5 Vornado Realty Trust 0.6 Kimco Realty 0.6 PepsiCo 1.1 Waste Management 2.1 ============================================== Your fund is actively managed and the composition of its portfolio will change over time. Information provided is calculated as a percentage of net assets. 4 Columbia Dividend Income Fund reduced sharply in the summer of 2003, many companies concluded that increasing their dividends represented a more effective use of capital than repurchasing their shares. Many major companies, including fund holdings PepsiCo and Waste Management, soon announced significant increases in their payout levels. We believe that these dividend increases by major firms are part of a long-term trend toward higher payouts. Companies in the S&P 500 now pay out, on average, only 34% of their earnings as dividends. We would not be surprised to see a return to the historical range of 45-50%. PREPARING FOR THE NEXT STAGE OF THE ECONOMIC CYCLE Investors should be aware that the economic recovery may be entering a new phase. During the past several quarters, corporate margins have expanded rapidly, as businesses have increased their production and built back their inventories from depleted levels. At this point, however, we doubt that margins have the potential to go much higher, suggesting that the rate of earnings growth in the next few quarters may not match that of the year gone by. In such an environment, dividends could assume greater importance as a component of total return, a setting that is potentially favorable to the fund. [PHOTO]: Scott Davis Scott Davis has co-managed Columbia Dividend Income Fund since November 2001 and has been with the advisor and its predecessors since 1985. /s/ Scott Davis [PHOTO]: Richard Dahlberg Richard Dahlberg, CFA, has co-managed the fund since October 2003 and has been with the advisor since September 2003. /s/ Richard Dahlberg An investment in the fund offers the potential for long-term growth, but also involves certain risks, including stock market fluctuations due to economic and business developments. Value stocks are securities of companies that may have experienced adverse business or industry developments or may be subject to special risks that have caused the stocks to be out of favor. If the advisor's assessment of a company's prospects is wrong, the price of its stock may not approach the value the advisor has placed on it. [SIDEBAR]: Going forward, we believe that dividends could assume greater importance as a component of total return, a setting that could be potentially favorable to the fund. 5 FINANCIAL STATEMENTS March 31, 2004 Columbia Dividend Income Fund
A guide to understanding your fund's financial statements -------------------------------------------------------------------------------------- Investment Portfolio The investment portfolio details all of the fund's holdings and their market value as of the last day of the reporting period. Portfolio holdings are organized by type of asset, industry, country or geographic region (if applicable) to demonstrate areas of concentration and diversification. -------------------------------------------------------------------------------------- Statement of Assets and Liabilities This statement details the fund's assets, liabilities, net assets and share price for each share class as of the last day of the reporting period. Net assets are calculated by subtracting all the fund's liabilities (including any unpaid expenses) from the total of the fund's investment and non-investment assets. The share price for each class is calculated by dividing net assets for that class by the number of shares outstanding in that class as of the last day of the reporting period. -------------------------------------------------------------------------------------- Statement of Operations This statement details income earned by the fund and the expenses accrued by the fund during the reporting period. The Statement of Operations also shows any net gain or loss the fund realized on the sales of its holdings during the period, as well as any unrealized gains or losses recognized over the period. The total of these results represents the fund's net increase or decrease in net assets from operations. -------------------------------------------------------------------------------------- Statement of Changes in Net Assets This statement demonstrates how the fund's net assets were affected by its operating results, distributions to shareholders and shareholder transactions (e.g., subscriptions, redemptions and dividend reinvestments) during the reporting period. The Statement of Changes in Net Assets also details changes in the number of shares outstanding. -------------------------------------------------------------------------------------- Notes to Financial Statements These notes disclose the organizational background of the fund, its significant accounting policies (including those surrounding security valuation, income recognition and distributions to shareholders), federal tax information, fees and compensation paid to affiliates and significant risks and contingencies. -------------------------------------------------------------------------------------- Financial Highlights The financial highlights demonstrate how the fund's net asset value per share was affected by the fund's operating results. The financial highlights table also discloses the classes' performance and certain key ratios (e.g., class expenses and net investment income as a percentage of average net assets).
6 INVESTMENT PORTFOLIO March 31, 2004 (unaudited) Columbia Dividend Income Fund
Common Stocks - 98.2% CONSUMER DISCRETIONARY - 6.2% Shares Value ($) - -------------------------------------------------------------------------------------------------------------------------------- Automobiles - 1.2% General Motors Corp. 50,000 2,355,000 Automobiles Total 2,355,000 ------------------------------------------------------------------------------ Hotels, Restaurants & Leisure - 1.8% Harrah's Entertainment, Inc. 30,000 1,646,700 Wendy's International, Inc. 48,000 1,953,120 Hotels, Restaurants & Leisure Total 3,599,820 ------------------------------------------------------------------------------ Leisure Equipment & Products - 0.9% Mattel, Inc. 100,000 1,844,000 Leisure Equipment & Products Total 1,844,000 ------------------------------------------------------------------------------ Media - 1.8% Belo Corp., Class A 35,000 971,600 Clear Channel Communications, Inc. 12,000 508,200 McGraw-Hill Companies, Inc. 26,000 1,979,640 Media Total 3,459,440 ------------------------------------------------------------------------------ Specialty Retail - 0.5% Limited Brands 52,000 1,040,000 Specialty Retail Total 1,040,000 ------------ CONSUMER DISCRETIONARY TOTAL 12,298,260 CONSUMER STAPLES - 8.7% - -------------------------------------------------------------------------------------------------------------------------------- Beverages - 1.1% PepsiCo, Inc. 42,000 2,261,700 Beverages Total 2,261,700 ------------------------------------------------------------------------------ Food Products - 2.0% ConAgra Foods, Inc. 148,000 3,987,120 Food Products Total 3,987,120 ------------------------------------------------------------------------------ Household Products - 3.1% Clorox Co. 60,000 2,934,600 Kimberly-Clark Corp. 52,000 3,281,200 Household Products Total 6,215,800 ------------------------------------------------------------------------------ Tobacco - 2.5% Altria Group, Inc. 54,000 2,940,300 R.J. Reynolds Tobacco Holdings, Inc. 24,000 1,452,000 UST, Inc. 14,000 505,400 Tobacco Total 4,897,700 ------------ CONSUMER STAPLES TOTAL 17,362,320 ENERGY - 14.0% - -------------------------------------------------------------------------------------------------------------------------------- Energy Equipment & Services - 1.2% Halliburton Co. 80,000 2,431,200 Energy Equipment & Services Total 2,431,200 ------------------------------------------------------------------------------ Oil & Gas - 12.8% BP PLC, ADR 122,000 6,246,400 ChevronTexaco Corp. 48,000 4,213,440 ConocoPhillips 90,000 6,282,900 Exxon Mobil Corp. 164,000 6,820,760 Royal Dutch Petroleum Co., N.Y. Registered Shares 40,000 1,903,200 Oil & Gas Total 25,466,700 ------------ ENERGY TOTAL 27,897,900 See notes to investment portfolio. 7 March 31, 2004 (unaudited) Columbia Dividend Income Fund Common Stocks - (continued) FINANCIALS - 32.0% Shares Value ($) - -------------------------------------------------------------------------------------------------------------------------------- Capital Markets - 4.8% Bank of New York Co., Inc. 78,000 2,457,000 Eaton Vance Corp. 26,000 991,120 Federated Investors, Inc., Class B 32,000 1,005,760 J.P. Morgan Chase & Co. 120,000 5,034,000 Capital Markets Total 9,487,880 ------------------------------------------------------------------------------ Commercial Banks - 8.5% National City Corp. 132,000 4,696,560 U.S. Bancorp 225,000 6,221,250 Wachovia Corp. 52,000 2,444,000 Wells Fargo & Co. 64,000 3,626,880 Commercial Banks Total 16,988,690 ------------------------------------------------------------------------------ Consumer Finance - 0.9% MBNA Corp. 68,000 1,878,840 Consumer Finance Total 1,878,840 ------------------------------------------------------------------------------ Diversified Financial Services - 5.1% Citigroup, Inc. 198,000 10,236,600 Diversified Financial Services Total 10,236,600 ------------------------------------------------------------------------------ Insurance - 7.1% Chubb Corp. 40,000 2,781,600 Lincoln National Corp. 94,000 4,448,080 Marsh & McLennan Companies, Inc. 29,000 1,342,700 Travelers Property Casualty Corp., Class B 150,000 2,590,500 Willis Group Holdings Ltd. 30,000 1,116,000 XL Capital Ltd., Class A 26,000 1,977,040 Insurance Total 14,255,920 ------------------------------------------------------------------------------ Real Estate - 4.1% Archstone-Smith Trust, REIT 40,000 1,180,400 AvalonBay Communities, Inc., REIT 20,000 1,071,600 Equity Office Properties Trust, REIT 125,000 3,611,250 Kimco Realty Corp., REIT 22,000 1,121,560 Vornado Realty Trust, REIT 20,000 1,209,600 Real Estate Total 8,194,410 ------------------------------------------------------------------------------ Thrifts & Mortgage Finance - 1.5% Fannie Mae 40,000 2,974,000 Thrifts & Mortgage Finance Total 2,974,000 ------------ FINANCIALS TOTAL 64,016,340 HEALTH CARE - 6.0% - -------------------------------------------------------------------------------------------------------------------------------- Health Care Providers & Services - 1.5% Aetna, Inc. 34,000 3,050,480 Health Care Providers & Services Total 3,050,480 ------------------------------------------------------------------------------ Pharmaceuticals - 4.5% Abbott Laboratories 50,000 2,055,000 Bristol-Myers Squibb Co. 86,000 2,083,780 Merck & Co., Inc. 42,000 1,855,980 Pfizer, Inc. 86,000 3,014,300 Pharmaceuticals Total 9,009,060 ------------ HEALTH CARE TOTAL 12,059,540 See notes to investment portfolio. 8 March 31, 2004 (unaudited) Columbia Dividend Income Fund Common Stocks - (continued) INDUSTRIALS - 10.5% Shares Value ($) - -------------------------------------------------------------------------------------------------------------------------------- Aerospace & Defense - 4.4% Boeing Co. 24,000 985,680 Goodrich Corp. 78,000 2,189,460 Honeywell International, Inc. 88,000 2,978,800 United Technologies Corp. 30,000 2,589,000 Aerospace & Defense Total 8,742,940 ------------------------------------------------------------------------------ Building Products - 1.0% Masco Corp. 70,000 2,130,800 Building Products Total 2,130,800 ------------------------------------------------------------------------------ Commercial Services & Supplies - 2.1% Waste Management, Inc. 140,000 4,225,200 Commercial Services & Supplies Total 4,225,200 ------------------------------------------------------------------------------ Industrial Conglomerates - 1.9% Textron, Inc. 70,000 3,720,500 Industrial Conglomerates Total 3,720,500 ------------------------------------------------------------------------------ Machinery - 1.1% Deere & Co. 32,000 2,217,920 Machinery Total 2,217,920 ------------ INDUSTRIALS TOTAL 21,037,360 INFORMATION TECHNOLOGY - 4.1% - -------------------------------------------------------------------------------------------------------------------------------- Communications Equipment - 1.4% Nokia Oyj, ADR 140,000 2,839,200 Communications Equipment Total 2,839,200 ------------------------------------------------------------------------------ Computers & Peripherals - 0.8% Diebold, Inc. 32,000 1,539,840 Computers & Peripherals Total 1,539,840 ------------------------------------------------------------------------------ IT Services - 1.9% Automatic Data Processing, Inc. 90,000 3,780,000 IT Services Total 3,780,000 ------------ INFORMATION TECHNOLOGY TOTAL 8,159,040 MATERIALS - 3.9% - -------------------------------------------------------------------------------------------------------------------------------- Chemicals - 2.3% Air Products & Chemicals, Inc. 44,000 2,205,280 E.I. du Pont de Nemours & Co. 56,000 2,364,320 Chemicals Total 4,569,600 ------------------------------------------------------------------------------ Paper & Forest Products - 1.6% MeadWestvaco Corp. 70,000 1,980,300 Weyerhaeuser Co. 18,000 1,179,000 Paper & Forest Products Total 3,159,300 ------------ MATERIALS TOTAL 7,728,900 TELECOMMUNICATION SERVICES - 7.0% - -------------------------------------------------------------------------------------------------------------------------------- Diversified Telecommunication Services - 7.0% BellSouth Corp. 140,000 3,876,600 SBC Communications, Inc. 190,000 4,662,600 Verizon Communications, Inc. 150,000 5,481,000 Diversified Telecommunication Services Total 14,020,200 ------------ TELECOMMUNICATION SERVICES TOTAL 14,020,200 UTILITIES - 5.8% - -------------------------------------------------------------------------------------------------------------------------------- Electric Utilities - 3.5% Consolidated Edison, Inc. 100,000 4,410,000 TXU Corp. 90,000 2,579,400 Electric Utilities Total 6,989,400 ------------------------------------------------------------------------------ See notes to investment portfolio. 9 March 31, 2004 (unaudited) Columbia Dividend Income Fund Common Stocks - (continued) UTILITIES - (continued) Shares Value ($) - -------------------------------------------------------------------------------------------------------------------------------- Multi-Utilities & Unregulated Power - 2.3% Public Service Enterprise Group, Inc. 100,000 4,698,000 Multi-Utilities & Unregulated Power Total 4,698,000 ------------ UTILITIES TOTAL 11,687,400 ------------ TOTAL COMMON STOCKS (Cost of $176,851,662) 196,267,260 Preferred Stock - 1.0% MATERIALS - 1.0% - -------------------------------------------------------------------------------------------------------------------------------- Metals & Mining - 1.0% Freeport-McMoRan Copper & Gold, Inc., 5.500% (a) (Cost of $2,000,000) 2,000 1,952,500 Short-Term Obligation - 0.2% Par($) - -------------------------------------------------------------------------------------------------------------------------------- Repurchase agreement with State Street Bank & Trust Co., dated 03/31/04, due 04/01/04 at 0.960%, collateralized by a U.S. Treasury Bond maturing 11/15/21, market value of $457,085 (repurchase proceeds $447,012) (Cost of $447,000) 447,000 447,000 Total Investments - 99.4% (Cost of $179,298,662) (b) 198,666,760 Other Assets & Liabilities, Net - 0.6% 1,117,387 Net Assets - 100.0% 199,784,147
NOTES TO INVESTMENT PORTFOLIO: (a) This security is exempt from registration under Rule 144A of the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. At March 31, 2004, the value of this security amounted to $1,952,500, which represents 1.0% of net assets. (b) Cost for both financial statement and federal income tax purposes is the same. ACRONYM NAME ------- ---- ADR American Depositary Receipt REIT Real Estate Investment Trust See notes to financial statements. 10 STATEMENT OF ASSETS AND LIABILITIES March 31, 2004 (unaudited) Columbia Dividend Income Fund
($) - -------------------------------------------------------------------------------------------------------------------------------- Assets: Investments, at cost 179,298,662 ------------- Investments, at value 198,666,760 Cash 2,000,731 Receivable for: Investments sold 828,901 Fund shares sold 782,904 Interest 12 Dividends 400,606 Deferred Trustees' compensation plan 13,235 Other assets 51,941 ------------- Total Assets 202,745,090 ------------------------------------------------------------------------------ Liabilities: Payable for: Investments purchased 1,892,559 Fund shares repurchased 793,400 Investment advisory fee 127,247 Administration fee 10,950 Transfer agent fee 76,711 Pricing and bookkeeping fees 1,121 Trustees' fees 123 Custody fee 6,496 Distribution and service fees 39,101 Deferred Trustees' fees 13,235 -------------- Total Liabilities 2,960,943 Net Assets 199,784,147 ------------------------------------------------------------------------------ Composition of Net Assets: Paid-in capital 216,325,123 Overdistributed net investment income (255,946) Accumulated net realized loss (35,653,128) Net unrealized appreciation on investments 19,368,098 Net Assets 199,784,147 ------------------------------------------------------------------------------ Class A: Net assets 5,959,196 Shares outstanding 564,400 Net asset value per share 10.56(a) Maximum offering price per share ($10.56/0.9425) 11.20(b) ------------------------------------------------------------------------------ Class B: Net assets 5,050,438 Shares outstanding 487,733 Net asset value and offering price per share 10.35(a) ------------------------------------------------------------------------------ Class C: Net assets 1,310,799 Shares outstanding 126,715 Net asset value and offering price per share 10.34(a) ------------------------------------------------------------------------------ Class G: Net assets 7,945,488 Shares outstanding 768,060 Net asset value and offering price per share 10.34(a) ------------------------------------------------------------------------------ Class T: Net assets 104,790,681 Shares outstanding 9,922,187 Net asset value per share 10.56(a) Maximum offering price per share ($10.56/0.9425) 11.20(b) ------------------------------------------------------------------------------ Class Z: Net assets 74,727,545 Shares outstanding 7,076,942 Net asset value, offering and redemption price per share 10.56
(a) Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. (b) On sales of $50,000 or more the offering price is reduced. See notes to financial statements. 11 STATEMENT OF OPERATIONS For the Six Months Ended March 31, 2004 (unaudited) Columbia Dividend Income Fund
($) - -------------------------------------------------------------------------------------------------------------------------------- Investment Income: Dividends 2,995,006 Interest 5,511 ------------ Total Investment Income (net of foreign taxes withheld of $17,536) 3,000,517 ------------------------------------------------------------------------------ Expenses: Investment advisory fee 729,380 Administration fee 65,158 Distribution fee: Class B 9,635 Class C 2,034 Class G 29,747 Service fee: Class A 2,750 Class B 3,211 Class C 676 Class G 13,729 Shareholder service fee - Class T 154,258 Transfer agent fee: Class A 2,504 Class B 2,902 Class C 621 Class G 14,292 Class T 135,737 Class Z 72,275 Pricing and bookkeeping fees 21,169 Trustees' fees 5,250 Custody fee 9,566 Other expenses 61,113 Non-recurring costs (See Note 7) 1,357 Costs asssumed by Investment Advisor (See Note 7) (1,357) ------------ Total Expenses 1,336,007 Fees waived by Transfer Agent: Class A (107) Class B (115) Class C (27) Class G (281) Class T (5,883) Class Z (6,347) Custody earnings credit (112) ------------ Net Expenses 1,323,135 ------------ Net Investment Income 1,677,382 ------------------------------------------------------------------------------ Net Realized and Unrealized Net realized loss on investments (3,322,120) Gain (Loss) on Investments: Net change in unrealized appreciation/depreciation on investments 28,933,017 Net Gain 25,610,897 Net Increase in Net Assets from Operations 27,288,279
See notes to financial statements. 12 STATEMENT OF CHANGES IN NET ASSETS Columbia Dividend Income Fund
(unaudited) Six Months Period Ended Ended Year Ended March 31, September 30, October 31, INCREASE (DECREASE) IN NET ASSETS: 2004($) 2003(a)(b)($) 2002($) - -------------------------------------------------------------------------------------------------------------------------------- Operations: Net investment income 1,677,382 2,589,395 237,883 Net realized gain (loss) on investments (3,322,120) (9,261,189) 12,886,804 Net change in unrealized appreciation/depreciation on investments 28,933,017 14,197,391 (7,411,274) ----------------------------------------- Net Increase from Operations 27,288,279 7,525,597 5,713,413 Distributions Declared to Shareholders: From net investment income: Class A (37,237) (3,464) -- Class B (22,411) (2,610) -- Class C (5,027) (235) -- Class G (55,416) (58,829) -- Class T (1,033,452) (1,134,919) (14,787) Class Z (924,877) (1,326,619) (270,326) From net realized gains: Class G -- -- (92,957) Class T -- -- (321,990) Class Z -- -- (4,065,865) ----------------------------------------- Total Distributions Declared to Shareholders (2,078,420) (2,526,676) (4,765,925) ------------------------------------------------------------------------------ Share Transactions: Class A: Subscriptions 5,408,238 648,541 -- Distributions reinvested 34,498 3,237 -- Redemptions (179,538) (99,798) -- ----------------------------------------- Net Increase 5,263,198 551,980 -- Class B: Subscriptions 3,922,356 1,466,777 -- Distributions reinvested 19,710 2,480 -- Redemptions (269,128) (350,847) -- ----------------------------------------- Net Increase 3,672,938 1,118,410 -- Class C: Subscriptions 1,327,132 743,182 -- Distributions reinvested 3,734 111 -- Redemptions (214,542) (624,830) -- ----------------------------------------- Net Increase 1,116,324 118,463 -- Class G: Subscriptions 47,460 143,452 607,331 Proceeds received in connection with merger -- 10,032,885 -- Distributions reinvested 54,051 56,662 92,335 Redemptions (3,037,328) (3,057,348) (449,690) ----------------------------------------- Net Increase (Decrease) (2,935,817) 7,175,651 249,976 Class T: Subscriptions 2,615,901 2,162,435 1,956,588 Proceeds received in connection with merger -- 101,580,964 -- Distributions reinvested 997,974 1,097,380 334,609 Redemptions (8,823,532) (17,083,667) (2,756,097) ----------------------------------------- Net Increase (Decrease) (5,209,657) 87,757,112 (464,900) See notes to financial statements. 13 Columbia Dividend Income Fund (unaudited) Six Months Period Ended Ended Year Ended March 31, September 30, October 31, 2004($) 2003(a)(b)($) 2002($) - -------------------------------------------------------------------------------------------------------------------------------- Share Transactions: Class Z: Subscriptions 10,905,187 14,764,524 9,952,015 Proceeds received in connection with merger -- 76,942,534 -- Distributions reinvested 205,932 306,107 3,813,095 Redemption-in-kind (c) -- -- (93,827,039) Redemptions (19,859,400) (40,885,365) (5,698,090) ----------------------------------------- Net Increase (Decrease) (8,748,281) 51,127,800 (85,760,019) Net Increase (Decrease) from Share Transactions (6,841,295) 147,849,416 (85,974,943) Total Increase (Decrease) in Net Assets 18,368,564 152,848,337 (85,027,455) ------------------------------------------------------------------------------ Net Assets: Beginning of period 181,415,583 28,567,246 113,594,701 End of period 199,784,147 181,415,583 28,567,246 Undistributed (overdistributed) net investment income, at end of period (255,946) 145,092 32,838 ------------------------------------------------------------------------------ Changes in Shares: Class A: Subscriptions 517,164 72,731 -- Issued for distributions reinvested 3,357 345 -- Redemptions (17,028) (12,169) -- ----------------------------------------- Net Increase 503,493 60,907 -- Class B: Subscriptions 388,539 164,196 -- Issued for distributions reinvested 1,957 268 -- Redemptions (27,842) (39,385) -- ----------------------------------------- Net Increase 362,654 125,079 -- Class C: Subscriptions 131,322 86,238 -- Issued for distributions reinvested 370 12 -- Redemptions (21,684) (69,543) -- ----------------------------------------- Net Increase 110,008 16,707 -- Class G: Subscriptions 4,686 16,877 58,075 Issued in connection with merger -- 1,137,552 -- Issued for distributions reinvested 5,398 6,525 8,802 Redemptions (306,043) (347,287) (48,228) ----------------------------------------- Net Increase (Decrease) (295,959) 813,667 18,649 Class T: Subscriptions 256,398 238,068 184,929 Issued in connection with merger -- 11,278,336 -- Issued for distributions reinvested 97,932 122,918 31,497 Redemptions (868,709) (1,972,609) (285,078) ----------------------------------------- Net Increase (Decrease) (514,379) 9,666,713 (68,652) See notes to financial statements. 14 Columbia Dividend Income Fund (unaudited) Six Months Period Ended Ended Year Ended March 31, September 30, October 31, 2004($) 2003(a)(b)($) 2002($) - -------------------------------------------------------------------------------------------------------------------------------- Changes in Shares: Class Z: Subscriptions 1,096,157 1,688,522 985,895 Issued in connection with merger -- 8,539,200 -- Issued for distributions reinvested 20,250 34,595 356,985 Redemption-in-kind (c) -- -- (8,728,097) Redemptions (1,952,506) (4,674,712) (552,015) ----------------------------------------- Net Increase (Decrease) (836,099) 5,587,605 (7,937,232)
(a) The Fund changed its fiscal year end from October 31 to September 30. (b) Effective November 25, 2002, the Galaxy Strategic Equity Fund Retail B, Retail A and Trust shares were reorganized as Liberty Strategic Equity Fund Class G, Class T and Class Z shares, respectively. Subsequently, the Fund began offering Class A, Class B and Class C shares. Effective October 13, 2003, the Liberty Strategic Equity Fund was renamed Columbia Strategic Equity Fund. Effective October 27, 2003, the Columbia Strategic Equity Fund was renamed Columbia Dividend Income Fund. (c) The Fund had a redemption-in-kind on January 11, 2002, which resulted in a redemption out of the Fund of $93,827,039. The redemption is comprised of securities and cash in the amounts of $83,530,666 and $10,296,373, respectively. See notes to financial statements. 15 NOTES TO FINANCIAL STATEMENTS March 31, 2004 (unaudited) Columbia Dividend Income Fund NOTE 1. ORGANIZATION Columbia Dividend Income Fund (the "Fund"), a series of Columbia Funds Trust XI (the "Trust"), is a diversified portfolio. The Trust is a Massachusetts business trust registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. Investment Goals The Fund seeks current income and capital appreciation. Prior to October 27, 2003, the Fund's investment goal was to seek long-term capital appreciation. Fund Shares The Fund may issue an unlimited number of shares and offers six classes of shares: Class A, Class B, Class C, Class G, Class T and Class Z. Each share class has its own sales charge and expense structure. Class A and Class T shares are subject to a front-end sales charge based on the amount of initial investment. Class A and Class T shares purchased without an initial sales charge in accounts aggregating $1 million to $25 million at the time of purchase are subject to a 1.00% contingent deferred sales charge ("CDSC") on shares sold within eighteen months of the time of purchase. Class B and Class G shares are subject to a maximum CDSC of 5.00% based upon the holding period after purchase. Class B shares will convert to Class A shares in a certain number of years after purchase, depending on the program under which shares were purchased. Class G shares will convert to Class T shares in eight years after purchase. Class C shares are subject to a 1.00% CDSC on shares sold within one year after purchase. Class Z shares are offered continuously at net asset value. There are certain restrictions on the purchase of Class Z shares, as described in the Fund's prospectus. On October 13, 2003, the Liberty Strategic Equity Fund was renamed Columbia Strategic Equity Fund. Also on this date, the Liberty-Stein Roe Investment Trust was renamed Columbia Funds Trust XI. On October 27, 2003, the Columbia Strategic Equity Fund was renamed Columbia Dividend Income Fund. NOTE 2. SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. Security Valuation Equity securities are valued at the last sale price at the close of the principal exchange on which they trade. Unlisted securities or listed securities for which there were no sales during the day are valued at the closing bid price on such exchanges or over-the-counter markets. Short-term debt obligations maturing within 60 days are valued at amortized cost, which approximates market value. Investments for which market quotations are not readily available, or quotations which management believes are not appropriate, are valued at fair value as determined in good faith under consistently applied procedures established by and under the general supervision of the Board of Trustees. Security Transactions Security transactions are accounted for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes. Repurchase Agreements The Fund may engage in repurchase agreement transactions with institutions that the Fund's investment advisor has determined are creditworthy. The Fund, through its custodian, receives delivery of underlying securities collateralizing a repurchase agreement. Collateral is at least equal, at all times, to the value of the repurchase obligation including 16 March 31, 2004 (unaudited) Columbia Dividend Income Fund interest. A repurchase agreement transaction involves certain risks in the event of default or insolvency of the counterparty. These risks include possible delays or restrictions upon the Fund's ability to dispose of the underlying securities and a possible decline in the value of the underlying securities during the period while the Fund seeks to assert its rights. Income Recognition Interest income is recorded on the accrual basis. Corporate actions and dividend income are recorded on the ex-date. Determination of Class Net Asset Values All income, expenses (other than class-specific expenses, as shown on the Statement of Operations) and realized and unrealized gains (losses), are allocated to each class of the Fund on a daily basis, based on the relative net assets of each class, for purposes of determining the net asset value of each class. Federal Income Tax Status The Fund intends to qualify each year as a "regulated investment company" under Subchapter M of the Internal Revenue Code, as amended, and will distribute substantially all of its taxable income, if any, for its tax year, and as such will not be subject federal income taxes. In addition, by distributing in each calendar year substantially all of its net investment income, capital gains and certain other amounts, if any, the Fund will not be subject to federal excise tax. Therefore, no federal income or excise tax provision is recorded. Distributions to Shareholders Distributions to shareholders are recorded on ex-date. Net realized capital gains, if any, are distributed at least annually. Note 3. Federal Tax Information The tax character of distributions paid during the period ended September 30, 2003 and the year ended October 31, 2002 was as follows: Long-Term Ordinary Income Capital Gains ================================================================================ September 2003 $2,526,676 $ -- October 2002 1,124,772 3,641,153 ================================================================================ Unrealized appreciation and depreciation at March 31, 2004, based on cost of investments for federal income tax purposes was: ================================================================================ Unrealized appreciation $ 28,766,057 Unrealized depreciation (9,397,959) - -------------------------------------------------------------------------------- Net unrealized appreciation $ 19,368,098 ================================================================================ The following capital loss carryforwards, determined as of September 30, 2003, may be available to reduce taxable income arising from future net realized gains on investments, if any, to the extent permitted by the Internal Revenue Code: Year of Capital Loss Expiration Carryforward ================================================================================ 2009 $20,104,156 2010 2,470,255 2011 9,095,627 - -------------------------------------------------------------------------------- $31,670,038 ================================================================================ Of the capital loss carryforwards attributable to the Fund, $20,424,884 ($20,104,156 expiring 9/30/09 and $320,728 expiring 9/30/10) was obtained upon the Fund's merger with Galaxy Equity Income Fund (See Note 10). Utilization of the Fund's capital loss carryforwards above could be subject to limitations imposed by the Internal Revenue Code. Expired capital loss carryforwards, if any, are recorded as a reduction of paid-in capital. NOTE 4. FEES AND COMPENSATION PAID TO AFFILIATES Investment Advisory Fee Columbia Management Advisors, Inc. ("Columbia") is the investment advisor to the Fund. Prior to April 1, 2004, Columbia was an indirect, wholly owned subsidiary of FleetBoston Financial Corporation ("FleetBoston"). Effective April 1, 2004, FleetBoston was acquired by Bank of America Corporation ("BOA"). Columbia receives a monthly investment advisory fee based on the Fund's average daily net assets as follows: Average Daily Net Assets Annual Fee Rate ================================================================================ First $500 million 0.75% Next $500 million 0.70% Next $500 million 0.65% Next $500 million 0.60% Over $2 billion 0.55% ================================================================================ 17 March 31, 2004 (unaudited) Columbia Dividend Income Fund Prior to November 1, 2003, Columbia was entitled to receive a monthly investment advisory fee at the annual rate of 0.75% of the Fund's average daily net assets. Administration Fee Columbia provides accounting and other services to the Fund for a monthly administration fee at the annual rate of 0.067% of the Fund's average daily net assets. Pricing and Bookkeeping Fees Columbia is responsible for providing pricing and bookkeeping services to the Fund under a pricing and bookkeeping agreement. Under a separate agreement (the "Outsourcing Agreement"), Columbia has delegated those functions to State Street Corporation ("State Street"). Columbia pays the total fees collected to State Street under the Outsourcing Agreement. Under its pricing and bookkeeping agreement with the Fund, Columbia receives an annual fee, in addition to fees for pricing services, based on the average daily net assets of the Fund as follows: Average Daily Net Assets Annual Fee Rate ================================================================================ Under $50 million $25,000 Over $50 million but less than $200 million $35,000 Over $200 million but less than $500 million $50,000 Over $500 million but less than $1 billion $85,000 Over $1 billion $125,000 ================================================================================ An additional flat rate fee of $10,000 is charged to the Fund due to its multiple class structure. For the six months ended March 31, 2004, the Fund's annualized effective pricing and bookkeeping fee rate was 0.022%. Transfer Agent Fee Columbia Funds Services, Inc. (the "Transfer Agent"), formerly Liberty Funds Services, Inc., an indirect, wholly owned subsidiary of BOA, provides shareholder services to the Fund. For such services, the Transfer Agent receives a fee, paid monthly, at the annual rate of $28.00 per open account. The Transfer Agent also receives reimbursement for certain out-of-pocket expenses. Prior to November 1, 2003, the Transfer Agent was entitled to receive a monthly transfer agent fee based on a per-account charge or a minimum of $5,000 annually. The Transfer Agent was also entitled to receive reimbursement for certain out-of-pocket expenses. The Transfer Agent has voluntarily agreed to waive a portion of its transfer agent fee for the Fund. This arrangement may be revised or discontinued by the Transfer Agent at any time. For the period January 1, 2004 through March 31, 2004, the Transfer Agent waived fees of $6,362 for the Fund. For the period October 1, 2003 through December 31, 2003, the Transfer Agent waived class specific transfer agent fees of $2,518 and $3,880 for Class T and Class Z shares of the Fund, respectively. Underwriting Discounts, Service and Distribution Fees Columbia Funds Distributor, Inc. (the "Distributor"), formerly Liberty Funds Distributor, Inc., an indirect, wholly owned subsidiary of BOA, is the principal underwriter of the Fund. For the six months ended March 31, 2004, the Distributor has retained net underwriting discounts of $8,562 and $1,264 on sales of the Fund's Class A and Class T shares, respectively. For the same period, the Distributor received CDSC fees of $384, $115 and $12,353 on Class B, Class C and Class G share redemptions, respectively. The Fund has adopted a 12b-1 plan (the "Plan"), which requires the payment of a monthly distribution and service fee to the Distributor at an annual fee rate as follows: Distribution Fee ================================================================================ Class A Class B Class C Class G 0.10% 0.75% 0.75% 0.65% ================================================================================ Service Fee ================================================================================ Class A Class B Class C Class G 0.25% 0.25% 0.25% 0.50% ================================================================================ The Fund does not intend to pay total distribution and service fees in excess of 0.25% and 0.95% annually for Class A and Class G shares of the Fund, respectively. The Fund has adopted a shareholder service plan that permits it to pay for certain services provided to Class T and Class Z shareholders by their financial advisor. Currently, the service plan has not been implemented with respect to the Fund's Class Z shares. The annual service fee may equal up to 0.50% for Class T shares. 18 March 31, 2004 (unaudited) Columbia Dividend Income Fund The Fund does not intend to pay more than 0.30% annually for Class T shareholder service fees. The CDSC and the fees received from the Plan are used principally as repayment to the Distributor for amounts paid by the Distributor to dealers who sold such shares. Custody Credits The Fund has an agreement with its custodian bank under which custody fees may be reduced by balance credits. The Fund could have invested a portion of the assets utilized in connection with the expense offset arrangement in an income-producing asset if it had not entered into such an agreement. Fees Paid to Officers and Trustees The Fund pays no compensation to its officers, all of whom are employees of Columbia or its affiliates. The Fund's Trustees may participate in a deferred compensation plan which may be terminated at any time. Obligations of the plan will be paid solely out of the Fund's assets. NOTE 5. PORTFOLIO INFORMATION For the six months ended March 31, 2004, the cost of purchases and proceeds from sales of securities, excluding short-term obligations, were $60,530,596 and $68,859,689, respectively. NOTE 6. LINE OF CREDIT The Fund and other affiliated funds participate in a $350,000,000 credit facility, which is used for temporary or emergency purposes to facilitate portfolio liquidity. Interest is charged to the Fund based on its borrowings. In addition, the Fund has agreed to pay commitment fees on its pro-rata portion of the unutilized line of credit. The commitment fee is included in "Other expenses" on the Statement of Operations. For the six months ended March 31, 2004, the Fund did not borrow under this arrangement. NOTE 7. DISCLOSURE OF SIGNIFICANT RISKS AND CONTINGENCIES Legal Proceedings Columbia, the Distributor, and certain of their affiliates (collectively, "The Columbia Group") have received information requests and subpoenas from various regulatory and law enforcement authorities in connection with their investigations of late trading and market timing in mutual funds. The Columbia Group has not uncovered any instances where Columbia or the Distributor were knowingly involved in late trading of mutual fund shares. On February 24, 2004, the Securities and Exchange Commission ("SEC") filed a civil complaint in the United States District Court for the District of Massachusetts against Columbia and the Distributor, alleging that they had violated certain provisions of the federal securities laws in connection with trading activity in mutual fund shares. Also on February 24, 2004, the New York Attorney General ("NYAG") filed a civil complaint in New York Supreme Court, County of New York against Columbia and the Distributor alleging that Columbia and the Distributor had violated certain New York anti-fraud statutes. If either Columbia or the Distributor is unsuccessful in its defense of these proceedings, it could be barred from serving as an investment advisor or distributor for any investment company registered under the Investment Company Act of 1940, as amended (a "registered investment company"). Such results could prevent Columbia, the Distributor or any company that is an affiliated person of Columbia and the Distributor from serving as an investment advisor or distributor for any registered investment company, including your fund. Your fund has been informed by Columbia and the Distributor that, if these results occur, they will seek exemptive relief from the SEC to permit them to continue to serve as your fund's investment advisor and distributor. There is no assurance that such exemptive relief will be granted. On March 15, 2004, Columbia and the Distributor entered into agreements in principle with the SEC Division of Enforcement and NYAG in settlement of the charges. Under the agreements, Columbia and the Distributor agreed, inter alia, to the following conditions: payment of $70 million in disgorgement; payment of $70 million in civil penalties; an order requiring Columbia and the Distributor to cease and desist from violations of the antifraud provisions and other provisions of the federal securities laws; governance changes designed to maintain the independence of the mutual fund boards of trustees and ensure compliance with securities laws and their fiduciary duties; and retention of an independent consultant to review Columbia's and the Distributor's compliance policies and procedures. The 19 March 31, 2004 (unaudited) Columbia Dividend Income Fund agreement requires the final approval of the SEC. In a separate agreement with the NYAG, The Columbia Group has agreed to reduce mutual fund fees by $80 million over a five-year period. As a result of these matters or any adverse publicity or other developments resulting from them, there may be increased redemptions or reduced sales of fund shares, which could increase transaction costs or operating expenses, or have other adverse consequences for the funds. For the six months ended March 31, 2004, Columbia has assumed $1,357 of legal, consulting services and Trustees' fees incurred by the Fund in connection with these matters. NOTE 8. SUBSEQUENT EVENT On April 1, 2004, FleetBoston, including the Fund's investment advisor and distributor, was acquired by BOA. The merger did not change the way the Fund is managed, the investment personnel assigned to manage the Fund or the fees paid by the Fund. NOTE 9. COMPARABILITY OF FINANCIAL STATEMENTS The fiscal year end of the Fund was changed from October 31 to September 30. Accordingly, the Fund's 2004 fiscal year end will be September 30, 2004. NOTE 10. BUSINESS COMBINATIONS AND MERGERS As of the end of business on November 22, 2002, the Galaxy Equity Income Fund, previously a fund of The Galaxy Fund, a separate Massachusetts business trust, merged into Liberty Strategic Equity Fund (currently known as Columbia Dividend Income Fund). The Liberty Strategic Equity Fund received a tax-free transfer of assets from Galaxy Equity Income Fund as follows: SHARES NET ASSETS UNREALIZED ISSUED RECEIVED DEPRECIATION(1) ----------- ----------- ----------- 20,955,088 $188,556,383 $(19,625,587) NET ASSETS OF NET ASSETS OF NET ASSETS OF GALAXY EQUITY LIBERTY STRATEGIC LIBERTY STRATEGIC INCOME FUND EQUITY FUND EQUITY FUND IMMEDIATELY IMMEDIATELY PRIOR TO PRIOR TO AFTER COMBINATION COMBINATION COMBINATION ----------- ----------- ----------- $30,204,471 $188,556,383 $218,760,854 1 Unrealized depreciation is included in the Net Assets Received amount shown above. Class G, Class T and Class Z shares of the Liberty Strategic Equity Fund were issued in exchange for Retail B, Retail A and Trust shares of Galaxy Equity Income Fund, respectively. Class A, Class B and Class C shares commenced operations on November 25, 2002. The accompanying statement of operations, statement of changes in net assets and financial highlights represent the historical operations of the Galaxy Strategic Equity Fund for periods prior to November 22, 2002. 20 Financial Highlights Columbia Dividend Income Fund Selected data for a share outstanding throughout each period is as follows:
(UNAUDITED) SIX MONTHS ENDED PERIOD ENDED MARCH 31, SEPTEMBER 30, CLASS A SHARES 2004 (a) 2003 (b)(c) - ----------------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 9.26 $ 9.01 - ----------------------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (d) 0.09 0.11 Net realized and unrealized gain on investments 1.32 0.25 -------- -------- Total from Investment Operations 1.41 0.36 - ----------------------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income (0.11) (0.11) - ----------------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 10.56 $ 9.26 Total return (e)(f)(g) 15.26% 4.02% - ----------------------------------------------------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (h)(i) 1.34% 1.42% Net investment income (h)(i) 1.73% 1.38% Waiver/reimbursement (i) 0.01% --%(j) Portfolio turnover rate (f) 31% 33% Net assets, end of period (000's) $ 5,959 $ 564 - -----------------------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Strategic Equity Fund was renamed Columbia Strategic Equity Fund. On October 27, 2003, the Columbia Strategic Equity Fund was renamed Columbia Dividend Income Fund. (b) The Fund changed its fiscal year end from October 31 to September 30. (c) Class A shares were initially offered on November 25, 2002. Per share data and total return reflect activity from that date. (d) Per share data was calculated using average shares outstanding during the period. (e) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (f) Not annualized. (g) Had the Investment Advisor and/or any of its affiliates not waived a portion of expenses, total return would have been reduced. (h) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (i) Annualized. (j) Rounds to less than 0.01%. 21 Columbia Dividend Income Fund Selected data for a share outstanding throughout each period is as follows:
(UNAUDITED) SIX MONTHS ENDED PERIOD ENDED MARCH 31, SEPTEMBER 30, CLASS B SHARES 2004 (a) 2003 (b)(c) - ----------------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 9.08 $ 8.82 - ----------------------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (d) 0.04 0.05 Net realized and unrealized gain on investments 1.30 0.26 -------- -------- Total from Investment Operations 1.34 0.31 - ----------------------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income (0.07) (0.05) - ----------------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 10.35 $ 9.08 Total return (e)(f)(g) 14.74% 3.51% - ----------------------------------------------------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (h)(i) 2.10% 2.34% Net investment income (h)(i) 0.92% 0.47% Waiver/reimbursement (i) 0.01% --%(j) Portfolio turnover rate (f) 31% 33% Net assets, end of period (000's) $ 5,050 $ 1,136 - -----------------------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Strategic Equity Fund was renamed Columbia Strategic Equity Fund. On October 27, 2003, the Columbia Strategic Equity Fund was renamed Columbia Dividend Income Fund. (b) The Fund changed its fiscal year end from October 31 to September 30. (c) Class B shares were initially offered on November 25, 2002. Per share data and total return reflect activity from that date. (d) Per share data was calculated using average shares outstanding during the period. (e) Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge. (f) Not annualized. (g) Had the Investment Advisor and/or any of its affiliates not waived a portion of expenses, total return would have been reduced. (h) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (i) Annualized. (j) Rounds to less than 0.01%. 22 Columbia Dividend Income Fund Selected data for a share outstanding throughout each period is as follows:
(UNAUDITED) SIX MONTHS ENDED PERIOD ENDED MARCH 31, SEPTEMBER 30, CLASS C SHARES 2004 (a) 2003 (b)(c) - ----------------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 9.07 $ 8.82 - ----------------------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (d) 0.05 0.07 Net realized and unrealized gain on investments 1.29 0.23 -------- ------- Total from Investment Operations 1.34 0.30 - ----------------------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income (0.07) (0.05) - ----------------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 10.34 $ 9.07 Total return (e)(f)(g) 14.75% 3.41% - ----------------------------------------------------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (h)(i) 2.09% 2.18% Net investment income (h)(i) 0.92% 0.95% Waiver/reimbursement (i) 0.01% --%(j) Portfolio turnover rate (f) 31% 33% Net assets, end of period (000's) $ 1,311 $ 152 - -----------------------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Strategic Equity Fund was renamed Columbia Strategic Equity Fund. On October 27, 2003, the Columbia Strategic Equity Fund was renamed Columbia Dividend Income Fund. (b) The Fund changed its fiscal year end from October 31 to September 30. (c) Class C shares were initially offered on November 25, 2002. Per share data and total return reflect activity from that date. (d) Per share data was calculated using average shares outstanding during the period. (e) Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge. (f) Not annualized. (g) Had the Investment Advisor and/or any of its affiliates not waived a portion of expenses, total return would have been reduced. (h) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (i) Annualized. (j) Rounds to less than 0.01%. 23 Columbia Dividend Income Fund Selected data for a share outstanding throughout each period is as follows:
(UNAUDITED) SIX MONTHS ENDED PERIOD ENDED YEAR ENDED OCTOBER 31, MARCH 31, SEPTEMBER 30, ---------------------------------------------------------------- CLASS G SHARES 2004 (a) 2003 (b)(c) 2002 2001 2000 1999 1998 (d) - ----------------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 9.07 $ 8.36 $ 9.87 $ 10.37 $ 9.84 $ 9.61 $ 10.00 - ----------------------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) 0.05(e) 0.05(e) (0.07)(e) (0.06)(e) (0.04) (0.02)(e) (0.02) Net realized and unrealized gain (loss)on investments 1.28 0.71 (1.05)(f) (0.11) 1.75 0.26 (0.37) -------- -------- -------- -------- -------- -------- -------- Total from Investment Operations 1.33 0.76 (1.12) (0.17) 1.71 0.24 (0.39) - ----------------------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income (0.06) (0.05) -- -- --(g) -- -- From net realized gains -- -- (0.39) (0.33) (1.18) (0.01) -- -------- -------- -------- -------- -------- -------- -------- Total Distributions Declared to Shareholders (0.06) (0.05) (0.39) (0.33) (1.18) (0.01) -- - ----------------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 10.34 $ 9.07 $ 8.36 $ 9.87 $ 10.37 $ 9.84 $ 9.61 Total return (h)(i) 14.73%(j) 9.08%(j) (12.16)% (1.71)% 20.33% 2.50% (4.76)%(j) - ----------------------------------------------------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/ SUPPLEMENTAL DATA: Expenses (k) 2.18%(l) 2.21%(l) 2.17% 2.02% 1.95% 1.84% 2.01%(l) Net investment income (loss) (k) 0.92%(l) 0.71%(l) (0.72)% (0.53)% (0.35)% (0.24)% (0.55)%(l) Waiver/reimbursement 0.01%(l) --%(l)(m) 0.25% 0.24% 0.40% 0.56% 1.04%(l) Portfolio turnover rate 31%(j) 33%(j) 65%(n) 81% 81% 79% 30%(j) Net assets, end of period (000's) $ 7,945 $ 9,650 $ 2,093 $ 2,286 $ 1,555 $ 1,348 $ 583 - -----------------------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Strategic Equity Fund was renamed Columbia Strategic Equity Fund. On October 27, 2003, the Columbia Strategic Equity Fund was renamed Columbia Dividend Income Fund. (b) The Fund changed its fiscal year end from October 31 to September 30. (c) On November 25, 2002, Galaxy Strategic Equity Fund, Retail B shares were redesignated Liberty Strategic Equity Fund, Class G shares. (d) The Fund commenced operations on March 4, 1998. (e) Per share data was calculated using average shares outstanding during the period. (f) The amount shown for a share outstanding does not correspond with the aggregate net gain (loss) on investments for the period due to the timing of repurchases of Fund shares in relation to fluctuating market values of the investments of the Fund. (g) Rounds to less than $0.01 per share. (h) Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge. (i) Had the Investment Advisor and/or any of its affiliates not waived or reimbursed a portion of expenses, total return would have been reduced. (j) Not annualized. (k) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (l) Annualized. (m) Rounds to less than 0.01%. (n) Portfolio turnover rate excludes securities delivered from processing a redemption-in-kind. 24 Columbia Dividend Income Fund Selected data for a share outstanding throughout each period is as follows:
(UNAUDITED) SIX MONTHS ENDED PERIOD ENDED YEAR ENDED OCTOBER 31, MARCH 31, SEPTEMBER 30, ------------------------------------------------------------------ CLASS T SHARES 2004 (a) 2003 (b)(c) 2002 2001 2000 1999 1998 (d) - ----------------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 9.26 $ 8.54 $ 10.02 $ 10.46 $ 9.89 $ 9.62 $ 10.00 - ----------------------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.08(e) 0.11(e) 0.01(e) 0.03(e) 0.04 0.04(e) --(f) Net realized and unrealized gain (loss) on investments 1.32 0.73 (1.08)(g) (0.11) 1.75 0.27 (0.38) -------- -------- -------- -------- -------- -------- -------- Total from Investment Operations 1.40 0.84 (1.07) (0.08) 1.79 0.31 (0.38) - ----------------------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income (0.10) (0.12) (0.02) (0.03) (0.04) (0.03) -- From net realized gains -- -- (0.39) (0.33) (1.18) (0.01) -- -------- -------- -------- -------- -------- -------- -------- Total Distributions Declared to Shareholders (0.10) (0.12) (0.41) (0.36) (1.22) (0.04) -- - ----------------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 10.56 $ 9.26 $ 8.54 $ 10.02 $ 10.46 $ 9.89 $ 9.62 Total return (h)(i) 15.20%(j) 9.86%(j) (11.50)% (0.83)% 21.09% 3.25% (3.75)%(j) - ----------------------------------------------------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/ SUPPLEMENTAL DATA: Expenses (k) 1.47%(l) 1.49%(l) 1.40% 1.24% 1.20% 1.19% 1.40%(l) Net investment income (k) 1.61%(l) 1.42%(l) 0.05% 0.25% 0.40% 0.41% 0.06%(l) Waiver/reimbursement 0.01%(l) 0.01%(l) 0.29% 0.26% 0.40% 0.44% 1.01%(l) Portfolio turnover rate 31%(j) 33%(j) 65%(m) 81% 81% 79% 30%(j) Net assets, end of period (000's) $104,791 $ 96,638 $ 6,578 $ 8,400 $ 8,505 $ 8,229 $ 4,051 - -----------------------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Strategic Equity Fund was renamed Columbia Strategic Equity Fund. On October 27, 2003, the Columbia Strategic Equity Fund was renamed Columbia Dividend Income Fund. (b) The Fund changed its fiscal year end from October 31 to September 30. (c) On November 25, 2002, Galaxy Strategic Equity Fund, Retail A shares were redesignated Liberty Strategic Equity Fund, Class T shares. (d) The Fund commenced operations on March 4, 1998. (e) Per share data was calculated using average shares outstanding during the period. (f) Rounds to less than $0.01 per share. (g) The amount shown for a share outstanding does not correspond with the aggregate net gain (loss) on investments for the period due to the timing of repurchases of Fund shares in relation to fluctuating market values of the investments of the Fund. (h) Had the Investment Advisor and/or any of its affiliates not waived or reimbursed a portion of expenses, total return would have been reduced. (i) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (j) Not annualized. (k) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (l) Annualized. (m) Portfolio turnover rate excludes securities delivered from processing a redemption-in-kind. 25 Columbia Dividend Income Fund Selected data for a share outstanding throughout each period is as follows:
(UNAUDITED) SIX MONTHS ENDED PERIOD ENDED YEAR ENDED OCTOBER 31, MARCH 31, SEPTEMBER 30, ------------------------------------------------------------------ CLASS Z SHARES 2004 (a) 2003 (b)(c) 2002 2001 2000 1999 1998 (d) - ----------------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 9.26 $ 8.56 $ 10.03 $ 10.48 $ 9.90 $ 9.63 $ 10.00 - ----------------------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.10(e) 0.15(e) 0.06(e) 0.08(e) 0.08 0.09(e) 0.01 Net realized and unrealized gain (loss) on investments 1.33 0.72 (1.07)(f) (0.12) 1.76 0.27 (0.37) -------- -------- -------- -------- -------- -------- -------- Total from Investment Operations 1.43 0.87 (1.01) (0.04) 1.84 0.36 (0.36) - ----------------------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income (0.13) (0.17) (0.07) (0.08) (0.08) (0.08) (0.01) From net realized gains -- -- (0.39) (0.33) (1.18) (0.01) -- -------- -------- -------- -------- -------- -------- -------- Total Distributions Declared to Shareholders (0.13) (0.17) (0.46) (0.41) (1.26) (0.09) (0.01) - ----------------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 10.56 $ 9.26 $ 8.56 $ 10.03 $ 10.48 $ 9.90 $ 9.63 Total return (g)(h) 15.45%(i) 10.22%(i) (11.07)% (0.43)% 21.69% 3.64% (3.62)%(i) - ----------------------------------------------------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/ SUPPLEMENTAL DATA: Expenses (j) 1.09%(k) 1.02%(k) 0.82% 0.75% 0.78% 0.80% 1.27%(k) Net investment income (j) 2.00%(k) 1.89%(k) 0.63% 0.74% 0.83% 0.80% 0.19%(k) Waiver/reimbursement 0.02%(k) 0.02%(k) 0.24% 0.21% 0.20% 0.20% 0.20%(k) Portfolio turnover rate 31%(i) 33%(i) 65%(l) 81% 81% 79% 30%(i) Net assets, end of period (000's) $74,728 $73,276 $19,896 $102,909 $93,558 $71,063 $63,061 - -----------------------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Strategic Equity Fund was renamed Columbia Strategic Equity Fund. On October 27, 2003, the Columbia Strategic Equity Fund was renamed Columbia Dividend Income Fund. (b) The Fund changed its fiscal year end from October 31 to September 30. (c) On November 25, 2002, Galaxy Strategic Equity Fund, Trust shares were redesignated Liberty Strategic Equity Fund, Class Z shares. (d) The Fund commenced operations on March 4, 1998. (e) Per share data was calculated using average shares outstanding during the period. (f) The amount shown for a share outstanding does not correspond with the aggregate net gain (loss) on investments for the period due to the timing of repurchases of Fund shares in relation to fluctuating market values of the investments of the Fund. (g) Total return at net asset value assuming all distributions reinvested. (h) Had the Investment Advisor and/or any of its affiliates not waived or reimbursed a portion of expenses, total return would have been reduced. (i) Not annualized. (j) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (k) Annualized. (l) Portfolio turnover rate excludes securities delivered from processing a redemption-in-kind. 26 IMPORTANT INFORMATION ABOUT THIS REPORT Columbia Dividend Income Fund TRANSFER AGENT Columbia Funds Services, Inc. P.O. Box 8081 Boston MA 02266-8081 800.345.6611 DISTRIBUTOR Columbia Funds Distributor, Inc. One Financial Center Boston MA 02111 INVESTMENT ADVISOR Columbia Management Advisors, Inc. 100 Federal Street Boston MA 02110 The fund mails one shareholder report to each shareholder address. If you would like more than one report, please call shareholder services at 800-345-6611 and additional reports will be sent to you. This report has been prepared for shareholders of Columbia Dividend Income Fund. This report may also be used as sales literature when preceded or accompanied by the current prospectus which provides details of sales charges, investment objectives and operating policies of the fund and with the most recent copy of the Columbia Funds Performance Update. A description of the policies and procedures that the fund uses to determine how to vote proxies relating to its portfolio securities is available (i) without charge, upon request, by calling 800-345-6611 and (ii) on the Securities and Exchange Commissionwebsite at http://www.sec.gov. 27
COLUMBIA FUNDS Columbia Dividend Income Fund ---------------------------------------------------------------------------------------- Large Growth Columbia Common Stock Columbia Growth Columbia Growth Stock Columbia Large Cap Growth Columbia Tax-Managed Growth Columbia Tax-Managed Growth II Columbia Young Investor ---------------------------------------------------------------------------------------- Large Value Columbia Disciplined Value Columbia Growth & Income Columbia Large Cap Core Columbia Tax-Managed Value ---------------------------------------------------------------------------------------- Midcap Growth Columbia Acorn Select Columbia Mid Cap Growth Columbia Tax-Managed Aggressive Growth ---------------------------------------------------------------------------------------- Midcap Value Columbia Dividend Income Columbia Mid Cap Columbia Strategic Investor ---------------------------------------------------------------------------------------- Small Growth Columbia Acorn Columbia Acorn USA Columbia Small Company Equity ---------------------------------------------------------------------------------------- Small Value Columbia Small Cap Columbia Small Cap Value ---------------------------------------------------------------------------------------- Balanced Columbia Asset Allocation Columbia Balanced Columbia Liberty Fund ---------------------------------------------------------------------------------------- Specialty Columbia Real Estate Equity Columbia Technology Columbia Utilities ---------------------------------------------------------------------------------------- Taxable Fixed-Income Columbia Contrarian Income Columbia Corporate Bond Columbia Federal Securities Columbia Fixed Income Securities Columbia High Yield Columbia High Yield Opportunities Columbia Income Columbia Intermediate Bond Columbia Intermediate Government Income Columbia Quality Plus Bond Columbia Short Term Bond Columbia Strategic Income ---------------------------------------------------------------------------------------- Floating Rate Columbia Floating Rate Columbia Floating Rate Advantage ---------------------------------------------------------------------------------------- Tax Exempt Columbia High Yield Municipal Columbia Intermediate Tax-Exempt Bond Columbia Managed Municipals Columbia National Municipal Bond Columbia Tax-Exempt Columbia Tax-Exempt Insured 28 Columbia Dividend Income Fund ---------------------------------------------------------------------------------------- Single State Tax Exempt Columbia California Tax-Exempt Columbia Connecticut Intermediate Municipal Bond Columbia Connecticut Tax-Exempt Columbia Florida Intermediate Municipal Bond Columbia Massachusetts Intermediate Municipal Bond Columbia Massachusetts Tax-Exempt Columbia New Jersey Intermediate Municipal Bond Columbia New York Intermediate Municipal Bond Columbia New York Tax-Exempt Columbia Oregon Municipal Bond Columbia Pennsylvania Intermediate Municipal Bond Columbia Rhode Island Intermediate Municipal Bond ---------------------------------------------------------------------------------------- Money Market Columbia Money Market Columbia Municipal Money Market ---------------------------------------------------------------------------------------- International/Global Columbia Acorn International Columbia Acorn International Select Columbia Europe Columbia Global Equity Columbia International Stock Columbia Newport Asia Pacific Columbia Newport Greater China Columbia Newport Tiger ---------------------------------------------------------------------------------------- Index Columbia Large Company Index Columbia Small Company Index Columbia U.S. Treasury Index
Please consider the investment objectives, risks, charges and expenses of a mutual fund carefully before investing. Contact us at 800-345-6611 for a prospectus which contains this and other important information about the fund. Read it carefully before you invest. For complete product information on any Columbia fund, visit our website at www.columbiafunds.com. Columbia Management Group and Columbia Management refer collectively to the various investment advisory subsidiaries of Columbia Management Group, including Columbia Management Advisors, Inc., the registered investment advisor, and Columbia Funds Distributor, Inc. 29 artwork: hands on keyboard. Caption: "eDelivery" Help your fund reduce printing and postage costs! Elect to get your shareholder reports by electronic delivery. With Columbia's eDelivery program, you receive an e-mail message when your shareholder report becomes available online. If your fund account is registered with Columbia Funds, you can sign up quickly and easily on our website at www.columbiafunds.com. Please note -- if you own your fund shares through a financial institution, contact the institution to see if it offers electronic delivery. If you own your fund shares through a retirement plan, electronic delivery may not be available to you. Columbia Dividend Income Fund SEMIANNUAL REPORT, MARCH 31, 2004 PRSRT STD U.S. POSTAGE PAID HOLLISTON, MA PERMIT NO. 20 [LOGO]: COLUMBIA FUNDS A MEMBER OF COLUMBIA MANAGEMENT GROUP (C)2004 COLUMBIA FUNDS DISTRIBUTOR, INC. ONE FINANCIAL CENTER, BOSTON, MA 02111-2621 800.345.6611 www.columbiafunds.com G-03/638R-0304 (05/04) 04/1085 [GRAPHIC] COLUMBIA GROWTH STOCK FUND SEMIANNUAL REPORT MARCH 31, 2004 [COLUMBIAFUNDS(R) LOGO] A MEMBER OF COLUMBIA MANAGEMENT GROUP TABLE OF CONTENTS Fund Profile 1 Performance Information 2 Economic Update 3 Portfolio Manager's Report 4 Financial Statements 6 Investment Portfolio 7 Statement of Assets and Liabilities 9 Statement of Operations 10 Statement of Changes in Net Assets 11 Notes to Financial Statements 12 Financial Highlights 17 Important Information About This Report 21
Economic and market conditions change frequently. There is no assurance that trends described in this report will continue or commence. NOT FDIC MAY LOSE VALUE INSURED ----------------- NO BANK GUARANTEE TO OUR FELLOW SHAREHOLDERS COLUMBIA GROWTH STOCK FUND DEAR SHAREHOLDER: We are pleased to let you know that FleetBoston Financial Corporation and Bank of America Corporation have merged, effective April 1, 2004. As a result of the merger, Columbia Management Group became part of the Bank of America family of companies. Looking ahead, we believe this merger will be a real benefit to our shareholders. Preserving and leveraging our strengths, the combined organization intends to deliver additional research and management capabilities, as well as new products to you. There are no immediate changes planned for fund names or customer service contacts. As always, we will provide you with updates at www.columbiafunds.com or through other communications, such as newsletters and shareholder reports. As you might know, on March 15, 2004, FleetBoston Financial announced an agreement in principle with the staff of the Securities and Exchange Commission ("SEC") and the New York Attorney General to settle charges involving market timing in Columbia Management mutual funds. (Bank of America came to a similar settlement in principle at the same time.) The agreement requires the final approval of the SEC. This action reflects our full cooperation with the investigation and our strong wish to put this regrettable situation behind us. Columbia Management has taken and will continue to take steps to strengthen policies, procedures and oversight to curb frequent trading of Columbia fund shares. We want you to know that all of the members of your fund's Board of Trustees are independent of the fund's advisor and its affiliates. In addition, the board has been energetic over the past year in strengthening its capacity to oversee the Columbia funds. Recently, the Board of Trustees: - - APPOINTED A CHIEF COMPLIANCE OFFICER OF THE COLUMBIA FUNDS, WHO REPORTS DIRECTLY TO EACH FUND'S AUDIT COMMITTEE. TRUSTEES WERE ALSO ASSIGNED TO FOUR SEPARATE INVESTMENT OVERSIGHT COMMITTEES, EACH DEDICATED TO MONITORING PERFORMANCE OF INDIVIDUAL FUNDS. - - VOTED TO DOUBLE THE REQUIRED INVESTMENT BY EACH TRUSTEE IN THE COLUMBIA FUNDS -- TO FURTHER ALIGN THE INTERESTS OF THE TRUSTEES WITH THOSE OF OUR FUND SHAREHOLDERS. AT THE SAME TIME, NEW POLICIES WERE INSTITUTED REQUIRING ALL INVESTMENT PERSONNEL AND TRUSTEES TO HOLD THEIR COLUMBIA FUND SHARES FOR A MINIMUM OF ONE YEAR (UNLESS EXTRAORDINARY CIRCUMSTANCES WARRANT AN EXCEPTION TO BE GRANTED BY SENIOR EXECUTIVES OF THE ADVISOR FOR INVESTMENT PERSONNEL AND BY A DESIGNATED COMMITTEE FOR THE BOARD). Both your fund's trustees and Columbia Management are committed to serving the interests of our shareholders, and we will continue to work hard to help you achieve your financial goals. In the pages that follow, you'll find valuable information about the economic environment during the period and the performance of your Columbia fund. These discussions are followed by financial statements for your fund. We hope that you will take time to read this report and discuss it with your financial advisor if you have any questions. As always, thank you for choosing Columbia funds. It is a privilege to play a role in your financial future. Sincerely, /s/ Thomas C. Theobald /s/ J. Kevin Connaughton Thomas C. Theobald J. Kevin Connaughton Chairman, Board of Trustees President, Columbia Funds J. Kevin Connaughton was named president of Columbia Funds on February 27, 2004. FUND PROFILE COLUMBIA GROWTH STOCK FUND The information below gives you a snapshot of your fund at the end of the reporting period. Your fund is actively managed and the composition of its portfolio will change over time. TOP 5 SECTORS AS OF 03/31/04 (%) Information technology 37.1 Health care 20.8 Consumer staples 13.0 Consumer discretionary 12.3 Financials 8.0
TOP 10 HOLDINGS AS OF 03/31/04 (%) Microsoft 4.7 General Electric 4.7 Medtronic 4.2 Wal-Mart Stores 4.0 Pfizer 3.9 Cisco Systems 3.9 Xilinx 3.6 American International Group 3.5 Cardinal Health 3.5 Schlumberger 3.4
Sector breakdowns and portfolio holdings are calculated as a percentage of net assets. (C)2004 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. The Morningstar Style Box(TM) reveals a fund's investment strategy. For equity funds the vertical axis shows the market capitalization of the stocks owned and the horizontal axis shows investment style (value, blend or growth). For fixed-income funds the vertical axis shows the average credit quality of the bonds owned, and the horizontal axis shows interest rate sensitivity as measured by a bond's duration (short, intermediate or long). All of these numbers are drawn from the data most recently provided by the fund and entered into Morningstar's database as of month-end. Although the data are gathered from reliable sources, Morningstar cannot guarantee completeness and accuracy. As of 03/31/2004. [SIDENOTE] SUMMARY - - FOR THE SIX-MONTH PERIOD ENDED MARCH 31, 2004, THE FUND'S CLASS A SHARES RETURNED 7.14% WITHOUT SALES CHARGE. - - THE FUND TRAILED BOTH ITS BENCHMARK, THE RUSSELL 1000 GROWTH INDEX, AND ITS PEER GROUP, THE MORNINGSTAR(R) LARGE GROWTH CATEGORY. - - RELATIVE PERFORMANCE SUFFERED AS MEGA-CAP, HIGH-QUALITY STOCKS MOVED OUT OF FAVOR. THE FUND'S ABOVE-AVERAGE STAKE IN TECHNOLOGY ALSO HURT RETURNS. CLASS A SHARES 7.14% RUSSELL 1000 GROWTH INDEX 11.28%
OBJECTIVE Seeks long-term growth of capital TOTAL NET ASSETS $811.2 million MORNINGSTAR STYLE BOX [GRAPHIC] 1 PERFORMANCE INFORMATION COLUMBIA GROWTH STOCK FUND [CHART] VALUE OF A $10,000 INVESTMENT 04/01/94 - 03/31/04
CLASS A SHARES WITHOUT SALES CHARGE CLASS A SHARES WITH SALES CHARGE RUSSELL 1000 GROWTH INDEX S&P 500 INDEX 4/1/94 $ 10,000 $ 9,425 $ 10,000 $ 10,000 4/30/94 $ 10,000 $ 9,425 $ 10,046 $ 10,128 5/31/94 $ 10,191 $ 9,605 $ 10,199 $ 10,294 6/30/94 $ 9,708 $ 9,150 $ 9,897 $ 10,042 7/31/94 $ 9,943 $ 9,371 $ 10,235 $ 10,371 8/31/94 $ 10,461 $ 9,859 $ 10,805 $ 10,796 9/30/94 $ 10,261 $ 9,671 $ 10,660 $ 10,532 10/31/94 $ 10,383 $ 9,786 $ 10,910 $ 10,769 11/30/94 $ 10,109 $ 9,528 $ 10,560 $ 10,377 12/31/94 $ 10,213 $ 9,626 $ 10,737 $ 10,531 1/31/95 $ 10,324 $ 9,730 $ 10,967 $ 10,803 2/28/95 $ 10,666 $ 10,053 $ 11,427 $ 11,225 3/31/95 $ 10,953 $ 10,323 $ 11,760 $ 11,556 4/30/95 $ 11,250 $ 10,603 $ 12,018 $ 11,895 5/31/95 $ 11,482 $ 10,822 $ 12,436 $ 12,371 6/30/95 $ 11,944 $ 11,258 $ 12,916 $ 12,658 7/31/95 $ 12,383 $ 11,671 $ 13,453 $ 13,079 8/31/95 $ 12,514 $ 11,795 $ 13,468 $ 13,111 9/30/95 $ 13,154 $ 12,397 $ 14,089 $ 13,665 10/31/95 $ 13,079 $ 12,327 $ 14,099 $ 13,615 11/30/95 $ 13,708 $ 12,919 $ 14,647 $ 14,213 12/31/95 $ 13,853 $ 13,056 $ 14,731 $ 14,487 1/31/96 $ 14,147 $ 13,333 $ 15,223 $ 14,980 2/29/96 $ 14,335 $ 13,511 $ 15,501 $ 15,119 3/31/96 $ 14,507 $ 13,673 $ 15,521 $ 15,264 4/30/96 $ 14,678 $ 13,834 $ 15,930 $ 15,489 5/31/96 $ 15,309 $ 14,429 $ 16,486 $ 15,888 6/30/96 $ 15,474 $ 14,585 $ 16,509 $ 15,949 7/31/96 $ 14,529 $ 13,694 $ 15,541 $ 15,244 8/31/96 $ 14,894 $ 14,037 $ 15,942 $ 15,565 9/30/96 $ 15,923 $ 15,007 $ 17,103 $ 16,442 10/31/96 $ 16,254 $ 15,319 $ 17,205 $ 16,896 11/30/96 $ 17,150 $ 16,164 $ 18,498 $ 18,173 12/31/96 $ 16,755 $ 15,792 $ 18,135 $ 17,813 1/31/97 $ 18,221 $ 17,174 $ 19,406 $ 18,926 2/28/97 $ 17,855 $ 16,828 $ 19,274 $ 19,074 3/31/97 $ 16,714 $ 15,753 $ 18,232 $ 18,290 4/30/97 $ 18,029 $ 16,993 $ 19,442 $ 19,382 5/31/97 $ 19,194 $ 18,091 $ 20,846 $ 20,562 6/30/97 $ 20,077 $ 18,923 $ 21,680 $ 21,484 7/31/97 $ 21,627 $ 20,384 $ 23,596 $ 23,194 8/31/97 $ 20,187 $ 19,026 $ 22,216 $ 21,895 9/30/97 $ 21,196 $ 19,977 $ 23,309 $ 23,095 10/31/97 $ 20,734 $ 19,542 $ 22,446 $ 22,323 11/30/97 $ 21,215 $ 19,995 $ 23,400 $ 23,357 12/31/97 $ 22,057 $ 20,789 $ 23,663 $ 23,759 1/31/98 $ 21,980 $ 20,716 $ 24,370 $ 24,022 2/28/98 $ 23,558 $ 22,204 $ 26,203 $ 25,754 3/31/98 $ 24,588 $ 23,174 $ 27,248 $ 27,073 4/30/98 $ 24,920 $ 23,487 $ 27,624 $ 27,346 5/31/98 $ 24,646 $ 23,228 $ 26,840 $ 26,876 6/30/98 $ 26,129 $ 24,627 $ 28,482 $ 27,967 7/31/98 $ 25,771 $ 24,289 $ 28,294 $ 27,671 8/31/98 $ 21,315 $ 20,090 $ 24,047 $ 23,670 9/30/98 $ 22,191 $ 20,915 $ 25,894 $ 25,187 10/31/98 $ 23,931 $ 22,555 $ 27,976 $ 27,234 11/30/98 $ 25,702 $ 24,224 $ 30,105 $ 28,885 12/31/98 $ 27,691 $ 26,099 $ 32,820 $ 30,549 1/31/99 $ 30,031 $ 28,305 $ 34,747 $ 31,826 2/28/99 $ 29,182 $ 27,504 $ 33,159 $ 30,836 3/31/99 $ 31,029 $ 29,245 $ 34,907 $ 32,069 4/30/99 $ 30,511 $ 28,756 $ 34,952 $ 33,310 5/31/99 $ 29,693 $ 27,986 $ 33,879 $ 32,524 6/30/99 $ 31,893 $ 30,059 $ 36,250 $ 34,329 7/31/99 $ 30,876 $ 29,100 $ 35,098 $ 33,258 8/31/99 $ 30,480 $ 28,728 $ 35,670 $ 33,095 9/30/99 $ 30,179 $ 28,443 $ 34,921 $ 32,188 10/31/99 $ 32,041 $ 30,198 $ 37,557 $ 34,226 11/30/99 $ 33,505 $ 31,578 $ 39,585 $ 34,921 12/31/99 $ 37,831 $ 35,655 $ 43,702 $ 36,978 1/31/2000 $ 37,899 $ 35,719 $ 41,652 $ 35,121 2/29/2000 $ 41,662 $ 39,266 $ 43,689 $ 34,458 3/31/2000 $ 43,799 $ 41,281 $ 46,817 $ 37,827 4/30/2000 $ 41,622 $ 39,229 $ 44,589 $ 36,689 5/31/2000 $ 38,417 $ 36,208 $ 42,342 $ 35,937 6/30/2000 $ 41,840 $ 39,435 $ 45,551 $ 36,824 7/31/2000 $ 40,426 $ 38,102 $ 43,652 $ 36,250 8/31/2000 $ 44,340 $ 41,790 $ 47,602 $ 38,501 9/30/2000 $ 40,752 $ 38,409 $ 43,099 $ 36,468 10/31/2000 $ 37,578 $ 35,417 $ 41,060 $ 36,315 11/30/2000 $ 32,433 $ 30,569 $ 35,008 $ 33,453 12/31/2000 $ 33,539 $ 31,611 $ 33,902 $ 33,617 1/31/2001 $ 34,653 $ 32,660 $ 36,244 $ 34,811 2/28/2001 $ 30,425 $ 28,676 $ 30,090 $ 31,636 3/31/2001 $ 28,159 $ 26,539 $ 26,816 $ 29,630 4/30/2001 $ 30,848 $ 29,074 $ 30,209 $ 31,933 5/31/2001 $ 30,018 $ 28,292 $ 29,765 $ 32,147 6/30/2001 $ 28,808 $ 27,152 $ 29,074 $ 31,365 7/31/2001 $ 27,402 $ 25,827 $ 28,347 $ 31,058 8/31/2001 $ 25,273 $ 23,820 $ 26,028 $ 29,114 9/30/2001 $ 23,031 $ 21,707 $ 23,431 $ 26,761 10/31/2001 $ 23,722 $ 22,358 $ 24,661 $ 27,272 11/30/2001 $ 25,656 $ 24,181 $ 27,031 $ 29,364 12/31/2001 $ 25,510 $ 24,043 $ 26,979 $ 29,623 1/31/2002 $ 24,747 $ 23,324 $ 26,502 $ 29,190 2/28/2002 $ 23,537 $ 22,183 $ 25,402 $ 28,627 3/31/2002 $ 24,601 $ 23,186 $ 26,281 $ 29,703 4/30/2002 $ 23,203 $ 21,869 $ 24,136 $ 27,903 5/31/2002 $ 22,765 $ 21,456 $ 23,552 $ 27,697 6/30/2002 $ 20,937 $ 19,733 $ 21,374 $ 25,725 7/31/2002 $ 19,113 $ 18,014 $ 20,198 $ 23,721 8/31/2002 $ 19,035 $ 17,940 $ 20,259 $ 23,875 9/30/2002 $ 17,150 $ 16,164 $ 18,158 $ 21,280 10/31/2002 $ 18,044 $ 17,006 $ 19,823 $ 23,152 11/30/2002 $ 19,092 $ 17,994 $ 20,899 $ 24,516 12/31/2002 $ 17,887 $ 16,859 $ 19,455 $ 23,077 1/31/2003 $ 17,576 $ 16,566 $ 18,982 $ 22,472 2/28/2003 $ 17,091 $ 16,108 $ 18,895 $ 22,135 3/31/2003 $ 17,460 $ 16,456 $ 19,247 $ 22,350 4/30/2003 $ 18,801 $ 17,720 $ 20,669 $ 24,192 5/31/2003 $ 19,694 $ 18,562 $ 21,700 $ 25,466 6/30/2003 $ 19,771 $ 18,634 $ 22,000 $ 25,792 7/31/2003 $ 20,431 $ 19,257 $ 22,548 $ 26,246 8/31/2003 $ 20,801 $ 19,605 $ 23,109 $ 26,758 9/30/2003 $ 20,121 $ 18,964 $ 22,862 $ 26,475 10/31/2003 $ 21,189 $ 19,971 $ 24,147 $ 27,973 11/30/2003 $ 21,656 $ 20,410 $ 24,400 $ 28,219 12/31/2003 $ 22,297 $ 21,015 $ 25,244 $ 29,698 1/31/2004 $ 22,355 $ 21,069 $ 25,759 $ 30,244 2/29/2004 $ 22,102 $ 20,831 $ 25,924 $ 30,665 3/31/2004 $ 21,549 $ 20,310 $ 25,441 $ 30,191
The graph and table do not reflect the deduction of taxes a shareholder would pay on fund distributions or the redemeption of fund shares. The Russell 1000 Growth Index is an unmanaged index that measures the performance of those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values. The Standard & Poor's (S&P) 500 Index is an unmanaged index that tracks the performance of 500 widely held, large-capitalization US stocks. As reported in the annual report dated September 30, 2003, the S&P 500 Index was the fund's previous benchmark. Unlike the fund, indices are not investments, do not incur fees or expenses and are not professionally managed. It is not possible to invest directly in an index. Securities in the fund may not match those in the index. AVERAGE ANNUAL TOTAL RETURN AS OF 03/31/04 (%)
SHARE CLASS A B C Z - --------------------------------------------------------------------------------------------- INCEPTION 07/15/02 07/15/02 07/15/02 07/01/58 - --------------------------------------------------------------------------------------------- SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT - --------------------------------------------------------------------------------------------- 6-month (cumulative) 7.14 1.00 6.75 1.75 6.75 5.75 7.45 1-year 23.47 16.35 22.54 17.54 22.57 21.57 24.05 5-year -7.02 -8.12 -7.26 -7.55 -7.25 -7.25 -6.82 10-year 7.98 7.34 7.85 7.85 7.85 7.85 8.10
All results shown assume reinvestment of distributions. The "with sales charge" returns include the maximum 5.75% sales charge for class A shares, the appropriate class B contingent deferred sales charge (CDSC) for the holding period after purchase as follows: through first year--5%, second year--4%, third year--3%, fourth year--3%, fifth year--2%, sixth year--1%, thereafter--0% and the class C CDSC of 1% for the first year only. Performance results reflect any voluntary waivers or reimbursements of fund expenses by the advisor or its affiliates. Absent these waivers or reimbursement arrangements, performance results would have been lower. Performance for different share classes varies based on differences in sales charges and fees associated with each class. The performance information for class A, B, and C shares (newer class shares) includes returns for the fund's class Z shares (the oldest existing fund class) for periods prior to the inception date of the newer share classes. These returns are not restated to reflect any expense differential (e.g., Rule 12b-1 fees and transfer agent fees) between class Z shares and the newer class shares. Had the expense differential been reflected, the returns for the periods prior to the inception of the newer class shares would have been lower. [SIDENOTE] PERFORMANCE OF A $10,000 INVESTMENT 04/01/94 - 03/31/04 ($)
SALES CHARGE: WITHOUT WITH - --------------------------------------- Class A 21,549 20,310 Class B 21,282 21,282 Class C 21,284 21,284 Class Z 21,787 n/a
Performance data quoted represents past performance and current performance may be lower or higher. Past performance is no guarantee of future results. The investment return and principal value will fluctuate so that shares may be worth more or less than the original cost. Please visit www.columbiafunds.com for daily and most recent month-end performance updates. 2 ECONOMIC UPDATE COLUMBIA GROWTH STOCK FUND The US economy moved ahead during the six-month reporting period that began October 1, 2003 and ended March 31, 2004. A burst of strength in the third quarter of 2003, for which annualized GDP was reported at 8.2%, was followed by fourth quarter growth of 4.1%. That was still comfortably ahead of the economy's long-term average growth rate of 3.0%. GDP growth for first quarter of 2004 was 4.2%. Although job growth was slow to catch on, the economy showed signs of improvement on all fronts. Consumer spending rose as a sizeable package of tax cuts, implemented in 2003, gave disposable income a boost. Low interest rates spurred a new round of mortgage refinancing late in the period. Consumer confidence slipped late in the period as the outlook for the labor market remained clouded despite a significant pick-up in the new jobs added in March. Nevertheless, housing and retail sales showed steady gains throughout the period. After two years of holding back, the business sector began to show signs of improvement late in 2003. Business spending on technology-related items rose as corporate profits improved. Spending on capital equipment also picked up. US STOCKS HEADED HIGHER The US stock market snapped a three-year losing streak in 2003, but its rate of return slowed early in 2004 in response to a mixed job outlook and renewed fears about terrorism. The S&P 500 Index returned 14.08% for this six-month period. Small company stocks were even stronger. The Russell 2000 Index, an unmanaged index that tracks the performance of 2,000 small US companies based on total market capitalizations, returned 21.69% for the period. INTERNATIONAL STOCK MARKETS REPORTED STRONG RETURNS A modest rebound in economic growth and a declining US dollar helped international stock markets post strong returns. The MSCI EAFE Index, a broad measure of performance of 21 developed equity markets in Europe, Australasia (which includes Australia and New Zealand) and the Far East, returned 22.16% for the period. European stock markets responded to improving economic data and relatively low interest rates. Japan's economy continued to report steady but modest growth, and its improvement was reflected in strong stock market returns. The stock markets of Korea, Malaysia and Taiwan scored double-digit gains during the period as did those of Colombia and Mexico. BONDS DELIVERED RESPECTABLE GAINS A growing economy continued to boost investor enthusiasm for high-yield bonds, which led the fixed-income markets during the period. The six-month return for the Merrill Lynch US High Yield, Cash Pay Index was 8.21%. However, high-yield bonds slipped in the second half of this reporting period. US Treasury bonds gained ground and other segments of the bond market also delivered respectable gains as interest rates declined. The Lehman Brothers Aggregate Bond Index, a broad measure of investment-grade bond performance, returned 2.98%. However, money market fund yields remained below 1%. [SIDENOTE] SUMMARY FOR THE SIX-MONTH PERIOD ENDED MARCH 31, 2004 - - STOCK MARKETS AROUND THE WORLD BENEFITED FROM A PICK-UP IN ECONOMIC GROWTH AND AN INCREASE IN CORPORATE PROFITS. BOTH THE S&P 500 INDEX AND THE MSCI EAFE INDEX POSTED DOUBLE-DIGIT RETURNS THIS PERIOD. S&P 500 INDEX 14.08% MSCI EAFE INDEX 22.16%
- - PERFORMANCE IN THE FIXED-INCOME UNIVERSE WAS LED BY HIGH-YIELD BONDS. AS MEASURED BY THE MERRILL LYNCH US HIGH YIELD, CASH PAY INDEX, THIS SECTOR POSTED A RETURN MORE THAN FIVE PERCENTAGE POINTS HIGHER THAN THE RETURN FOR INVESTMENT-GRADE BONDS, AS MEASURED BY THE LEHMAN BROTHERS AGGREGATE BOND INDEX. MERRILL LYNCH INDEX 8.21% LEHMAN INDEX 2.98%
The S&P 500 Index is an unmanaged index that tracks the performance of 500 widely held, large-capitalization US stocks. The MSCI EAFE Index is an unmanaged, market-weighted index composed of companies representative of the market structure of 21 developed market countries in Europe, Australasia and the Far East. The Merrill Lynch US High Yield, Cash Pay Index is an unmanaged index that tracks the performance of non-investment-grade corporate bonds. The Lehman Brothers Aggregate Bond Index is a market value-weighted index that tracks fixed-rate, publicly placed, dollar-denominated and non-convertible investment grade debt issues. 3 PORTFOLIO MANAGER'S REPORT COLUMBIA GROWTH STOCK FUND For the six-month period ended March 31, 2004, Columbia Growth Stock Fund class A shares returned 7.14% without sales charge. The fund trailed the Russell 1000 Growth Index, which returned 11.28% during the same period. The fund also was behind the Morningstar(R) Large Growth Category average of 11.63%.(1) Our focus on high quality, large company stocks hampered performance. Investors favored the more speculative stocks of smaller companies during the period. In addition, the fund had a sizable stake in technology, which suffered amid concerns that stock prices had climbed too far, too fast. LONG-TERM FOCUS ON LARGEST GROWTH COMPANIES We repositioned the fund early in the period to focus on companies with superior longer-term prospects for growth and profitability. In seeking to create a diversified, yet concentrated portfolio, we invested in high quality names that we expect to increase in value over time. We targeted well-run companies with strong business prospects and proprietary competitive advantages. Although many of these stocks underperformed during the period, we believe the underlying companies generally performed well and the stocks' longer-term appreciation potential remains attractive. OPPORTUNITY FOR RAPID GROWTH IN TECHNOLOGY SECTOR Within technology, we found a disproportionate share of attractive stocks. Technology companies have the opportunity to develop innovative products with the potential to expand existing markets and create new markets on a global basis. Unfortunately, many tech stocks, while producing strong revenue and earnings growth, suffered amid concerns that they could not sustain the strong run they had in 2003. Microsoft, the dominant provider of personal computer software and a leader in enterprise operating systems, also faced anti-trust suits in the United States and Europe that worried investors. Novellus Systems, which provides sophisticated equipment used to manufacture semiconductors, was a disappointing performer despite a strong uptrend in orders from customers. A few tech holdings rallied despite the unfavorable environment, including Xilinx, a company that makes programmable semiconductors, and Cisco Systems, which dominates the data communications industry. (1) (C)2004, Morningstar, Inc. All rights reserved. The information contained herein is the proprietary information of Morningstar, Inc., may not be copied or redistributed for any purpose and may only be used for noncommercial, personal purposes. The information contained herein is not represented or warranted to be accurate, correct, complete or timely. Morningstar, Inc. shall not be responsible for investment decisions, damages or other losses resulting from the use of this information. Past performance is no guarantee of future results. Morningstar, Inc. has not granted consent for it to be considered or deemed an "expert" under the Securities Act of 1933. [SIDENOTE] NET ASSET VALUE PER SHARE AS OF 03/31/04 ($) Class A 11.10 Class B 10.60 Class C 10.59 Class Z 8.94
HOLDINGS DISCUSSED IN THIS REPORT AS OF 03/31/04 (%) Microsoft 4.7 Novellus Systems 2.3 Xilinx 3.6 Cisco Systems 3.9 Pfizer 3.9 Amgen 2.8 Viacom 2.9 Comcast 2.6
Your fund is actively managed and the composition of its portfolio will change over time. Information provided is calculated as a percentage of net assets. 4 SIZABLE STAKES IN HEALTH CARE AND MEDIA In the health care sector, the fund owned a mix of pharmaceutical, biotechnology and medical device companies. Concerns about patent expirations, product pipelines and prospective political developments dampened investors' enthusiasm for the pharmaceutical industry. Pfizer, however, which we consider the best-run major drug company, made a significant recovery from earlier lows. Amgen, a biotech company, underperformed as investors expressed concerns regarding the company's ability to maintain its record of superior performance. Media stocks did not perform as well as expected in a recovering economy, when strong corporate profits typically drive increased spending on advertising. The fund's investment in Viacom detracted from performance as investors focused on an apparent delay in the recovery of the company's radio business. We expect the stock to benefit if advertisers increase their spending on Viacom's diversified media properties. Comcast, the largest cable television provider, gave up its earlier gains following its announcement of an offer to acquire the Walt Disney Company. OPTIMISTIC OUTLOOK FOR GROWTH STOCKS Looking ahead, we believe that large-cap growth stocks are poised to benefit from rapid technological change that helps companies improve their products, create new businesses and change the way they operate. The possibility of stable inflation rates, continued improvements in productivity and a long economic cycle also bode well for growth stocks. [PHOTO OF PAUL BLAUSTEIN] Paul Blaustein, CFA, has managed Columbia Growth Stock Fund since November 2003 and has been with the advisor since 2003. /s/ Paul Blaustein An investment in the fund offers the potential for long-term growth, but also involves certain risks, including stock market fluctuations due to economic and business developments. In addition, the fund's share price will likely be subject to more volatility than the overall stock market because it concentrates in technology stocks. [SIDENOTE] WE BELIEVE THAT LARGE-CAP GROWTH STOCKS ARE POISED TO BENEFIT FROM RAPID TECHNOLOGICAL CHANGE THAT HELPS COMPANIES IMPROVE THEIR PRODUCTS, CREATE NEW BUSINESSES AND CHANGE THE WAY THEY OPERATE. 5 FINANCIAL STATEMENTS MARCH 31, 2004 COLUMBIA GROWTH STOCK FUND A GUIDE TO UNDERSTANDING YOUR FUND'S FINANCIAL STATEMENTS INVESTMENT PORTFOLIO The investment portfolio details all of the fund's holdings and their market value as of the last day of the reporting period. Portfolio holdings are organized by type of asset, industry, country or geographic region (if applicable) to demonstrate areas of concentration and diversification. STATEMENT OF ASSETS AND LIABILITIES This statement details the fund's assets, liabilities, net assets and share price for each share class as of the last day of the reporting period. Net assets are calculated by subtracting all the fund's liabilities (including any unpaid expenses) from the total of the fund's investment and non-investment assets. The share price for each class is calculated by dividing net assets for that class by the number of shares outstanding in that class as of the last day of the reporting period. STATEMENT OF OPERATIONS This statement details income earned by the fund and the expenses accrued by the fund during the reporting period. The Statement of Operations also shows any net gain or loss the fund realized on the sales of its holdings during the period, as well as any unrealized gains or losses recognized over the period. The total of these results represents the fund's net increase or decrease in net assets from operations. STATEMENT OF CHANGES IN NET ASSETS This statement demonstrates how the fund's net assets were affected by its operating results, distributions to shareholders and shareholder transactions (e.g., subscriptions, redemptions and dividend reinvestments) during the reporting period. The Statement of Changes in Net Assets also details changes in the number of shares outstanding. NOTES TO FINANCIAL STATEMENTS These notes disclose the organizational background of the fund, its significant accounting policies (including those surrounding security valuation, income recognition and distributions to shareholders), federal tax information, fees and compensation paid to affiliates and significant risks and contingencies. FINANCIAL HIGHLIGHTS The financial highlights demonstrate how the fund's net asset value per share was affected by the fund's operating results. The financial highlights table also discloses the classes' performance and certain key ratios (e.g., class expenses and net investment income as a percentage of average net assets). 6 INVESTMENT PORTFOLIO MARCH 31, 2004 (UNAUDITED) COLUMBIA GROWTH STOCK FUND
SHARES VALUE ($) - ---------------------------------------------------------------------------------------------------------------------------------- COMMON STOCKS - 99.3% CONSUMER DISCRETIONARY - 12.3% MEDIA - 10.8% Comcast Corp., Class A 722,600 20,767,524 Liberty Media Corp., Class A 1,188,800 13,017,360 News Corp Ltd., ADR 337,900 12,157,642 Time Warner, Inc. (a) 1,044,100 17,603,526 Viacom, Inc., Class B 608,700 23,867,127 Media Total 87,413,179 SPECIALTY RETAIL - 1.5% Home Depot, Inc. 325,400 12,156,944 Specialty Retail Total 12,156,944 ----------- CONSUMER DISCRETIONARY TOTAL 99,570,123 CONSUMER STAPLES - 13.0% FOOD & STAPLES RETAILING - 7.2% Costco Wholesale Corp. (a) 690,900 25,950,204 Wal-Mart Stores, Inc. 547,200 32,662,368 Food & Staples Retailing Total 58,612,572 HOUSEHOLD PRODUCTS - 5.8% Colgate-Palmolive Co. 467,500 25,759,250 Procter & Gamble Co. 205,300 21,531,864 Household Products Total 47,291,114 ----------- CONSUMER STAPLES TOTAL 105,903,686 ENERGY - 3.4% ENERGY EQUIPMENT & SERVICES - 3.4% Schlumberger Ltd. 434,900 27,768,365 Energy Equipment & Services Total 27,768,365 ----------- ENERGY TOTAL 27,768,365 FINANCIALS - 8.0% CAPITAL MARKETS - 1.5% Merrill Lynch & Co., Inc. 205,100 12,215,756 Capital Markets Total 12,215,756 COMMERCIAL BANKS - 3.0% Wells Fargo & Co. 435,900 24,702,453 Commercial Banks Total 24,702,453 INSURANCE - 3.5% American International Group, Inc. 398,300 28,418,705 Insurance Total 28,418,705 ----------- FINANCIALS TOTAL 65,336,914 HEALTH CARE - 20.8% BIOTECHNOLOGY - 2.8% Amgen, Inc. (a) 396,200 23,046,954 Biotechnology Total 23,046,954 HEALTH CARE EQUIPMENT & SUPPLIES - 4.2% Medtronic, Inc. 705,600 33,692,400 Health Care Equipment & Supplies Total 33,692,400 HEALTH CARE PROVIDERS & SERVICES - 3.5% Cardinal Health, Inc. 407,400 28,069,860 Health Care Providers & Services Total 28,069,860 PHARMACEUTICALS - 10.3% Johnson & Johnson 487,700 24,736,144 Novartis AG, ADR 634,200 27,016,920 Pfizer, Inc. 911,800 31,958,590 Pharmaceuticals Total 83,711,654 ----------- HEALTH CARE TOTAL 168,520,868
See notes to investment portfolio. 7
SHARES VALUE ($) - ---------------------------------------------------------------------------------------------------------------------------------- COMMON STOCKS - (CONTINUED) INDUSTRIALS - 4.7% INDUSTRIAL CONGLOMERATES - 4.7% General Electric Co. 1,253,400 38,253,768 Industrial Conglomerates Total 38,253,768 ----------- INDUSTRIALS TOTAL 38,253,768 INFORMATION TECHNOLOGY - 37.1% COMMUNICATIONS EQUIPMENT - 3.9% Cisco Systems, Inc. (a) 1,349,700 31,744,944 Communications Equipment Total 31,744,944 COMPUTERS & PERIPHERALS - 2.8% Dell, Inc. (a) 666,900 22,421,178 Computers & Peripherals Total 22,421,178 IT SERVICES - 1.8% Paychex, Inc. 420,600 14,973,360 IT Services Total 14,973,360 SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 22.2% Altera Corp. (a) 1,198,300 24,505,235 Analog Devices, Inc. 359,500 17,259,595 Applied Materials, Inc. (a) 1,036,200 22,153,956 ASML Holding N.V., N.Y. Registered Shares (a) 1,395,800 25,585,014 Intel Corp. 854,900 23,253,280 Maxim Integrated Products, Inc. 172,800 8,137,152 Microchip Technology, Inc. 408,100 10,839,136 Novellus Systems, Inc. (a) 594,500 18,899,155 Xilinx, Inc. (a) 769,600 29,244,800 Semiconductors & Semiconductor Equipment Total 179,877,323 SOFTWARE - 6.4% Microsoft Corp. 1,540,500 38,466,285 SAP AG, ADR 332,900 13,086,299 Software Total 51,552,584 ----------- INFORMATION TECHNOLOGY TOTAL 300,569,389 ----------- TOTAL COMMON STOCKS (COST OF $668,092,726) 805,923,113 PAR ($) - ---------------------------------------------------------------------------------------------------------------------------------- SHORT-TERM OBLIGATION - 1.0% Repurchase agreement with State Street Bank & Trust Co., dated 03/31/04, due 04/01/04 at 0.960%, collateralized by U.S. Treasury Notes with various maturities to 02/15/07, market value of $7,931,620 (repurchase proceeds $7,772,207) (cost of $7,772,000) 7,772,000 7,772,000 TOTAL INVESTMENTS - 100.3% (COST OF $675,864,726) (b) 813,695,113 OTHER ASSETS & LIABILITIES, NET - (0.3)% (2,478,237) NET ASSETS - 100.0% 811,216,876 NOTES TO INVESTMENT PORTFOLIO:
(a) Non-income producing. (b) Cost for both financial statement and federal income tax purposes is the same.
ACRONYM NAME - ----------------------------------------------------------------------- ADR American Depositary Receipt
See notes to financial statements. 8 STATEMENT OF ASSETS AND LIABILITIES MARCH 31, 2004 (UNAUDITED) COLUMBIA GROWTH STOCK FUND
($) - ------------------------------------------------------------------------------------------------------------------------------ ASSETS Investments, at cost 675,864,726 -------------- Investments, at value 813,695,113 Cash 843 Receivable for: Fund shares sold 382,758 Interest 207 Dividends 517,474 Deferred Trustees' compensation plan 17,292 Other assets 9,806 -------------- Total Assets 814,623,493 LIABILITIES Expense reimbursement due to Investment Advisor 69,150 Payable for: Fund shares repurchased 1,760,164 Investment advisory fee 408,594 Administration fee 92,076 Transfer agent fee 710,069 Pricing and bookkeeping fees 57,924 Trustees' fees 2,228 Distribution and service fees 289,120 Deferred Trustees' fees 17,292 -------------- Total Liabilities 3,406,617 NET ASSETS 811,216,876 COMPOSITION OF NET ASSETS Paid-in capital 1,162,671,636 Accumulated net investment loss (2,827,068) Accumulated net realized loss (486,458,079) Net unrealized appreciation on investments 137,830,387 NET ASSETS 811,216,876 CLASS A Net assets 81,152,936 Shares outstanding 7,310,194 Net asset value per share 11.10(a) Maximum offering price per share ($11.10/0.9425) 11.78(b) CLASS B Net assets 300,045,075 Shares outstanding 28,308,990 Net asset value and offering price per share 10.60(a) CLASS C Net assets 25,855,182 Shares outstanding 2,440,919 Net asset value and offering price per share 10.59(a) CLASS Z Net assets 404,163,683 Shares outstanding 45,184,615 Net asset value, offering and redemption price per share 8.94
(a) Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. (b) On sales of $50,000 or more the offering price is reduced. See notes to financial statements. 9 STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED MARCH 31, 2004 (UNAUDITED) COLUMBIA GROWTH STOCK FUND
($) - ------------------------------------------------------------------------------------------------------------------------------ INVESTMENT INCOME Dividends 3,729,755 Interest 48,633 -------------- Total Investment Income (net of foreign taxes withheld of $77,219) 3,778,388 EXPENSES Investment advisory fee 2,437,921 Administration fee 588,164 Distribution fee: Class A 42,612 Class B 1,193,333 Class C 106,905 Service fee: Class A 106,533 Class B 397,778 Class C 35,635 Transfer agent fee: Class A 205,337 Class B 883,760 Class C 71,006 Class Z 381,727 Pricing and bookkeeping fees 115,873 Trustees' fees 14,387 Custody fee 11,474 Non-recurring costs (See Note 7) 5,562 Costs assumed by Investment Advisor (See Note 7) (5,562) Other expenses 125,499 -------------- Total Expenses 6,717,944 Fees and expenses waived or reimbursed by Transfer Agent - Class Z (104,958) Fees waived by Distributor - Class A (21,306) Custody earnings credit (498) -------------- Net Expenses 6,591,182 -------------- Net Investment Loss (2,812,794) NET REALIZED AND UNREALIZED GAIN Net realized gain on investments 64,617,147 (LOSS) ON INVESTMENTS Net change in unrealized appreciation/depreciation on investments (4,364,268) -------------- Net Gain 60,252,879 -------------- Net Increase in Net Assets from Operations 57,440,085
See notes to financial statements. 10 STATEMENT OF CHANGES IN NET ASSETS COLUMBIA GROWTH STOCK FUND
(UNAUDITED) SIX MONTHS ENDED YEAR ENDED MARCH 31, SEPTEMBER 30, INCREASE (DECREASE) IN NET ASSETS: 2004 ($) 2003 ($) - --------------------------------------------------------------------------------------------------------------------------------- OPERATIONS Net investment loss (2,812,794) (4,504,325) Net realized gain (loss) on investments 64,617,147 (82,513,256) Net change in unrealized appreciation/depreciation on investments (4,364,268) 213,477,987 --------------------------------- Net Increase from Operations 57,440,085 126,460,406 SHARE TRANSACTIONS Class A: Subscriptions 8,067,897 52,887,088 Redemptions (14,749,430) (67,933,556) --------------------------------- Net Decrease (6,681,533) (15,046,468) Class B: Subscriptions 10,044,934 23,561,376 Redemptions (34,632,214) (72,246,627) --------------------------------- Net Decrease (24,587,280) (48,685,251) Class C: Subscriptions 1,558,978 5,839,044 Redemptions (5,593,977) (10,240,886) --------------------------------- Net Decrease (4,034,999) (4,401,842) Class Z: Subscriptions 37,654,634 36,268,004 Redemptions (47,283,918) (72,221,109) --------------------------------- Net Decrease (9,629,284) (35,953,105) Net Decrease from Share Transactions (44,933,096) (104,086,666) --------------------------------- Total Increase in Net Assets 12,506,989 22,373,740 NET ASSETS Beginning of period 798,709,887 776,336,147 End of period (including accumulated net investment loss of $(2,827,068) and $(14,274), respectively) 811,216,876 798,709,887 CHANGES IN SHARES Class A: Subscriptions 715,724 5,514,819 Redemptions (1,316,508) (6,824,132) --------------------------------- Net Decrease (600,784) (1,309,313) Class B: Subscriptions 931,863 2,524,637 Redemptions (3,229,273) (7,881,240) --------------------------------- Net Decrease (2,297,410) (5,356,603) Class C: Subscriptions 145,014 629,913 Redemptions (519,780) (1,111,906) --------------------------------- Net Decrease (374,766) (481,993) Class Z: Subscriptions (a) 4,158,663 4,591,242 Redemptions (a) (5,226,260) (9,410,280) --------------------------------- Net Decrease (1,067,597) (4,819,038)
(a) Capital share activity prior to July 25, 2003 has been restated to reflect a 3-for-1 share split. See notes to financial statements. 11 NOTES TO FINANCIAL STATEMENTS MARCH 31, 2004 (UNAUDITED) COLUMBIA GROWTH STOCK FUND NOTE 1. ORGANIZATION Columbia Growth Stock Fund (the "Fund"), a series of Columbia Funds Trust XI (the "Trust"), is a diversified portfolio. The Trust is a Massachusetts business trust registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. INVESTMENT GOALS The Fund seeks long-term growth of capital. FUND SHARES The Fund may issue an unlimited number of shares, and offers four classes of shares: Class A, Class B, Class C and Class Z. Each share class has its own sales charge and expense structure. Class A shares are subject to a maximum front-end sales charge of 5.75% based on the amount of initial investment. Class A shares purchased without an initial sales charge are subject to a 1.00% contingent deferred sales charge ("CDSC") on shares sold within eighteen months on an original purchase of $1 million to $25 million. Class B shares are subject to a maximum CDSC of 5.00% based upon the holding period after purchase. Class B shares will convert to Class A shares in a certain number of years after purchase, depending on the program under which shares were purchased. Class C shares are subject to a 1.00% CDSC on shares sold within one year after purchase. Class Z shares are offered continuously at net asset value. There are certain restrictions on the purchase of Class Z shares, as described in the Fund's prospectus. On October 13, 2003, the Liberty Growth Stock Fund was renamed Columbia Growth Stock Fund. Also on this date, the Liberty-Stein Roe Funds Investment Trust was renamed Columbia Funds Trust XI. NOTE 2. SIGNIFICANT ACCOUNTING POLICIES USE OF ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. SECURITY VALUATION Equity securities are valued at the last sale price at the close of the principal exchange on which they trade. Unlisted securities or listed securities for which there were no sales during the day are valued at the closing bid price on such exchanges or over-the-counter markets. Short-term debt obligations maturing within 60 days are valued at amortized cost, which approximates market value. Foreign securities are generally valued at the closing price on the foreign exchange or market on which they trade. If any foreign share prices are not readily available as a result of limited share activity, the securities are valued at the last sale price of the local shares in the principal market in which such securities are normally traded. Generally, trading in foreign securities is substantially completed each day at various times prior to the close of the New York Stock Exchange ("NYSE"). The values of such securities used in computing the net asset value of the Fund's shares are determined as of such times. Foreign currency exchange rates are generally determined at 2:00 p.m. Eastern (U.S.) time. Occasionally, events affecting the values of such foreign securities and such exchange rates may occur between the times at which they are determined and the close of the customary trading session of the NYSE, which would not be reflected in the computation of the Fund's net asset value. If events materially affecting the values of such foreign securities occur and it is determined that market quotations are not reliable, then these foreign securities will be valued at their fair value using procedures approved by the Board of Trustees. Investments for which market quotations are not readily available, or quotations which management believes are not appropriate, are valued at fair value under procedures approved by the Board of Trustees. 12 SECURITY TRANSACTIONS Security transactions are accounted for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes. REPURCHASE AGREEMENTS The Fund may engage in repurchase agreement transactions with institutions that the Fund's investment advisor has determined are creditworthy. The Fund, through its custodian, receives delivery of underlying securities collateralizing a repurchase agreement. Collateral is at least equal, at all times, to the value of the repurchase obligation including interest. A repurchase agreement transaction involves certain risks in the event of default or insolvency of the counterparty. These risks include possible delays or restrictions upon the Fund's ability to dispose of the underlying securities and a possible decline in the value of the underlying securities during the period while the Fund seeks to assert its rights. INCOME RECOGNITION Interest income is recorded on the accrual basis. Corporate actions and dividend income are recorded on the ex-date, except for certain foreign securities which are recorded as soon after ex-date as the Fund becomes aware of such, net of non-reclaimable tax withholdings. DETERMINATION OF CLASS NET ASSET VALUES All income, expenses (other than class-specific expenses, as shown on the Statement of Operations), and realized and unrealized gains (losses), are allocated to each class of the Fund on a daily basis, based on the relative net assets of each class, for purposes of determining the net asset value of each class. FEDERAL INCOME TAX STATUS The Fund intends to qualify each year as a "regulated investment company" under Subchapter M of the Internal Revenue Code, as amended, and will distribute substantially all of its taxable income, if any, for its tax year, and as such will not be subject to federal income taxes. In addition, by distributing in each calendar year substantially all of its net investment income, capital gains and certain other amounts, if any, the Fund will not be subject to federal excise tax. Therefore, no federal income or excise tax provision is recorded. DISTRIBUTIONS TO SHAREHOLDERS Distributions to shareholders are recorded on ex-date. Net realized capital gains, if any, are distributed at least annually. NOTE 3. FEDERAL TAX INFORMATION Unrealized appreciation and depreciation at March 31, 2004, based on cost of investments for federal income tax purposes was: Unrealized appreciation $ 156,290,991 Unrealized depreciation (18,460,604) --------------- Net unrealized appreciation $ 137,830,387
The following capital loss carryforwards, determined as of September 30, 2003, may be available to reduce taxable income arising from future net realized gains on investments, if any, to the extent permitted by the Internal Revenue Code:
YEAR OF EXPIRATION CAPITAL LOSS CARRYFORWARDS - -------------------------------------------------------------- 2008 $ 22,583,899 2009 201,991,560 2011 253,937,044 --------------- $ 478,512,503
Of these capital loss carryforwards, $219,806,550 ($22,583,899 expiring 9/30/2008 and $197,222,651 expiring 9/30/2009) and $4,768,909 (expiring 9/30/2009) were obtained upon the Fund's mergers with Liberty Growth Stock Fund and Stein Roe Focus Fund, respectively. Under current tax rules, certain currency and capital losses realized after October 31 may be deferred and treated as occurring on the first day of the following fiscal year. As determined on September 30, 2003, post-October capital losses of $65,292,181 attributed to security transactions were deferred to October 1, 2003. NOTE 4. FEES AND COMPENSATION PAID TO AFFILIATES INVESTMENT ADVISORY FEE Columbia Management Advisors, Inc. ("Columbia") is the investment advisor to the Fund. Prior to April 1, 2004, Columbia was an indirect, wholly owned subsidiary of FleetBoston Financial Corporation ("FleetBoston"). Effective April 1, 2004, FleetBoston was acquired by Bank of America Corporation ("BOA"). Columbia provides administrative and other services. Columbia receives a monthly investment 13 advisory fee based on the Fund's average daily net assets as follows:
AVERAGE DAILY NET ASSETS ANNUAL FEE RATE - ---------------------------------------------------------------------- First $500 million 0.60% Next $500 million 0.55% Next $1 billion 0.50% Over $2 billion 0.45%
For the six months ended March 31, 2004, the Fund's annualized effective investment advisory fee rate was 0.58%. ADMINISTRATION FEE Columbia provides accounting and other services to the Fund for a monthly administration fee based on the Fund's average daily net assets as follows:
AVERAGE DAILY NET ASSETS ANNUAL FEE RATE - ---------------------------------------------------------------------- First $500 million 0.150% Next $500 million 0.125% Next $500 million 0.100% Next $500 million 0.075% Over $2 billion 0.050%
Prior to November 1, 2003, Columbia was entitled to receive a monthly administration fee based on the Fund's average daily net assets as follows:
AVERAGE DAILY NET ASSETS ANNUAL FEE RATE - ---------------------------------------------------------------------- First $500 million 0.150% Next $500 million 0.125% Next $1 billion 0.100% Over $2 billion 0.075%
For the six months ended March 31, 2004, the Fund's annualized effective administration fee rate was 0.14%. PRICING AND BOOKKEEPING FEES Columbia is responsible for providing pricing and bookkeeping services to the Fund under a pricing and bookkeeping agreement. Under a separate agreement (the "Outsourcing Agreement"), Columbia has delegated those functions to State Street Corporation ("State Street"). Columbia pays the total fees collected to State Street under the Outsourcing Agreement. Under its pricing and bookkeeping agreement with the Fund, Columbia receives from the Fund an annual flat fee of $10,000 paid monthly, and in any month that the Fund's average daily net assets exceed $50 million, an additional monthly fee. The additional fee rate is calculated by taking into account the fees payable to State Street under the Outsourcing Agreement. This rate is applied to the average daily net assets of the Fund for that month. The Fund also pays additional fees for pricing services. For the six months ended March 31, 2004, the Fund's annualized effective pricing and bookkeeping fee rate was 0.028%. TRANSFER AGENT FEE Columbia Funds Services, Inc. (the "Transfer Agent"), formerly Liberty Funds Services, Inc., an indirect, wholly owned subsidiary of BOA, provides shareholder services to the Fund. For such services, the Transfer Agent receives a fee, paid monthly, at the annual rate of $28.00 per open account per class. The Transfer Agent also receives reimbursement for certain out-of-pocket expenses. The Transfer Agent has voluntarily agreed to waive a portion of the Class Z transfer agent fee so that such fee (exclusive of out-of-pocket expenses) will not exceed 0.05% annually of the Class Z average daily net assets. The Transfer Agent, at its discretion, may revise or discontinue this arrangement any time. Prior to November 1, 2003, the Transfer Agent was entitled to receive a monthly transfer agent fee at the annual rate of 0.06% of the Fund's average daily net assets plus flat-rate charges based on the number of shareholder accounts and transactions. The Transfer Agent was also entitled to receive reimbursement for certain out-of-pocket expenses. UNDERWRITING DISCOUNTS, SERVICE AND DISTRIBUTION FEES Columbia Funds Distributor, Inc. (the "Distributor"), formerly Liberty Funds Distributor, Inc., an indirect, wholly owned subsidiary of BOA, is the principal underwriter of the Fund. For the six months ended March 31, 2004, the Distributor has retained net underwriting discounts of $11,284 on sales of the Fund's Class A shares and received CDSC fees of $2,508, $438,319 and $3,108 on Class A, Class B and Class C share redemptions, respectively. The Fund has adopted a 12b-1 plan (the "Plan") which requires the payment of a monthly service fee to the Distributor at the annual rate of 0.25% of the average daily net assets attributable to Class A, Class B and Class C shares of the Fund. The Plan also requires the payment of a monthly distribution fee to the Distributor at the annual rates of 0.10%, 0.75% and 14 0.75% of the average daily net assets attributable to Class A, Class B and Class C shares of the Fund, respectively. The Distributor has voluntarily agreed to waive a portion of the Class A share distribution fee so that it will not exceed 0.05% annually of Class A average daily net assets. The CDSC and the fees received from the Plan are used principally as repayment to the Distributor for amounts paid by the Distributor to dealers who sold such shares. CUSTODY CREDITS The Fund has an agreement with its custodian bank under which custody fees may be reduced by balance credits. The Fund could have invested a portion of the assets utilized in connection with the expense offset arrangement in an income-producing asset if it had not entered into such an agreement. FEES PAID TO OFFICERS AND TRUSTEES The Fund pays no compensation to its officers, all of whom are employees of Columbia or its affiliates. The Fund's Trustees may participate in a deferred compensation plan, which may be terminated at any time. Obligations of the plan will be paid solely out of the Fund's assets. NOTE 5. PORTFOLIO INFORMATION For the six months ended March 31, 2004, the cost of purchases and proceeds from sales of securities, excluding short-term obligations, were $382,035,549 and $421,939,921, respectively. NOTE 6. LINE OF CREDIT The Fund and other affiliated funds participate in a $350,000,000 credit facility, which is used for temporary or emergency purposes to facilitate portfolio liquidity. Interest is charged to the Fund based on its borrowings. In addition, the Fund has agreed to pay commitment fees on its pro-rata portion of the unutilized line of credit. The commitment fee is included in "Other expenses" on the Statement of Operations. For the six months ended March 31, 2004, the Fund did not borrow under this arrangement. NOTE 7. DISCLOSURE OF SIGNIFICANT RISKS AND CONTINGENCIES INDUSTRY FOCUS The Fund may focus its investments in certain industries, subjecting it to greater risk than a fund that is more diversified. LEGAL PROCEEDINGS Columbia, the Distributor, and certain of their affiliates (collectively, "The Columbia Group") have received information requests and subpoenas from various regulatory and law enforcement authorities in connection with their investigations of late trading and market timing in mutual funds. The Columbia Group has not uncovered any instances where Columbia or the Distributor were knowingly involved in late trading of mutual fund shares. On February 24, 2004, the Securities and Exchange Commission ("SEC") filed a civil complaint in the United States District Court for the District of Massachusetts against Columbia and the Distributor, alleging that they had violated certain provisions of the federal securities laws in connection with trading activity in mutual fund shares. Also on February 24, 2004, the New York Attorney General ("NYAG") filed a civil complaint in New York Supreme Court, County of New York against Columbia and the Distributor alleging that Columbia and the Distributor had violated certain New York anti-fraud statutes. If either Columbia or the Distributor is unsuccessful in its defense of these proceedings, it could be barred from serving as an investment advisor or distributor for any investment company registered under the Investment Company Act of 1940, as amended (a "registered investment company"). Such results could prevent Columbia, the Distributor or any company that is an affiliated person of Columbia and the Distributor from serving as an investment advisor or distributor for any registered investment company, including your fund. Your fund has been informed by Columbia and the Distributor that, if these results occur, they will seek exemptive relief from the SEC to permit them to continue to serve as your fund's investment advisor and distributor. There is no assurance that such exemptive relief will be granted. On March 15, 2004, Columbia and the Distributor entered into agreements in principle with the SEC Division of Enforcement and 15 NYAG in settlement of the charges. Under the agreements, Columbia and the Distributor agreed, inter alia, to the following conditions: payment of $70 million in disgorgement; payment of $70 million in civil penalties; an order requiring Columbia and the Distributor to cease and desist from violations of the antifraud provisions and other provisions of the federal securities laws; governance changes designed to maintain the independence of the mutual fund boards of trustees and ensure compliance with securities laws and their fiduciary duties; and retention of an independent consultant to review Columbia's and the Distributor's compliance policies and procedures. The agreement requires the final approval of the SEC. In a separate agreement with the NYAG, the Columbia Group has agreed to reduce mutual fund fees by $80 million over a five-year period. As a result of these matters or any adverse publicity or other developments resulting from them, there may be increased redemptions or reduced sales of fund shares, which could increase transaction costs or operating expenses, or have other adverse consequences for the funds. For the six months ended March 31, 2004, Columbia has assumed $5,562 of legal, consulting services and Trustees fees incurred by the Fund in connection with these matters. NOTE 8. SUBSEQUENT EVENT On April 1, 2004, FleetBoston, including the Fund's investment advisor and distributor, was acquired by BOA. The merger did not change the way the Fund is managed, the investment personnel assigned to manage the Fund or the fees paid by the Fund. NOTE 9. CAPITAL ACTIVITY On July 25, 2003, there was a 3-for-1 split on Class Z shares. The accompanying prior period financial highlights for Class Z have been restated to reflect the 3-for-1 split. 16 FINANCIAL HIGHLIGHTS COLUMBIA GROWTH STOCK FUND SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED) SIX MONTHS ENDED YEAR ENDED PERIOD ENDED MARCH 31, SEPTEMBER 30, SEPTEMBER 30, CLASS A SHARES 2004 2003 2002(a) - ------------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 10.36 $ 8.83 $ 9.98 INCOME FROM INVESTMENT OPERATIONS: Net investment loss (b) (0.04) (0.05) (0.01) Net realized and unrealized gain (loss) on investments 0.78 1.58 (1.14) ---------------- ------------- ------------- Total from Investment Operations 0.74 1.53 (1.15) NET ASSET VALUE, END OF PERIOD $ 11.10 $ 10.36 $ 8.83 Total return (c)(d) 7.14%(e) 17.33% (11.52)%(e) RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Operating expenses (f) 1.57%(g) 1.54% 1.63%(g) Interest expense -- --%(h) -- Net expenses (f) 1.57%(g) 1.54% 1.63%(g) Net investment loss (f) (0.67)%(g) (0.53)% (0.41)%(g) Waiver/reimbursement 0.05%(g) 0.05% 0.05%(g) Portfolio turnover rate 46%(e) 108% 71% Net assets, end of period (000's) $ 81,153 $ 81,967 $ 81,442
(a) Class A shares were initially offered on July 15, 2002. Per share data and total return reflect activity from that date. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming no initial sales charge or contingent deferred sales charge. (d) Had the Distributor not waived a portion of expenses, total return would have been reduced. (e) Not annualized. (f) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (g) Annualized. (h) Rounds to less than 0.01%. 17
(UNAUDITED) SIX MONTHS ENDED YEAR ENDED PERIOD ENDED MARCH 31, SEPTEMBER 30, SEPTEMBER 30, CLASS B SHARES 2004 2003 2002(a) - ------------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 9.93 $ 8.52 $ 9.65 INCOME FROM INVESTMENT OPERATIONS: Net investment loss (b) (0.08) (0.11) (0.02) Net realized and unrealized gain (loss) on investments 0.75 1.52 (1.11) --------------- ------------- ------------- Total from Investment Operations 0.67 1.41 (1.13) NET ASSET VALUE, END OF PERIOD $ 10.60 $ 9.93 $ 8.52 Total return (c) 6.75%(d) 16.55% (11.71)%(d) RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Operating expenses (e) 2.34%(f) 2.24% 2.33%(f) Interest expense -- --%(g) -- Net expenses (e) 2.34%(f) 2.24% 2.33%(f) Net investment loss (e) (1.44)%(f) (1.23)% (1.11)%(f) Portfolio turnover rate 46%(d) 108% 71% Net assets, end of period (000's) $ 300,045 $ 303,943 $ 306,561
(a) Class B shares were initially offered on July 15, 2002. Per share data and total return reflect activity from that date. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming no contingent deferred sales charge. (d) Not annualized. (e) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (f) Annualized. (g) Rounds to less than 0.01%. 18
(UNAUDITED) SIX MONTHS ENDED YEAR ENDED PERIOD ENDED MARCH 31, SEPTEMBER 30, SEPTEMBER 30, CLASS C SHARES 2004 2003 2002(a) - ------------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 9.92 $ 8.52 $ 9.64 INCOME FROM INVESTMENT OPERATIONS: Net investment loss (b) (0.07) (0.11) (0.02) Net realized and unrealized gain (loss) on investments 0.74 1.51 (1.10) --------------- ------------- ------------- Total from Investment Operations 0.67 1.40 (1.12) NET ASSET VALUE, END OF PERIOD $ 10.59 $ 9.92 $ 8.52 Total return (c) 6.75%(d) 16.43% (11.62)%(d) RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Operating expenses (e) 2.28%(f) 2.24% 2.33%(f) Interest expense -- --%(g) -- Net expenses (e) 2.28%(f) 2.24% 2.33%(f) Net investment loss (e) (1.38)%(f) (1.23)% (1.11)%(f) Portfolio turnover rate 46%(d) 108% 71% Net assets, end of period (000's) $ 25,855 $ 27,938 $ 28,093
(a) Class C shares were initially offered on July 15, 2002. Per share data and total return reflect activity from that date. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming no contingent deferred sales charge. (d) Not annualized. (e) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (f) Annualized. (g) Rounds to less than 0.01%. 19
(UNAUDITED) SIX MONTHS ENDED MARCH 31, YEAR ENDED SEPTEMBER 30, CLASS Z SHARES 2004 2003(a) 2002(a)(b) 2001(a) 2000(a) 1999(a) - ---------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 8.32 $ 7.05 $ 9.45 $ 19.89 $ 15.73 $ 11.57 INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) (c) --(d) --(d) 0.01(e) (0.01)(e) (0.08)(e) (0.03)(e) Net realized and unrealized gain (loss) on investments 0.62 1.27 (2.41) (7.77) 5.39 4.19 ---------- --------- --------- --------- ----------- --------- Total from Investment Operations 0.62 1.27 (2.40) (7.78) 5.31 4.16 LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net realized gains -- -- -- (2.66) (1.15) -- NET ASSET VALUE, END OF PERIOD $ 8.94 $ 8.32 $ 7.05 $ 9.45 $ 19.89 $ 15.73 Total return (f) 7.45%(g)(h) 17.96%(g) (25.34)%(g) (43.48)% 35.04% 35.98% RATIOS TO AVERAGE NET ASSETS/ SUPPLEMENTAL DATA: Operating expenses (i) 0.92%(j) 1.00% 0.88%(e) 0.95%(e) 0.95%(e) 0.97%(e)(l) Interest expense -- --%(k) -- -- -- -- Net expenses (i) 0.92%(j) 1.00% 0.88%(e) 0.95%(e) 0.95%(e) 0.97%(e)(l) Net investment income (loss) (i) (0.02)%(j) 0.01% 0.08%(e) (0.05)%(e) (0.44)%(e) (0.18)%(e)(l) Waiver/reimbursement 0.05%(j) 0.06% 0.01% -- -- -- Portfolio turnover rate 46%(h) 108% 71% 73%(m) 74%(m) 57%(m) Net assets, end of period (000's) $ 404,164 $ 384,861 $ 360,240 $ 551,474 $ 1,083,271 $ 831,338
(a) Per share data has been restated to reflect a 3-for-1 share split effective July 25, 2003. (b) On July 15, 2002, the Stein Roe Growth Stock Fund was redesignated Liberty Growth Stock Fund, Class Z shares. (c) Per share data was calculated using average shares outstanding during the period. (d) Rounds to less than $0.01 per share. (e) Per share amounts and ratios reflect income and expenses inclusive of the Fund's proportionate share of the income and expenses of the SR&F Growth Stock Portfolio prior to the termination of their master/feeder fund structure on July 12, 2002. (f) Total return at net asset value assuming all distributions reinvested. (g) Had the Investment Advisor/Transfer Agent not waived a portion of expenses, total return would have been reduced. (h) Not annualized. (i) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (j) Annualized. (k) Round to less than 0.01%. (l) During the year ended September 30, 1999, the Fund experienced a one-time reduction in its expenses of three basis points as a result of expenses accrued in a prior period. The Fund's ratios disclosed above reflect the actual rate at which expenses were incurred throughout the year ended September 30, 1999 without the reduction. (m) Portfolio turnover rate disclosed is for the SR&F Growth Stock Portfolio. 20 IMPORTANT INFORMATION ABOUT THIS REPORT COLUMBIA GROWTH STOCK FUND TRANSFER AGENT Columbia Funds Services, Inc. P.O. Box 8081 Boston MA 02266-8081 800.345.6611 DISTRIBUTOR Columbia Funds Distributor, Inc. One Financial Center Boston MA 02111 INVESTMENT ADVISOR Columbia Management Advisors, Inc. 100 Federal Street Boston MA 02110 The fund mails one shareholder report to each shareholder address. If you would like more than one report, please call shareholder services at 800-345-6611 and additional reports will be sent to you. This report has been prepared for shareholders of Columbia Growth Stock Fund. This report may also be used as sales literature when preceded or accompanied by the current prospectus which provides details of sales charges, investment objectives and operating policies of the fund and with the most recent copy of the Columbia Funds Performance Update. A description of the policies and procedures that the fund uses to determine how to vote proxies relating to its portfolio securities is available (i) without charge, upon request, by calling 800-345-6611 and (ii) on the Securities and Exchange Commission's website at http://www.sec.gov. 21 [GRAPHIC] Help your fund reduce printing and postage costs! Elect to get your shareholder reports by electronic delivery. With Columbia's eDelivery program, you receive an e-mail message when your shareholder report becomes available online. If your fund account is registered with Columbia Funds, you can sign up quickly and easily on our website at www.columbiafunds.com. Please note -- if you own your fund shares through a financial institution, contact the institution to see if it offers electronic delivery. If you own your fund shares through a retirement plan, electronic delivery may not be available to you. COLUMBIA GROWTH STOCK FUND SEMIANNUAL REPORT, MARCH 31, 2004 PRSRT STD U.S. POSTAGE PAID HOLLISTON, MA PERMIT NO. 20 [COLUMBIAFUNDS(R) LOGO] A MEMBER OF COLUMBIA MANAGEMENT GROUP (C)2004 COLUMBIA FUNDS DISTRIBUTOR, INC. ONE FINANCIAL CENTER, BOSTON, MA 02111-2621 800.345.6611 www.columbiafunds.com 755-03/634R-0304 (05/04) 04/1102 [GRAPHIC] COLUMBIA THEMATIC EQUITY FUNDS SEMIANNUAL REPORT MARCH 31, 2004 [COLUMBIAFUNDS(R) LOGO] A MEMBER OF COLUMBIA MANAGEMENT GROUP TABLE OF CONTENTS Economic Update 1 Columbia Global Thematic Equity Fund Fund Profile 2 Performance Information 3 Portfolio Managers' Report 4 Columbia European Thematic Equity Fund Fund Profile 6 Performance Information 7 Portfolio Managers' Report 8 Financial Statements 10 Investment Portfolios 10 Statements of Assets and Liabilities 17 Statements of Operations 18 Statements of Changes in Net Assets 19 Notes to Financial Statements 20 Financial Highlights 25 Important Information About This Report 27 Columbia Funds 28
Economic and market conditions change frequently. There is no assurance that the trends described in this report will continue or commence. NOT FDIC MAY LOSE VALUE INSURED ----------------- NO BANK GUARANTEE TO OUR FELLOW SHAREHOLDERS COLUMBIA THEMATIC EQUITY FUNDS DEAR SHAREHOLDER: We are pleased to let you know that FleetBoston Financial Corporation and Bank of America Corporation have merged, effective April 1, 2004. As a result of the merger, Columbia Management Group became part of the Bank of America family of companies. Looking ahead, we believe this merger will be a real benefit to our shareholders. Preserving and leveraging our strengths, the combined organization intends to deliver additional research and management capabilities, as well as new products to you. There are no immediate changes planned for fund names or customer service contacts. As always, we will provide you with updates at www.columbiafunds.com or through other communications, such as newsletters and shareholder reports. As you might know, on March 15, 2004, FleetBoston Financial announced an agreement in principle with the staff of the Securities and Exchange Commission ("SEC") and the New York Attorney General to settle charges involving market timing in Columbia Management mutual funds. (Bank of America came to a similar settlement in principle at the same time.) The agreement requires the final approval of the SEC. This action reflects our full cooperation with the investigation and our strong wish to put this regrettable situation behind us. Columbia Management has taken and will continue to take steps to strengthen policies, procedures and oversight to curb frequent trading of Columbia fund shares. We want you to know that all of the members of your fund's Board of Trustees are independent of the fund's advisor and its affiliates. In addition, the board has been energetic over the past year in strengthening its capacity to oversee the Columbia funds. Recently, the Board of Trustees: - - APPOINTED A CHIEF COMPLIANCE OFFICER OF THE COLUMBIA FUNDS, WHO REPORTS DIRECTLY TO EACH FUND'S AUDIT COMMITTEE. TRUSTEES WERE ALSO ASSIGNED TO FOUR SEPARATE INVESTMENT OVERSIGHT COMMITTEES, EACH DEDICATED TO MONITORING PERFORMANCE OF INDIVIDUAL FUNDS. - - VOTED TO DOUBLE THE REQUIRED INVESTMENT BY EACH TRUSTEE IN THE COLUMBIA FUNDS -- TO FURTHER ALIGN THE INTERESTS OF THE TRUSTEES WITH THOSE OF OUR FUND SHAREHOLDERS. AT THE SAME TIME, NEW POLICIES WERE INSTITUTED REQUIRING ALL INVESTMENT PERSONNEL AND TRUSTEES TO HOLD THEIR COLUMBIA FUND SHARES FOR A MINIMUM OF ONE YEAR (UNLESS EXTRAORDINARY CIRCUMSTANCES WARRANT AN EXCEPTION TO BE GRANTED BY SENIOR EXECUTIVES OF THE ADVISOR FOR INVESTMENT PERSONNEL AND BY A DESIGNATED COMMITTEE FOR THE BOARD). Both your fund's trustees and Columbia Management are committed to serving the interests of our shareholders, and we will continue to work hard to help you achieve your financial goals. In the pages that follow, you'll find valuable information about the economic environment during the period and the performance of your Columbia fund. These discussions are followed by financial statements for your fund. We hope that you will take time to read this report and discuss it with your financial advisor if you have any questions. As always, thank you for choosing Columbia funds. It is a privilege to play a role in your financial future. Sincerely, /s/ Thomas C. Theobald /s/ J. Kevin Connaughton Thomas C. Theobald J. Kevin Connaughton Chairman, Board of Trustees President, Columbia Funds J. Kevin Connaughton was named president of Columbia Funds on February 27, 2004. ECONOMIC UPDATE COLUMBIA THEMATIC EQUITY FUNDS The pace of economic growth picked up around the world during the six-month period from October 1, 2003 through March 31, 2004. The US economy moved ahead during the period at an estimated annualized pace of about 4.0%. In general, Asian economies benefited as consumer and business spending increased. Exporting countries such as Hong Kong and Taiwan also benefited from a worldwide increase in demand for products manufactured in Asia. Growth in Japan was 7.0% in the fourth quarter of 2003, and the outlook is for solid growth in 2004. STOCK MARKETS LIFTED BY FAVORABLE ECONOMIC NEWS Equity market performance was stronger worldwide during the first half of this reporting period than in the second half. Lower-than-expected job growth in the US early in the first quarter of 2004 weighed on the world's stock markets because so many are linked to activity in the United States. Nevertheless, most major stock markets delivered solid returns for the six-month period. The S&P 500 Index returned 14.08%. The MSCI EAFE Index, a broad measure of performance in the major developed markets outside the United States, returned 22.16%. Japan's Nikkei 225 Index gained 14.64%. In the United States and Europe, cyclical stocks led the markets during the first half of the period. During the second half of the period, defensive stocks were rewarded as investors looked beyond economically-sensitive sectors as the recovery matured. In Japan, export and manufacturing companies were solid performers. The outlook for the global markets is clearly dependent on a sustainable economic revival. Estimates for 2004 range from low single-digit growth in Europe to higher levels in other regions. EUROPE'S ECONOMIES ARE LACKLUSTER European economies generally trailed most of the developed world, although growth in the UK was somewhat stronger than in continental Europe. The euro zone--the 12 countries that share the euro as a common currency--is still struggling with relatively high unemployment, lackluster consumer spending and a euro whose strength has generally made European goods less competitive around the world. JAPAN ON THE MEND After more than a decade of stagnation, the fundamentals underlying the Japanese economy are strong. Corporate profits are increasing and the banking system is on the mend. Japan's recovery also depends, in part, on exports to other regional economies. But a combination of export growth and higher consumer spending is expected to support the current recovery. [SIDENOTE] SUMMARY FOR THE SIX-MONTH PERIOD ENDED MARCH 31, 2004 - - ECONOMIC DEMAND STRENGTHENED AROUND THE WORLD, WHICH TRANSLATED INTO GAINS FOR STOCK MARKETS IN DEVELOPED ECONOMIES. BOTH THE MSCI WORLD INDEX AND THE RUSSELL 3000 INDEX DELIVERED DOUBLE-DIGIT RETURNS. [CHART] MSCI INDEX 17.26% RUSSELL INDEX 14.94%
- - STOCK MARKETS IN EUROPE AND JAPAN BENEFITED FROM IMPROVED ECONOMIC ACTIVITY. BOTH THE MSCI EUROPE INDEX AND THE NIKKEI 225 INDEX ROSE DURING THE PERIOD. [CHART] MSCI INDEX 21.43% NIKKEI INDEX 14.64%
The Morgan Stanley Capital International (MSCI) World Index is an unmanaged index that tracks the performance of global stocks. The Russell 3000 Index is an unmanaged index that tracks the performance of the 3,000 largest US companies based on total market capitalizations. The MSCI Europe Index is a broad-based, unmanaged index that tracks the performance of common stocks in the developed markets of Europe. The Nikkei 225 Index is a price-weighted average of 225 top-rated Japanese companies listed in the First Section of the Tokyo Stock Exchange. 1 FUND PROFILE COLUMBIA GLOBAL THEMATIC EQUITY FUND The information below gives you a snapshot of your fund at the end of the reporting period. Your fund is actively managed and the composition of its portfolio will change over time. TOP 5 COUNTRIES AS OF 03/31/04 (%) United States 52.2 Japan 9.0 Switzerland 7.4 United Kingdom 7.1 South Korea 4.2
TOP 5 SECTORS AS OF 03/31/04 (%) Financials 22.4 Information technology 16.6 Consumer discretionary 15.8 Health care 12.4 Industrials 9.5
TOP 10 HOLDINGS AS OF 03/31/04 (%) Citigroup 5.7 Pfizer 4.2 General Electric 3.9 UBS AG 3.1 Nomura Holdings 3.1 Microsoft 2.7 PepsiCo 2.6 Samsung Electronics 2.5 British Sky Broadcasting Group PLC 2.4 Alltel 2.3
Sector breakdown and portfolio holdings are calculated as a percentage of net assets. Countries are calculated as a percentage of total investments. (C) 2004 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. The Morningstar Style Box(TM) reveals a fund's investment strategy. For equity funds the vertical axis shows the market capitalization of the stocks owned and the horizontal axis shows investment style (value, blend or growth). For fixed-income funds the vertical axis shows the average credit quality of the bonds owned, and the horizontal axis shows interest rate sensitivity as measured by a bond's duration (short, intermediate or long). All of these numbers are drawn from the data most recently provided by the fund and entered into Morningstar's database as of month-end. Although the data are gathered from reliable sources, Morningstar cannot guarantee completeness and accuracy. As of 03/31/2004. [SIDENOTE] SUMMARY - - FOR THE SIX-MONTH PERIOD ENDED MARCH 31, 2004, THE FUND'S CLASS Z SHARES RETURNED 16.52%. - - THE FUND'S RETURN FELL SHORT OF ITS BENCHMARK, THE MSCI WORLD INDEX. - - THE FUND BENEFITED FROM RISING STOCK MARKETS AROUND THE WORLD. HOWEVER, IT TRAILED ITS BENCHMARK BECAUSE IT HAD LITTLE EXPOSURE TO UTILITIES AND MATERIALS AND MISSED OUT ON STRONG GAINS IN THOSE SECTORS. [CHART] CLASS Z SHARES 16.52% MSCI WORLD INDEX 17.26%
OBJECTIVE Seeks long-term growth of capital TOTAL NET ASSETS $0.6 million MORNINGSTAR STYLE BOX [GRAPHIC] 2 PERFORMANCE INFORMATION COLUMBIA GLOBAL THEMATIC EQUITY FUND [CHART] VALUE OF A $10,000 INVESTMENT 01/02/01 - 03/31/04
CLASS Z SHARES MSCI WORLD INDEX 1/2/2001 $ 10,000 $ 10,000 1/31/2001 $ 10,592 $ 10,357 2/28/2001 $ 9,710 $ 9,481 3/31/2001 $ 8,878 $ 8,856 4/30/2001 $ 9,620 $ 9,509 5/31/2001 $ 9,489 $ 9,385 6/30/2001 $ 9,188 $ 9,089 7/31/2001 $ 8,907 $ 8,968 8/31/2001 $ 8,436 $ 8,536 9/30/2001 $ 7,613 $ 7,783 10/31/2001 $ 7,804 $ 7,932 11/30/2001 $ 8,305 $ 8,400 12/31/2001 $ 8,486 $ 8,452 1/31/2002 $ 8,014 $ 8,195 2/28/2002 $ 7,863 $ 8,123 3/31/2002 $ 8,194 $ 8,498 4/30/2002 $ 7,757 $ 8,193 5/31/2002 $ 7,686 $ 8,207 6/30/2002 $ 7,285 $ 7,708 7/31/2002 $ 6,653 $ 7,058 8/31/2002 $ 6,582 $ 7,070 9/30/2002 $ 5,849 $ 6,291 10/31/2002 $ 6,391 $ 6,755 11/30/2002 $ 6,672 $ 7,118 12/31/2002 $ 6,311 $ 6,772 1/31/2003 $ 6,051 $ 6,566 2/28/2003 $ 5,880 $ 6,451 3/31/2003 $ 5,820 $ 6,430 4/30/2003 $ 6,262 $ 6,999 5/31/2003 $ 6,543 $ 7,398 6/30/2003 $ 6,724 $ 7,525 7/31/2003 $ 6,954 $ 7,677 8/31/2003 $ 7,085 $ 7,842 9/30/2003 $ 7,005 $ 7,889 10/31/2003 $ 7,506 $ 8,356 11/30/2003 $ 7,516 $ 8,482 12/31/2003 $ 7,918 $ 9,014 1/31/2004 $ 8,091 $ 9,158 2/29/2004 $ 8,233 $ 9,311 3/31/2004 $ 8,162 $ 9,249
The graph and table do not reflect the deduction of taxes a shareholder would pay on fund distributions or the redemption of fund shares. The Morgan Stanley Capital International (MSCI) World Index is an unmanaged index that tracks the performance of global stocks. Index performance is from January 2, 2001. Unlike the fund, indices are not investments, do not incur fees or expenses and are not professionally managed. It is not possible to directly invest in an index. Securities in the fund may not match those in an index. All results shown assume reinvestment of distributions. Performance results reflect any voluntary waivers or reimbursements of fund expenses by the advisor or its affiliates. Absent these waivers or reimbursement arrangements, performance results would have been lower. Class Z shares may be purchased by, among others: any shareholder (and family members) of a fund distributed by Columbia Funds Distributor, Inc. (CFDI) who (i) hold class Z shares, (ii) who holds class A shares that were obtained by exchanging with class Z shares, or (iii) who purchased no-load shares of funds merged with funds distributed by CFDI; clients of fee-based broker-dealers or registered investment advisors that recommend the purchase of fund shares; any trustee or director (and family members of a shareholder or any person listed on an account registration for the account of any shareholder) of any fund distributed by CFDI; insurance companies, trust companies, banks, endowments, investment companies, and foundations; and retirement plans with assets of at least $5 million. Investment minimums vary. For further information, please consult the fund prospectus. [SIDENOTE] PERFORMANCE OF A $10,000 INVESTMENT 01/02/01 - 03/31/04 ($)
SALES CHARGE: WITHOUT WITH - ---------------------------------------- Class Z 8,162 n/a
Performance data quoted represents past performance and current performance may be lower or higher. Past performance is no guarantee of future results. The investment return and principal value will fluctuate so that shares may be worth more or less than the original cost. Please visit www.columbiafunds.com for daily and most recent month-end performance updates. AVERAGE ANNUAL TOTAL RETURN AS OF 03/31/04 (%)
SHARE CLASS Z - --------------------------------------------------- INCEPTION 01/02/01 - --------------------------------------------------- SALES CHARGE WITHOUT - --------------------------------------------------- 6-MONTH (CUMULATIVE) 16.52 1-YEAR 40.23 LIFE -6.52
3 PORTFOLIO MANAGERS' REPORT COLUMBIA GLOBAL THEMATIC EQUITY FUND For the six-month period ended March 31, 2004, class Z shares of Columbia Global Thematic Equity Fund returned 16.52%. Fund performance was less than that of its benchmark, the MSCI World Index, which returned 17.26%. The fund's double-digit return reflected strong stock market performance around the world. However, a lower weight in materials stocks, relative to the benchmark, and lack of exposure to utilities restrained performance. ECONOMIC EXPANSION CONTINUED TO FUEL STOCK MARKET RALLY Economic expansion in the United States, recovering markets in Europe and continued demand for raw materials in China helped world equity markets achieve solid gains during the period. Interest rates were volatile but remained low. After nearly five months of generally rising stock prices, the markets corrected in early March after unexpectedly low job creation numbers in the US gave investors a reason to take profits. But stocks rallied again in the final weeks of the period as job growth picked up. MIXED RESULTS FROM RETIREMENT AND FULFILL YOUR DREAMS The SAVING FOR RETIREMENT theme generally helped performance, as four of the fund's financial stocks gained 20% or more. Swiss bank UBS AG rose 32%, and Japanese bank Nomura Holdings gained 13% during the period. We continue to expect strong performance from Nomura, which is uniquely positioned to benefit from an improving economy. As the only major investment bank in Japan not affiliated with an industrial conglomerate, we believe that Nomura's objectivity is a valuable asset that should help it attract more merger and acquisition business. In the FULFILL YOUR DREAMS theme, cruise operator Carnival continued its impressive performance with a gain of 36%. Boats have been full, customers are paying list price and no new competitors are entering the market. Gains from Carnival were partially offset, however, by the fund's position in Ryanair Holdings PLC, which declined 15%. The largest low-cost airline in Europe faced tough competition and difficulty expanding into new markets. During the period, we added to FULFILL YOUR DREAMS holdings with the purchase of Tractor Supply, a do-it-yourself store marketing farming supplies to the growing number of Americans living life in rural areas beyond the suburbs. GLOBAL DATA TRAFFIC PRODUCED MIXED RETURNS Our investments in technology companies benefited from improved corporate spending during the period. ASML Holding NV was a strong contributor to the fund's return. ASML is a manufacturer of the equipment that imprints microscopic circuitry patterns onto silicon chips. Nokia Oyj, the world's top cell phone maker, also benefited fund performance. Cap Gemini SA was one of the fund's few negative [SIDENOTE] NET ASSET VALUE PER SHARE AS OF 03/31/04 ($) Class Z 8.04
DISTRIBUTIONS DECLARED PER SHARE 10/01/03 - 03/31/04 ($) Class Z 0.09
HOLDINGS DISCUSSED IN THIS REPORT AS OF 03/31/04 (%) UBS AG 3.1 Nomura Holdings 3.1 Carnival 2.2 Ryanair Holdings PLC 0.6 Tractor Supply 0.5 ASML Holding NV 0.5 Nokia Oyj 1.0 Signet Group PLC 0.7 Suncor Energy 1.4 Nabors Industries 1.2
Your fund is actively managed and the composition of its portfolio will change over time. Information provided is calculated as a percentage of net assets. 4 performers. Cap Gemini changed its emphasis from consultancy to outsourcing and systems installation, a strategy we questioned because of generally lower margins and higher capital commitments. As a result, we sold the position. NEW THEME AND INCREASED ENERGY EXPOSURE Our new theme, MORE FOR LESS, focuses on companies with strong consumer awareness and the ability to market products at the right price, such as Signet Group PLC. UK-based Signet is the world's largest jewelry retailer. It has gained customers' trust with education and improved retail displays. We also made a strategic decision to increase our energy exposure. We bought shares of Suncor Energy, a Canadian oil company, and Nabors Industries, one of the world's largest drilling contractors. Those stocks gained 48% and 22%, respectively, during the period. LOOKING AHEAD Economic gains in Japan and China have added much-needed support to the US-led global economic recovery. But Europe's economies are recovering more slowly because their prosperity is closely tied to the strength of the economy in the United States, particularly as it relates to the job market. To the extent the US economy stalls, we would expect additional pressure on Europe's economies and its stock markets. However, if the US recovery continues and interest rates remain low, we believe that Europe's economies will continue to improve, to the benefit of other global markets. Leon Pedersen is the lead manager of Columbia Global Thematic Equity Fund. The fund is managed by a 24-member portfolio team at Nordea Investment Management North America, Inc. No single individual at Nordea is responsible for making investment decisions for the fund. Nordea is the subadvisor to the fund. The fund's advisor is Columbia Management Advisors, Inc. /s/ LEON PEDERSON There are specific risks involved when investing in foreign stocks, such as currency exchange rate fluctuations, economic change, instability of emerging countries and political developments. [SIDENOTE] IF THE US RECOVERY CONTINUES AND INTEREST RATES REMAIN LOW, WE BELIEVE THE EUROPEAN ECONOMY WILL CONTINUE TO IMPROVE, WHICH IN TURN WILL BENEFIT OTHER GLOBAL MARKETS. 5 FUND PROFILE COLUMBIA EUROPEAN THEMATIC EQUITY FUND The information below gives you a snapshot of your fund at the end of the reporting period. Your fund is actively managed and the composition of its portfolio will change over time. TOP 5 SECTORS AS OF 03/31/04 (%) Financials 26.2 Consumer discretionary 20.0 Health care 10.4 Energy 9.9 Consumer staples 9.4
TOP 5 COUNTRIES AS OF 03/31/04 (%) United Kingdom 30.6 Switzerland 18.2 France 12.4 Italy 9.2 Sweden 5.5
TOP 10 HOLDINGS AS OF 03/31/04 (%) UBS AG 5.3 Nestle SA 4.9 Vodafone Group PLC 4.1 Total SA 4.1 Novartis AG 3.7 Aventis SA 3.5 British Sky Broadcasting Group PLC 3.4 Nokia Oyj 3.3 Diageo PLC 3.3 Telecom Italio S.p.A. 2.9
Sector breakdown and portfolio holdings are calculated as a percentage of net assets. Countries are calculated as a percentage of total investments. (C) 2004 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. The Morningstar Style Box(TM) reveals a fund's investment strategy. For equity funds the vertical axis shows the market capitalization of the stocks owned and the horizontal axis shows investment style (value, blend or growth). For fixed-income funds the vertical axis shows the average credit quality of the bonds owned, and the horizontal axis shows interest rate sensitivity as measured by a bond's duration (short, intermediate or long). All of these numbers are drawn from the data most recently provided by the fund and entered into Morningstar's database as of month-end. Although the data are gathered from reliable sources, Morningstar cannot guarantee completeness and accuracy. As of 03/31/2004. [SIDENOTE] SUMMARY - - FOR THE SIX-MONTH PERIOD ENDED MARCH 31, 2004, THE FUND'S CLASS Z SHARES RETURNED 17.67%. - - THE FUND TRAILED ITS BENCHMARK, THE MSCI EUROPE INDEX. - - THE FUND BENEFITED FROM RISING STOCK PRICES THROUGHOUT EUROPE. HOWEVER, IT TRAILED ITS BENCHMARK BECAUSE IT HAD MINIMAL EXPOSURE TO MATERIALS AND UTILITIES STOCKS AND MISSED OUT ON STRONG GAINS IN THOSE SECTORS. [CHART] CLASS Z SHARES 17.67% MSCI EUROPE INDEX 21.43%
OBJECTIVE Seeks long-term growth of capital TOTAL NET ASSETS $0.3 million MORNINGSTAR STYLE BOX [GRAPHIC] 6 PERFORMANCE INFORMATION COLUMBIA EUROPEAN THEMATIC EQUITY FUND [CHART] VALUE OF A $10,000 INVESTMENT 01/02/01 - 03/31/04
CLASS Z SHARES MSCI EUROPE INDEX 1/2/2001 $ 10,000 $ 10,000 1/31/2001 $ 10,137 $ 10,049 2/28/2001 $ 9,216 $ 9,167 3/31/2001 $ 8,412 $ 8,483 4/30/2001 $ 8,951 $ 9,086 5/31/2001 $ 8,461 $ 8,643 6/30/2001 $ 8,117 $ 8,316 7/31/2001 $ 8,038 $ 8,337 8/31/2001 $ 7,891 $ 8,120 9/30/2001 $ 7,136 $ 7,310 10/31/2001 $ 7,312 $ 7,542 11/30/2001 $ 7,548 $ 7,844 12/31/2001 $ 7,823 $ 8,045 1/31/2002 $ 7,332 $ 8,257 2/28/2002 $ 7,332 $ 7,624 3/31/2002 $ 7,636 $ 8,037 4/30/2002 $ 7,546 $ 7,976 5/31/2002 $ 7,456 $ 7,951 6/30/2002 $ 7,267 $ 7,675 7/31/2002 $ 6,360 $ 6,821 8/31/2002 $ 6,330 $ 6,819 9/30/2002 $ 5,353 $ 5,922 10/31/2002 $ 5,882 $ 6,495 11/30/2002 $ 6,161 $ 6,814 12/31/2002 $ 5,922 $ 6,566 1/31/2003 $ 5,553 $ 6,256 2/28/2003 $ 5,324 $ 6,052 3/31/2003 $ 5,533 $ 5,962 4/30/2003 $ 6,251 $ 6,766 5/31/2003 $ 6,720 $ 7,205 6/30/2003 $ 6,769 $ 7,274 7/31/2003 $ 6,849 $ 7,422 8/31/2003 $ 6,809 $ 7,408 9/30/2003 $ 6,909 $ 7,558 10/31/2003 $ 7,348 $ 8,064 11/30/2003 $ 7,697 $ 8,407 12/31/2003 $ 8,222 $ 9,097 1/31/2004 $ 8,313 $ 9,204 2/29/2004 $ 8,455 $ 9,473 3/31/2004 $ 8,129 $ 9,179
The graph and table do not reflect the deduction of taxes a shareholder would pay on fund distributions or the redemption of fund shares. The Morgan Stanley Capital International (MSCI) Europe Index is an unmanaged index that tracks the performance of global stocks. Index performance is from January 2, 2001. Unlike the fund, indices are not investments, do not incur fees or expenses and are not professionally managed. Securities in the fund may not match those in an index. All results shown assume reinvestment of distributions. Performance results reflect any voluntary waivers or reimbursements of fund expenses by the advisor or its affiliates. Absent these waivers or reimbursement arrangements, performance results would have been lower. Class Z shares may be purchased by, among others: any shareholder (and family members) of a fund distributed by Columbia Funds Distributor, Inc. (CFDI) who (i) hold class Z shares, (ii) who holds class A shares that were obtained by exchanging with class Z shares, or (iii) who purchased no-load shares of funds merged with funds distributed by CFDI; clients of fee-based broker-dealers or registered investment advisors that recommend the purchase of fund shares; any trustee or director (and family members of a shareholder or any person listed on an account registration for the account of any shareholder) of any fund distributed by CFDI; insurance companies, trust companies, banks, endowments, investment companies, and foundations; and retirement plans with assets of at least $5 million. Investment minimums vary. For further information, please consult the fund prospectus [SIDENOTE] PERFORMANCE OF A $10,000 INVESTMENT 01/02/01 - 03/31/04 ($)
SALES CHARGE: WITHOUT WITH - ---------------------------------------- Class Z 8,129 n/a
Performance data quoted represents past performance and current performance may be lower or higher. Past performance is no guarantee of future results. The investment return and principal value will fluctuate so that shares may be worth more or less than the original cost. Please visit www.columbiafunds.com for daily and most recent month-end performance updates. AVERAGE ANNUAL TOTAL RETURN AS OF 03/31/04 (%)
SHARE CLASS Z - --------------------------------------------------- INCEPTION 01/02/01 - --------------------------------------------------- SALES CHARGE WITHOUT - --------------------------------------------------- 6-MONTH (CUMULATIVE) 17.67 1-YEAR 46.93 LIFE -6.12
7 PORTFOLIO MANAGERS' REPORT COLUMBIA EUROPEAN THEMATIC EQUITY FUND For the six-month period ended March 31, 2004, class Z shares of Columbia European Thematic Equity Fund returned 17.67%. The fund fell short of its benchmark, the MSCI Europe Index, which returned 21.43%. Market conditions were strong across most sectors, but the fund's low weights in materials and utilities stocks hampered performance relative to the index. STOCKS CONTINUED TO RISE Sparked by economic expansion in the United States, European stocks performed well during the period. Interest rates were volatile but remained low. The dollar weakened between November and February, then recovered modestly in March. After nearly five months of generally rising stock prices, the markets corrected in early March after the release of unexpectedly low job creation numbers in the US gave investors a reason to take profits. But stocks rallied again in the final weeks of the period as job growth picked up. RETIREMENT AND BETTER LIFE THEMES DID WELL The SAVING FOR RETIREMENT theme helped performance as six of the fund's financial stocks gained 20% or more. Swiss bank UBS AG, our largest holding, rose 32%. The company benefited from its mix of private banking, corporate finance and exposure to the rising stock market. The fund did not own shares of Parmalat, yet the scandal at the Italian dairy products company had a negative effect on most of the country's banks, including our shares of UniCredito Italiano S.p.A. In the LONGER LIFE, BETTER LIFE theme, pharmaceutical company Aventis SA gained 48% and optical lens manufacturer Essilor International SA was up 40%. OUTSOURCING AND FULFILL YOUR DREAMS WERE DISAPPOINTING Our OUTSOURCING theme generated limited returns. Although security company Securitas AB gained 18%, it underperformed the MSCI Europe benchmark. The company recovered after facing tough competition and staffing problems. The leading Swiss temporary employment company Adecco SA disappointed with a below-benchmark gain of 11%. The company was troubled by accounting issues at its US operation. In FULFILL YOUR DREAMS, Ryanair Holdings PLC was the worst-performing stock in the fund, losing 15%. Europe's largest low-cost airline faced tough competition from competitors and difficulty expanding into new markets. GLOBAL DATA TRAFFIC PRODUCED MIXED RETURNS THE GLOBAL DATA TRAFFIC theme, which includes telecommunications and information technology, did well during the period as corporate spending rose. ASML Holding NV was a strong contributor to the fund's [SIDENOTE] NET ASSET VALUE PER SHARE AS OF 03/31/04 ($) Class Z 7.99
DISTRIBUTIONS DECLARED PER SHARE 10/01/03 - 03/31/04 ($) Class Z 0.16
HOLDINGS DISCUSSED IN THIS REPORT AS OF 03/31/04 (%) UBS AG 5.3 UniCredito Italiano S.p.A. 1.8 Aventis SA 3.5 Essilor International SA 2.0 Securitas AB 1.1 Adecco SA 2.0 Ryanair Holdings PLC 1.2 ASML Holding NV 1.2 Nokia Oyj 3.3 Hennes & Mauritz AB 1.6 Signet Group PLC 1.3
Your fund is actively managed and the composition of its portfolio will change over time. Information provided is calculated as a percentage of net assets. 8 returns. ASML is a manufacturer of the equipment that imprints microscopic circuitry patterns onto silicon chips. Nokia Oyj, the world's top cell phone maker, also benefited fund performance. Cap Gemini SA was one of the few negative performers. Cap Gemini changed its emphasis from consultancy to outsourcing and systems installation, a strategy we questioned because of generally lower margins and higher capital commitment. We sold the position. GOOD RESULTS FROM NEW THEME We established a new theme, MORE FOR LESS, which focuses on companies with strong consumer awareness and the ability to position products at the right price. Within the new theme, we acquired Swedish apparel designer Hennes & Mauritz AB. The company sells stylish but inexpensive clothing for children and adults and has more than 800 stores in 14 countries. We also invested in UK-based Signet Group PLC, the world's leading diamond retailer. By combining competitive pricing with marketing and gem-stone education, it has gained the trust of customers. Both holdings did well. LOOKING AHEAD In Europe, economic recovery is proceeding slowly. Exports are growing, but consumer spending is low by US standards. The strength of the European economy is closely tied to the strength of the economy in the United States, particularly as it relates to the job market. A stall in the US economy would put additional pressure on Europe's economies and stock markets. However, if the US recovery continues and interest rates remain low, we believe that European markets have the potential to improve as well. Leon Pedersen is the lead manager of Columbia European Thematic Equity Fund. The fund is managed by a 24-member portfolio team at Nordea Investment Management North America, Inc. No single individual at Nordea is responsible for making investment decisions for the fund. Nordea is the subadvisor to the fund. The fund's advisor is Columbia Management Advisors, Inc. /s/ LEON PEDERSON There are specific risks involved when investing in foreign stocks, such as currency exchange rate fluctuations, economic change, instability of emerging countries and political developments. A portfolio of stocks from a limited geographic region, such as Europe, may be subject to additional risks and volatility. [SIDENOTE] IF THE US RECOVERY CONTINUES AND INTEREST RATES REMAIN LOW, WE BELIEVE EUROPEAN MARKETS HAVE THE POTENTIAL TO IMPROVE. IF THE US ECONOMY STALLS, IT WILL PUT ADDITIONAL PRESSURE ON EUROPE'S ECONOMIES AND THEIR STOCK MARKETS. 9 INVESTMENT PORTFOLIO MARCH 31, 2004 (UNAUDITED) COLUMBIA GLOBAL THEMATIC EQUITY FUND
SHARES VALUE ($) - ---------------------------------------------------------------------------------------------------------------------------------- COMMON STOCKS - 95.4% CONSUMER DISCRETIONARY - 15.8% AUTOMOBILES - 1.8% Harley-Davidson, Inc. 110 5,867 Honda Motor Co., Ltd. 100 4,603 Automobiles Total 10,470 HOTELS, RESTAURANTS & LEISURE - 2.8% Accor SA 80 3,246 Carnival Corp. 295 13,248 Hotels, Restaurants & Leisure Total 16,494 HOUSEHOLD DURABLES - 1.8% Furniture Brands International, Inc. 150 4,830 Koninklijke (Royal) Philips Electronics NV 200 5,791 Household Durables Total 10,621 MEDIA - 5.3% British Sky Broadcasting Group PLC 1,130 14,136 Lamar Advertising Co. (a) 100 4,022 Omnicom Group, Inc. 100 8,025 WPP Group PLC 500 5,075 Media Total 31,258 SPECIALTY RETAIL - 4.1% Home Depot, Inc. 330 12,329 Kingfisher PLC 937 4,984 Signet Group PLC 2,000 4,056 Tractor Supply Co. (a) 75 2,904 Specialty Retail Total 24,273 -------------- CONSUMER DISCRETIONARY TOTAL 93,116 CONSUMER STAPLES - 6.0% BEVERAGES - 3.2% Diageo PLC 300 3,922 PepsiCo, Inc. 280 15,078 Beverages Total 19,000 FOOD & STAPLES RETAILING - 1.3% Wal-Mart Stores, Inc. 130 7,760 Food & Staples Retailing Total 7,760 FOOD PRODUCTS - 1.5% Nestle SA, Registered Shares 35 8,929 Food Products Total 8,929 -------------- CONSUMER STAPLES TOTAL 35,689 ENERGY - 5.7% ENERGY EQUIPMENT & SERVICES - 2.8% Nabors Industries Ltd. (a) 150 6,863 Schlumberger Ltd. 150 9,578 Energy Equipment & Services Total 16,441 OIL & GAS - 2.9% Suncor Energy, Inc. 300 8,223 Total SA 50 9,193 Oil & Gas Total 17,416 -------------- ENERGY TOTAL 33,857 FINANCIALS - 22.4% CAPITAL MARKETS - 4.9% Merrill Lynch & Co., Inc. 170 10,125 UBS AG, Registered Shares 250 18,581 Capital Markets Total 28,706
See notes to investment portfolio. 10
SHARES VALUE ($) - ---------------------------------------------------------------------------------------------------------------------------------- COMMON STOCKS - (CONTINUED) FINANCIALS - (CONTINUED) COMMERCIAL BANKS - 5.3% Allied Irish Banks PLC 440 6,568 Banco Santander Central Hispano SA 550 5,990 Charter One Financial, Inc. 150 5,304 Kookmin Bank, ADR (a) 100 4,046 Wells Fargo & Co. 170 9,634 Commercial Banks Total 31,542 DIVERSIFIED FINANCIAL SERVICES - 8.8% Citigroup, Inc. 650 33,605 Nomura Holdings, Inc. 1,000 18,171 Diversified Financial Services Total 51,776 INSURANCE - 3.4% Alleanza Assicurazioni S.p.A. 600 6,800 Swiss Re, Registered Shares 50 3,448 Torchmark Corp. 180 9,682 Insurance Total 19,930 -------------- FINANCIALS TOTAL 131,954 HEALTH CARE - 12.4% HEALTH CARE EQUIPMENT & SUPPLIES - 1.2% Medtronic, Inc. 150 7,162 Health Care Equipment & Supplies Total 7,162 PHARMACEUTICALS - 11.2% Abbott Laboratories 300 12,330 Johnson & Johnson 235 11,919 Novartis AG, Registered Shares 250 10,624 Novo-Nordisk A/S, Class B 150 6,967 Pfizer, Inc. 700 24,535 Pharmaceuticals Total 66,375 -------------- HEALTH CARE TOTAL 73,537 INDUSTRIALS - 9.5% AEROSPACE & DEFENSE - 1.1% Honeywell International, Inc. 200 6,770 Aerospace & Defense Total 6,770 AIRLINES - 0.6% Ryanair Holdings PLC, ADR (a) 100 3,419 Airlines Total 3,419 COMMERCIAL SERVICES & SUPPLIES - 1.5% Allied Waste Industries, Inc. (a) 157 2,090 Securitas AB, B Shares 440 6,360 Commercial Services & Supplies Total 8,450 INDUSTRIAL CONGLOMERATES - 3.9% General Electric Co. 750 22,890 Industrial Conglomerates Total 22,890 MACHINERY - 0.4% Tomra Systems ASA 500 2,537 Machinery Total 2,537 TRADING COMPANIES & DISTRIBUTORS - 2.0% Mitsubishi Corp. 1,000 11,795 Trading Companies & Distributors Total 11,795 -------------- INDUSTRIALS TOTAL 55,861 INFORMATION TECHNOLOGY - 16.6% COMMUNICATIONS EQUIPMENT - 2.2% Nokia Oyj 300 6,158 QUALCOMM, Inc. 100 6,642 Communications Equipment Total 12,800
See notes to investment portfolio. 11
SHARES VALUE ($) - ---------------------------------------------------------------------------------------------------------------------------------- COMMON STOCKS - (CONTINUED) INFORMATION TECHNOLOGY - (CONTINUED) COMPUTERS & PERIPHERALS - 1.2% International Business Machines Corp. 75 6,888 Computers & Peripherals Total 6,888 ELECTRONIC EQUIPMENT & INSTRUMENTS - 1.6% Hoya Corp. 100 9,733 Electronic Equipment & Instruments Total 9,733 INTERNET SOFTWARE & SERVICES - 1.2% T-Online International AG (a) 200 2,387 Yahoo!, Inc. (a) 100 4,859 Internet Software & Services Total 7,246 SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 5.6% Applied Materials, Inc. (a) 500 10,690 ASML Holding NV (a) 156 2,862 Samsung Electronics Co., Ltd., GDR (b) 20 4,950 Samsung Electronics Co., Ltd., GDR, Registered Shares 60 14,850 Semiconductors & Semiconductor Equipment Total 33,352 SOFTWARE - 4.8% BEA Systems, Inc. (a) 600 7,656 Dassault Systemes SA 100 4,159 Microsoft Corp. 650 16,231 Software Total 28,046 -------------- INFORMATION TECHNOLOGY TOTAL 98,065 MATERIALS - 2.5% CHEMICALS - 2.2% Potash Corp. of Saskatchewan, Inc. 110 9,141 Praxair, Inc. 100 3,712 Chemicals Total 12,853 METALS & MINING - 0.3% Johnson Matthey PLC 100 1,622 Metals & Mining Total 1,622 -------------- MATERIALS TOTAL 14,475 TELECOMMUNICATION SERVICES - 4.5% DIVERSIFIED TELECOMMUNICATION SERVICES - 2.4% Alltel Corp. 275 13,720 Telefonica SA 21 318 Diversified Telecommunication Services Total 14,038 WIRELESS TELECOMMUNICATION SERVICES - 2.1% NTT DoCoMo, Inc. 3 6,616 Vodafone Group PLC 2,500 5,935 Wireless Telecommunication Services Total 12,551 -------------- TELECOMMUNICATION SERVICES TOTAL 26,589 TOTAL COMMON STOCKS - 95.4% (COST OF $498,054) (c) 563,143 OTHER ASSETS & LIABILITIES, NET - 4.6% 27,145 NET ASSETS - 100.0% 590,288
See notes to investment portfolio. 12 NOTES TO INVESTMENT PORTFOLIO: (a) Non-income producing. (b) This security is exempt from registration under Rule 144A of the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. At March 31, 2004, the value of this security amounted to $4,950, which represents 0.8% of net assets. (c) Cost for both financial statement and federal income tax purposes is the same.
SUMMARY OF SECURITIES % OF TOTAL BY COUNTRY VALUE ($) INVESTMENTS --------------------------------------------------------------------------- United States 294,123 52.2% Japan 50,918 9.0 Switzerland 41,582 7.4 United Kingdom 39,729 7.1 South Korea 23,846 4.2 Netherlands 18,231 3.2 Canada 17,364 3.1 France 16,598 3.0 Panama 13,248 2.4 Ireland 9,987 1.8 Denmark 6,967 1.2 Italy 6,800 1.2 Sweden 6,360 1.1 Spain 6,308 1.1 Finland 6,158 1.1 Norway 2,537 0.5 Germany 2,387 0.4 -------- ----- 563,143 100.0% ======== =====
ACRONYM NAME --------------------------------------------------------------------------- ADR American Depositary Receipt GDR Global Depositary Receipt
See notes to financial statements. 13 INVESTMENT PORTFOLIO MARCH 31, 2004 (UNAUDITED) COLUMBIA EUROPEAN THEMATIC EQUITY FUND
SHARES VALUE ($) - ---------------------------------------------------------------------------------------------------------------------------------- COMMON STOCKS - 102.1% CONSUMER DISCRETIONARY - 20.0% AUTOMOBILES - 2.0% Bayerische Motoren Werke (BMW) AG 150 6,108 Automobiles Total 6,108 HOTELS, RESTAURANTS & LEISURE - 6.2% Accor SA 130 5,274 Carnival PLC 141 6,627 Compass Group PLC 1,090 7,205 Hotels, Restaurants & Leisure Total 19,106 HOUSEHOLD DURABLES - 2.0% Koninklijke (Royal) Philips Electronics NV 215 6,226 Household Durables Total 6,226 MEDIA - 5.3% British Sky Broadcasting Group PLC 850 10,633 WPP Group PLC 590 5,988 Media Total 16,621 SPECIALTY RETAIL - 4.5% Hennes & Mauritz AB, B Shares 180 4,846 Kingfisher PLC 940 5,000 Signet Group PLC 2,019 4,095 Specialty Retail Total 13,941 -------------- CONSUMER DISCRETIONARY TOTAL 62,002 CONSUMER STAPLES - 9.4% BEVERAGES - 3.3% Diageo PLC 770 10,066 Beverages Total 10,066 FOOD PRODUCTS - 6.1% Nestle SA, Registered Shares 59 15,052 Royal Numico NV (a) 134 3,958 Food Products Total 19,010 -------------- CONSUMER STAPLES TOTAL 29,076 ENERGY - 9.9% ENERGY EQUIPMENT & SERVICES - 1.4% Saipem S.p.A. 450 4,485 Energy Equipment & Services Total 4,485 OIL & GAS - 8.5% BP PLC 700 5,885 Shell Transport & Trading Co. PLC 1,180 7,734 Total SA 69 12,686 Oil & Gas Total 26,305 -------------- ENERGY TOTAL 30,790 FINANCIALS - 26.2% CAPITAL MARKETS - 5.3% UBS AG, Registered Shares 220 16,352 Capital Markets Total 16,352 COMMERCIAL BANKS - 13.6% Allied Irish Banks PLC 240 3,583 Banco Santander Central Hispano SA 745 8,114 Bankinter SA 35 1,381 Dexia 290 5,025 ForeningsSparbanken AB 250 4,641 Lloyds TSB Group PLC 1,120 8,539 SanPaolo IMA S.p.A. 485 5,533 UniCredito Italiano S.p.A. 1,140 5,443 Commercial Banks Total 42,259
See notes to investment portfolio. 14
SHARES VALUE ($) - ---------------------------------------------------------------------------------------------------------------------------------- COMMON STOCKS - (CONTINUED) FINANCIALS - (CONTINUED) INSURANCE - 7.3% Alleanza Assicurazioni S.p.A. 460 5,214 AMB Generali Holding AG 30 2,281 Prudential PLC 950 7,838 Swiss Re, Registered Shares 107 7,378 Insurance Total 22,711 -------------- FINANCIALS TOTAL 81,322 HEALTH CARE - 10.4% HEALTH CARE EQUIPMENT & SUPPLIES - 2.0% Essilor International SA 101 6,151 Health Care Equipment & Supplies Total 6,151 PHARMACEUTICALS - 8.4% Aventis SA 140 10,776 Novartis AG, Registered Shares 271 11,516 Novo Nordisk A/S, Class B 80 3,716 Pharmaceuticals Total 26,008 -------------- HEALTH CARE TOTAL 32,159 INDUSTRIALS - 6.1% AIR FREIGHT & LOGISTICS - 1.0% Exel PLC 250 3,245 Air Freight & Logistics Total 3,245 AIRLINES - 1.2% Ryanair Holdings PLC, ADR (a) 110 3,761 Airlines Total 3,761 COMMERCIAL SERVICES & SUPPLIES - 3.2% Adecco SA, Registered Shares 114 6,303 Securitas AB, B Shares 240 3,469 Commercial Services & Supplies Total 9,772 MACHINERY - 0.7% Tomra Systems ASA 400 2,030 Machinery Total 2,030 -------------- INDUSTRIALS TOTAL 18,808 INFORMATION TECHNOLOGY - 9.2% COMMUNICATIONS EQUIPMENT - 4.9% Nokia Oyj 500 10,263 Telefonaktiebolaget LM Ericsson (a) 1,700 4,712 Communications Equipment Total 14,975 INTERNET SOFTWARE & SERVICES - 1.5% T-Online International AG (a) 386 4,608 Internet Software & Services Total 4,608 SEMICONDUCTORS & SEMICONDUCTOR ASML Holding NV (a) 209 3,835 EQUIPMENT - 1.2% Semiconductors & Semiconductor Equipment Total 3,835 SOFTWARE - 1.6% Dassault Systemes SA 120 4,991 Software Total 4,991 -------------- INFORMATION TECHNOLOGY TOTAL 28,409 MATERIALS - 1.4% CONSTRUCTION MATERIALS - 0.6% Holcim Ltd., Registered Shares 37 1,980 Construction Materials Total 1,980
See notes to investment portfolio. 15
SHARES VALUE ($) - ---------------------------------------------------------------------------------------------------------------------------------- COMMON STOCKS - (CONTINUED) MATERIALS - (CONTINUED) METALS & MINING - 0.8% Johnson Matthey PLC 150 2,432 Metals & Mining Total 2,432 -------------- MATERIALS TOTAL 4,412 TELECOMMUNICATION SERVICES - 9.5% DIVERSIFIED TELECOMMUNICATION SERVICES - 5.4% Telecom Italia S.p.A. (a) 2,865 8,990 Telefonica SA 505 7,650 Diversified Telecommunication Services Total 16,640 WIRELESS TELECOMMUNICATION SERVICES - 4.1% Vodafone Group PLC 5,390 12,795 Wireless Telecommunication Services Total 12,795 -------------- TELECOMMUNICATION SERVICES TOTAL 29,435 -------------- TOTAL COMMON STOCKS (COST OF $262,693) 316,413 PREFERRED STOCK - 1.5% HEALTH CARE - 1.5% HEALTH CARE PROVIDERS & SERVICES - 1.5% Fresenius AG (Cost of $1,546) 65 4,558 TOTAL INVESTMENTS - 103.6% (COST OF $264,239) (b) 320,971 OTHER ASSETS & LIABILITIES, NET - (3.6)% (11,290) NET ASSETS - 100.0% 309,681
NOTES TO INVESTMENT PORTFOLIO: (a) Non-income producing. (b) Cost for both financial statement and federal income tax purposes is the same.
SUMMARY OF SECURITIES % OF TOTAL BY COUNTRY VALUE ($) INVESTMENTS --------------------------------------------------------------------------- United Kingdom 98,083 30.6% Switzerland 58,581 18.2 France 39,879 12.4 Italy 29,665 9.2 Sweden 17,667 5.5 Germany 17,556 5.5 Spain 17,145 5.3 Netherlands 14,018 4.4 Finland 10,263 3.2 Ireland 7,343 2.3 Belgium 5,025 1.6 Denmark 3,716 1.2 Norway 2,030 0.6 ------- ----- 320,971 100.0% ======= =====
ACRONYM NAME --------------------------------------------------------------------------- ADR American Depositary Receipt
See notes to financial statements. 16 STATEMENTS OF ASSETS AND LIABILITIES MARCH 31, 2004 (UNAUDITED) COLUMBIA THEMATIC EQUITY FUNDS
COLUMBIA COLUMBIA GLOBAL EUROPEAN THEMATIC THEMATIC EQUITY EQUITY FUND ($) FUND ($) - ------------------------------------------------------------------------------------------------------------------------------- ASSETS Investments, at cost 498,054 264,239 --------------------- Investments, at value 563,143 320,971 Cash 14,285 -- Foreign currency (cost of $36,046 and $4,422, respectively) 36,743 4,481 Receivable for: Dividends 1,069 1,571 Foreign tax reclaims 802 952 Expense reimbursement due from Investment Advisor 17,672 18,114 Deferred Trustees' compensation plan 1,370 1,367 Other assets 3,501 1,028 --------------------- Total Assets 638,585 348,484 LIABILITIES Payable to custodian bank -- 9,910 Payable for: Investments purchased 23,028 -- Investment advisory fee 445 1,523 Administration fee 28 243 Transfer agent fee 506 394 Pricing and bookkeeping fees 1,322 1,299 Trustees' fees 34 47 Audit fee 15,396 15,396 Custody fee 3,657 6,050 Legal fee 2,511 2,574 Deferred Trustees' fees 1,370 1,367 --------------------- Total Liabilities 48,297 38,803 NET ASSETS 590,288 309,681 COMPOSITION OF NET ASSETS Paid-in capital 1,184,605 964,613 Accumulated net investment loss (1,764) (959) Accumulated net realized loss (658,439) (710,926) Net unrealized appreciation on: Investments 65,089 56,732 Foreign currency translations 797 221 NET ASSETS 590,288 309,681 CLASS Z Net assets 590,288 309,681 Shares outstanding 73,449 38,757 Net asset value and offering price per share (a) 8.04 7.99
(a) Redemption price per share is equal to net asset value less any applicable redemption fees. See notes to financial statements. 17 STATEMENTS OF OPERATIONS FOR THE SIX MONTHS ENDED MARCH 31, 2004 (UNAUDITED) COLUMBIA THEMATIC EQUITY FUNDS
COLUMBIA COLUMBIA GLOBAL EUROPEAN THEMATIC THEMATIC EQUITY EQUITY FUND ($) FUND ($) - ------------------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME Dividends (net of foreign taxes withheld of $164 and $296, respectively) 3,852 2,357 EXPENSES Investment advisory fee 2,483 1,338 Administration fee 194 102 Pricing and bookkeeping fees 6,220 6,093 Transfer agent fee 512 224 Trustees' fees 3,097 3,108 Custody fee 6,144 10,422 Audit fee 16,056 16,056 Registration fee 19,107 19,145 Other expenses 4,895 3,968 Non-recurring costs (See Note 9) 4 2 Costs assumed by Investment Advisor (See Note 9) (4) (2) --------------------- Total Expenses 58,708 60,456 Fees and expenses waived or reimbursed by Investment Advisor (54,018) (57,920) Custody earnings credit (18) (19) --------------------- Net Expenses 4,672 2,517 --------------------- Net Investment Loss (820) (160) NET REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain on: ON INVESTMENTS AND FOREIGN CURRENCY Investments 29,145 10,525 Foreign currency transactions 340 564 --------------------- Net realized gain 29,485 11,089 Net change in unrealized appreciation/depreciation on: Investments 59,094 36,332 Foreign currency translations 614 (132) --------------------- Net change in unrealized appreciation/depreciation 59,708 36,200 --------------------- Net Gain 89,193 47,289 --------------------- Net Increase in Net Assets from Operations 88,373 47,129
See notes to financial statements. 18 STATEMENTS OF CHANGES IN NET ASSETS COLUMBIA THEMATIC EQUITY FUNDS
COLUMBIA GLOBAL THEMATIC EQUITY FUND -------------------------------------------- (UNAUDITED) SIX MONTHS ENDED PERIOD ENDED YEAR ENDED INCREASE (DECREASE) MARCH 31, SEPTEMBER 30, OCTOBER 31, IN NET ASSETS: 2004 ($) 2003(a)(b) ($) 2002(c) ($) - ----------------------------------------------------------------------------------------------------------------------------- OPERATIONS Net investment income (loss) (820) (41) (3,888) Net realized gain (loss) on investments and foreign currency transactions 29,485 (365,620) (235,843) Net change in unrealized appreciation/depreciation on investments and foreign currency translations 59,708 370,489 (51,477) -------------------------------------------- Net Increase (Decrease) from Operations 88,373 4,828 (291,208) DISTRIBUTIONS DECLARED TO SHAREHOLDERS Class Z: From net investment income (6,651) -- (839) SHARE TRANSACTIONS Class Z: Subscriptions 18,676 12,603 499,082 Distributions reinvested 6,623 -- 839 Redemptions (65,342) (717,389) (553,111) -------------------------------------------- Net Increase (Decrease) from Share Transactions (40,043) (704,786) (53,190) -------------------------------------------- Redemption fees 13 3 -- -------------------------------------------- Total Increase (Decrease) in Net Assets 41,692 (699,955) (345,237) NET ASSETS Beginning of period 548,596 1,248,551 1,593,788 End of period 590,288 548,596 1,248,551 Accumulated net investment income (loss), at end of period (1,764) 5,707 (540) CHANGES IN SHARES Class Z: Subscriptions 2,349 1,965 67,200 Issued for distributions reinvested 879 -- 104 Redemptions (8,351) (119,485) (76,155) -------------------------------------------- Net Increase (Decrease) (5,123) (117,520) (8,851) COLUMBIA EUROPEAN THEMATIC EQUITY FUND -------------------------------------------- (UNAUDITED) SIX MONTHS ENDED PERIOD ENDED YEAR ENDED INCREASE (DECREASE) MARCH 31, SEPTEMBER 30, OCTOBER 31, IN NET ASSETS: 2004 ($) 2003(a)(b) ($) 2002(c) ($) - ----------------------------------------------------------------------------------------------------------------------------- OPERATIONS Net investment income (loss) (160) 2,538 857 Net realized gain (loss) on investments and foreign currency transactions 11,089 (134,814) (451,975) Net change in unrealized appreciation/depreciation on investments and foreign currency translations 36,200 110,855 198,885 --------------------------------------------- Net Increase (Decrease) from Operations 47,129 (21,421) (252,233) DISTRIBUTIONS DECLARED TO SHAREHOLDERS Class Z: From net investment income (6,287) -- (20,508) SHARE TRANSACTIONS Class Z: Subscriptions 25,579 179,094 990,208 Distributions reinvested 6,287 -- 20,508 Redemptions (26,157) (828,486) (979,194) --------------------------------------------- Net Increase (Decrease) from Share Transactions 5,709 (649,392) 31,522 --------------------------------------------- Redemption fees -- 241 -- --------------------------------------------- Total Increase (Decrease) in Net Assets 46,551 (670,572) (241,219) NET ASSETS Beginning of period 263,130 933,702 1,174,921 End of period 309,681 263,130 933,702 Accumulated net investment income (loss), at end of period (959) 5,488 (538) CHANGES IN SHARES Class Z: Subscriptions 3,186 29,213 155,828 Issued for distributions reinvested 807 -- 2,658 Redemptions (3,201) (149,415) (157,802) --------------------------------------------- Net Increase (Decrease) 792 (120,202) 684
(a) The Fund changed its fiscal year end from October 31 to September 30. (b) Approximately $670,000 and $655,000 of redemptions in Columbia Global Thematic Equity Fund and Columbia European Thematic Equity Fund, respectively, were by an affiliate of the Funds' investment advisor and were due to certain regulatory requirements. (c) On July 29, 2002, the Funds' outstanding shares were redesignated as Class Z shares. See notes to financial statements. 19 NOTES TO FINANCIAL STATEMENTS MARCH 31, 2004 (UNAUDITED) COLUMBIA THEMATIC EQUITY FUNDS NOTE 1. ORGANIZATION Columbia Global Thematic Equity Fund and Columbia European Thematic Equity Fund (collectively, the "Funds") are diversified portfolios of Columbia Funds Trust XI (the "Trust"). The Trust is a Massachusetts business trust registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. INVESTMENT GOALS Each Fund seeks long-term growth of capital. FUND SHARES The Funds may issue an unlimited number of shares. On July 29, 2002, the outstanding shares of the Funds were redesignated Class Z shares. Class Z shares are offered continuously at net asset value. There are certain restrictions on the purchase of Class Z shares, as described in each Fund's prospectus. On October 13, 2003, the Liberty Global Thematic Equity Fund and Liberty European Thematic Equity Fund were renamed Columbia Global Thematic Equity Fund and Columbia European Thematic Equity Fund, respectively. Also on this date, the Liberty-Stein Roe Funds Investment Trust was renamed Columbia Funds Trust XI. NOTE 2. SIGNIFICANT ACCOUNTING POLICIES USE OF ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The following is a summary of significant accounting policies consistently followed by the Funds in the preparation of their financial statements. SECURITY VALUATION Equity securities are valued at the last sale price at the close of the principal exchange on which they trade. Unlisted securities or listed securities for which there were no sales during the day are valued at the closing bid price on such exchanges or over-the-counter markets. Short-term debt obligations maturing within 60 days are valued at amortized cost, which approximates market value. Foreign securities are generally valued at the closing price on the foreign exchange or market on which they trade. If any foreign share prices are not readily available as a result of limited share activity, the securities are valued at the last sale price of the local shares in the principal market in which such securities are normally traded. Generally, trading in foreign securities is substantially completed each day at various times prior to the close of the New York Stock Exchange ("NYSE"). The values of such securities used in computing the net asset value of the Funds' shares are determined as of such times. Foreign currency exchange rates are generally determined at 2:00 p.m. Eastern (U.S.) time. Occasionally, events affecting the values of such foreign securities and such exchange rates may occur between the times at which they are determined and the close of the customary trading session of the NYSE, which would not be reflected in the computation of the Funds' net asset value. If events materially affecting the values of such foreign securities occur and it is determined that market quotations are not reliable, then these foreign securities will be valued at their fair value using procedures approved by the Board of Trustees. Investments for which market quotations are not readily available, or quotations which management believes are not appropriate, are valued at fair value under procedures approved by the Board of Trustees. SECURITY TRANSACTIONS Security transactions are accounted for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes. INCOME RECOGNITION Corporate actions and dividend income are recorded on the ex-date, except for certain foreign securities which are recorded as soon after ex-date as the Funds become aware of such, net of non-reclaimable tax withholdings. 20 FOREIGN CURRENCY TRANSACTIONS The values of all assets and liabilities quoted in foreign currencies are translated into U.S. dollars at that day's exchange rates. Net realized and unrealized gains (losses) on foreign currency transactions include gains (losses) arising from the fluctuation in exchange rates between trade and settlement dates on securities transactions, gains (losses) arising from the disposition of foreign currency and currency gains (losses) between the accrual and payment dates on dividends, interest income and foreign withholding taxes. For financial statement purposes, the Funds do not distinguish that portion of gains (losses) on investments which is due to changes in foreign exchange rates from that which is due to changes in market prices of the investments. Such fluctuations are included with the net realized and unrealized gains (losses) on investments. FEDERAL INCOME TAX STATUS Each Fund intends to qualify each year as a "regulated investment company" under Subchapter M of the Internal Revenue Code, as amended, and will distribute substantially all of its taxable income, if any, for its tax year, and as such will not be subject to federal income taxes. In addition, by distributing in each calendar year substantially all of its net investment income, capital gains and certain other amounts, if any, each Fund will not be subject to federal excise tax. Therefore, no federal income or excise tax provision is recorded. DISTRIBUTIONS TO SHAREHOLDERS Distributions to shareholders are recorded on ex-date. Net realized capital gains, if any, are distributed at least annually. NOTE 3. FEDERAL TAX INFORMATION The tax character of distributions paid during the period ended September 30, 2003 and year ended October 31, 2002 was as follows:
ORDINARY INCOME - -------------------------------------------------------------------------------- PERIOD ENDED YEAR ENDED SEPTEMBER 30, 2003 OCTOBER 31, 2002 - -------------------------------------------------------------------------------- Columbia Global Thematic Equity Fund $ -- $ 839 Columbia European Thematic Equity Fund -- 20,508
Unrealized appreciation and depreciation at March 31, 2004, based on cost of investments for federal income tax purposes, excluding any unrealized appreciation and depreciation from changes in the value of assets and liabilities resulting from changes in exchange rates, was:
NET UNREALIZED UNREALIZED UNREALIZED APPRECIATION DEPRECIATION APPRECIATION - -------------------------------------------------------------------------------------- Columbia Global Thematic Equity Fund $ 86,073 $ (20,984) $ 65,089 Columbia European Thematic Equity Fund 60,743 (4,011) 56,732
The following capital loss carryforwards, determined as of September 30, 2003, may be available to reduce taxable income arising from future net realized gains on investments, if any, to the extent permitted by the Internal Revenue Code:
COLUMBIA COLUMBIA GLOBAL EUROPEAN YEAR OF THEMATIC THEMATIC EXPIRATION EQUITY FUND EQUITY FUND - ------------------------------------------- 2009 $ 79,387 $ 92,707 2010 235,325 205,264 2011 342,924 408,046 $ 657,636 $ 706,017
Expired capital loss carryforwards, if any, are recorded as a reduction of paid-in capital. NOTE 4. FEES AND COMPENSATION PAID TO AFFILIATES INVESTMENT ADVISORY FEE Columbia Management Advisors, Inc. ("Columbia") is the investment advisor to the Funds. Prior to April 1, 2004, Columbia was an indirect, wholly owned subsidiary of FleetBoston Financial Corporation ("FleetBoston"). Effective April 1, 2004, FleetBoston was acquired by Bank of America Corporation ("BOA"). Columbia receives a monthly investment advisory fee based on average daily net assets of each Fund as follows:
AVERAGE DAILY NET ASSETS ANNUAL FEE RATE - --------------------------------------------- First $1 billion 0.85% Next $500 million 0.80% Over $1.5 billion 0.75%
21 Prior to November 1, 2003, Columbia was entitled to receive a monthly investment advisory fee at the annual rate of 0.85% of each Fund's average daily net assets. SUB-ADVISORY FEE Nordea Investment Management North America, Inc. ("Nordea") has been retained by Columbia as sub-advisor to manage the day-to-day investment operations of the Funds. Columbia, out of the advisory fee it receives, pays Nordea a monthly sub-advisory fee equal to 0.60% annually of the average daily net assets of each Fund. ADMINISTRATION FEE Columbia provides accounting and other services to the Funds for a monthly administration fee at the annual rate of 0.05% of each Fund's average daily net assets. Prior to November 1, 2003, Columbia was entitled to receive a monthly administration fee at the annual rate of 0.15% of each Fund's average daily net assets. For the six months ended March 31, 2004, the annualized effective administration fee rates for the Columbia Global Thematic Equity Fund and Columbia European Thematic Equity Fund were 0.07% and 0.07%, respectively. PRICING AND BOOKKEEPING FEES Columbia is responsible for providing pricing and bookkeeping services to the Funds under a pricing and bookkeeping agreement. Under a separate agreement (the "Outsourcing Agreement"), Columbia has delegated those functions to State Street Corporation ("State Street"). Columbia pays the total fees collected to State Street under the Outsourcing Agreement. Under its pricing and bookkeeping agreement with the Funds, Columbia receives from each Fund an annual flat fee of $10,000 paid monthly, and in any month that a Fund's average daily net assets exceed $50 million, an additional monthly fee. The additional fee rate is calculated by taking into account the fees payable to State Street under the Outsourcing Agreement. This rate is applied to the average daily net assets of the Fund for that month. Each Fund also pays additional fees for pricing services. For the six months ended March 31, 2004, the annualized effective pricing and bookkeeping fee rates for the Columbia Global Thematic Equity Fund and Columbia European Thematic Equity Fund were 2.128% and 3.867%, respectively. TRANSFER AGENT FEE Columbia Funds Services, Inc. (the "Transfer Agent"), formerly Liberty Funds Services, Inc., an indirect, wholly owned subsidiary of BOA, provides shareholder services to the Funds. For such services, the Transfer Agent receives a fee, paid monthly, at the annual rate of $28.00 per open account. The Transfer Agent also receives reimbursement for certain out-of-pocket expenses. Prior to November 1, 2003, the Transfer Agent was entitled to receive a monthly transfer agent fee at the annual rate of 0.06% of each Fund's average daily net assets plus flat-rate charges based on the number of shareholder accounts and transactions. The Transfer Agent was also entitled to receive reimbursement for certain out-of-pocket expenses. For the six months ended March 31, 2004, the annualized effective transfer agent fee rates, inclusive of out-of-pocket fees, for the Columbia Global Thematic Equity Fund and Columbia European Thematic Equity Fund were 0.18% and 0.14%, respectively. EXPENSE LIMITS AND FEE REIMBURSEMENTS Columbia has voluntarily agreed to waive fees and reimburse certain expenses to the extent that total expenses (exclusive of brokerage commissions, interest, taxes and extraordinary expenses, if any) exceed 1.60% annually of each Fund's average daily net assets. Columbia, at its discretion, may revise or discontinue this arrangement any time. CUSTODY CREDITS Each Fund has an agreement with its custodian bank under which custody fees may be reduced by balance credits. The Funds could have invested a portion of the assets utilized in connection with the expense offset arrangement in an income-producing asset if they had not entered into such an agreement. FEES PAID TO OFFICERS AND TRUSTEES The Funds pay no compensation to their officers, all of whom are employees of Columbia or its affiliates. 22 The Funds' Trustees may participate in a deferred compensation plan which may be terminated at any time. Obligations of the plan will be paid solely out of the Funds' assets. NOTE 5. PORTFOLIO INFORMATION For the six months ended March 31, 2004, the cost of purchases and proceeds from sales of securities, excluding short-term obligations, were as follows:
PURCHASES SALES - ----------------------------------------------------------------------------- Columbia Global Thematic Equity Fund $ 112,460 $ 190,966 Columbia European Thematic Equity Fund 96,763 82,036
NOTE 6. LINE OF CREDIT The Funds and other affiliated funds participate in a $350,000,000 credit facility, which is used for temporary or emergency purposes to facilitate portfolio liquidity. Interest is charged to the Funds based on their borrowings. In addition, the Funds have agreed to pay commitment fees on their pro-rata portions of the unutilized line of credit. The commitment fee is included in "Other expenses" on the Statement of Operations. For the six months ended March 31, 2004, the Funds did not borrow under this arrangement. NOTE 7. REDEMPTION FEES Effective February 10, 2003, the Funds began imposing a 2.00% redemption fee to shareholders of Class Z shares who redeem shares held for 60 days or less. Redemption fees, which are retained by the Funds, are accounted for as an addition to paid-in capital. For the six months ended March 31, 2004, redemption fees for the Class Z shares of the Columbia Global Thematic Equity Fund amounted to $13. For the six months ended March 31, 2004, the Columbia European Thematic Equity Fund did not retain any redemption fees. NOTE 8. SHARES OF BENEFICIAL INTEREST As of March 31, 2004, the Funds had shareholders that held greater than 5% of the shares outstanding. Subscription and redemption activity of these shareholders may have a material effect on the Funds. The numbers of shareholders greater than 5% and the aggregate percentage of shares outstanding held were as follows:
NUMBER OF PERCENT OF SHAREHOLDERS SHARES HELD - -------------------------------------------------------------------------------- Columbia Global Thematic Equity Fund 1 11% Columbia European Thematic Equity Fund 1 7%
NOTE 9. DISCLOSURE OF SIGNIFICANT RISKS AND CONTINGENCIES FOREIGN SECURITIES There are certain additional risks involved when investing in foreign securities that are not inherent with investments in domestic securities. These risks may involve foreign currency exchange rate fluctuations, adverse political and economic developments and the possible prevention of currency exchange or other foreign governmental laws or restrictions. In addition, the liquidity of foreign securities may be more limited than that of domestic securities. Investments in emerging market countries are subject to additional risk. The risk of foreign investments is typically increased in less developed countries. These countries are also more likely to experience high levels of inflation, deflation or currency devaluation which could hurt their economies and securities markets. Because the Columbia European Thematic Equity Fund's investments are concentrated in Europe, events within the region will have a greater effect on the Fund than if the Fund were more geographically diversified. In addition, events in any one country within the region may impact the other countries or the region as a whole. Markets in the region can experience significant volatility due to social, regulatory and political uncertainties. INDUSTRY FOCUS The Funds may focus their investments in certain industries, subjecting them to greater risk than a fund that is more diversified. 23 LEGAL PROCEEDINGS Columbia, the Distributor, and certain of their affiliates (collectively, "The Columbia Group") have received information requests and subpoenas from various regulatory and law enforcement authorities in connection with their investigations of late trading and market timing in mutual funds. The Columbia Group has not uncovered any instances where Columbia or the Distributor were knowingly involved in late trading of mutual fund shares. On February 24, 2004, the Securities and Exchange Commission ("SEC") filed a civil complaint in the United States District Court for the District of Massachusetts against Columbia and the Distributor, alleging that they had violated certain provisions of the federal securities laws in connection with trading activity in mutual fund shares. Also on February 24, 2004, the New York Attorney General ("NYAG") filed a civil complaint in New York Supreme Court, County of New York against Columbia and the Distributor alleging that Columbia and the Distributor had violated certain New York anti-fraud statutes. If either Columbia or the Distributor is unsuccessful in its defense of these proceedings, it could be barred from serving as an investment advisor or distributor for any investment company registered under the Investment Company Act of 1940, as amended (a "registered investment company"). Such results could prevent Columbia, the Distributor or any company that is an affiliated person of Columbia and the Distributor from serving as an investment advisor or distributor for any registered investment company, including your fund. Your fund has been informed by Columbia and the Distributor that, if these results occur, they will seek exemptive relief from the SEC to permit them to continue to serve as your fund's investment advisor and distributor. There is no assurance that such exemptive relief will be granted. On March 15, 2004, Columbia and the Distributor entered into agreements in principle with the SEC Division of Enforcement and NYAG in settlement of the charges. Under the agreements, Columbia and the Distributor agreed, inter alia, to the following conditions: payment of $70 million in disgorgement; payment of $70 million in civil penalties; an order requiring Columbia and the Distributor to cease and desist from violations of the antifraud provisions and other provisions of the federal securities laws; governance changes designed to maintain the independence of the mutual fund boards of trustees and ensure compliance with securities laws and their fiduciary duties; and retention of an independent consultant to review Columbia's and the Distributor's compliance policies and procedures. The agreement requires the final approval of the SEC. In a separate agreement with the NYAG, the Columbia Group has agreed to reduce mutual fund fees by $80 million over a five-year period. As a result of these matters or any adverse publicity or other developments resulting from them, there may be increased redemptions or reduced sales of fund shares, which could increase transaction costs or operating expenses, or have other adverse consequences for the funds. For the six months ended March 31, 2004, Columbia has assumed $4 and $2 of legal, consulting services and Trustees' fees incurred by the Columbia Global Thematic Equity Fund and the Columbia European Thematic Equity Fund, respectively, in connection with these matters. NOTE 10. SUBSEQUENT EVENT On April 1, 2004, FleetBoston, including the Funds' investment advisor and distributor, was acquired by BOA. The merger did not change the way the Funds are managed, the investment personnel assigned to manage the Funds or the fees paid by the Funds. NOTE 11. COMPARABILITY OF FINANCIAL STATEMENTS The fiscal year end of the Funds was changed from October 31 to September 30. Accordingly, the Funds' 2004 fiscal year end will be September 30, 2004. 24 FINANCIAL HIGHLIGHTS COLUMBIA GLOBAL THEMATIC EQUITY FUND SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED) SIX MONTHS ENDED PERIOD ENDED YEAR ENDED PERIOD ENDED MARCH 31, SEPTEMBER 30, OCTOBER 31, OCTOBER 31, CLASS Z SHARES 2004(a) 2003(b) 2002(c) 2001(d) - ----------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 6.98 $ 6.37 $ 7.78 $ 10.13 INCOME FROM INVESTMENT OPERATIONS: Net investment loss (e) (0.01) --(f) (0.02) (0.03) Net realized and unrealized gain (loss) on investments and foreign currency 1.16 0.61 (1.39) (2.32) ------------- ------------- -------------- -------------- Total from Investment Operations 1.15 0.61 (1.41) (2.35) LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income (0.09) -- --(f) -- REDEMPTION FEES: Redemption fees added to paid-in capital --(e)(f) --(e)(f) N/A N/A NET ASSET VALUE, END OF PERIOD $ 8.04 $ 6.98 $ 6.37 $ 7.78 Total return (g)(h) 16.52%(i) 9.58%(i) (18.08)% (23.20)%(i) RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (j) 1.60%(k) 1.60%(k) 1.60% 1.60%(k) Net investment loss (j) (0.28)%(k) (0.01)%(k) (0.25)% (0.40)%(k) Waiver/reimbursement 18.48%(k) 10.25%(k) 5.07% 5.54%(k) Portfolio turnover rate 20%(i) 41%(i) 41% 15%(i) Net assets, end of period (000's) $ 590 $ 549 $ 1,249 $ 1,594
(a) On October 13, 2003, the Liberty Global Thematic Equity Fund was renamed Columbia Global Thematic Equity Fund. (b) The Fund changed its fiscal year end from October 31 to September 30. (c) On July 29, 2002, the Stein Roe Global Thematic Equity Fund was redesignated Liberty Global Thematic Equity Fund, Class Z shares. (d) The Fund commenced investment operations on January 2, 2001. Per share data, total return and portfolio turnover rate reflect activity from that date. (e) Per share data was calculated using average shares outstanding during the period. (f) Rounds to less than $0.01 per share. (g) Had the Investment Advisor not waived or reimbursed a portion of expenses, total return would have been reduced. (h) Total return at net asset value assuming all distributions reinvested. (i) Not annualized. (j) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%, except for the six months ended March 31, 2004 and the period ended September 30, 2003 which each had an impact of 0.01%. (k) Annualized. 25 COLUMBIA EUROPEAN THEMATIC EQUITY FUND SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED) SIX MONTHS PERIOD YEAR PERIOD ENDED ENDED ENDED ENDED MARCH 31, SEPTEMBER 30, OCTOBER 31, OCTOBER 31, CLASS Z SHARES 2004(a) 2003(b) 2002(c) 2001(d) - ----------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 6.93 $ 5.90 $ 7.46 $ 10.18 INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) (e) --(f) 0.03 0.01 0.05 Net realized and unrealized gain (loss) on investments and foreign currency 1.22 1.00 (1.44) (2.77) ------------- ------------- -------------- -------------- Total from Investment Operations 1.22 1.03 (1.43) (2.72) LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income (0.16) -- (0.13) -- REDEMPTION FEES: Redemption fees added to paid-in capital -- --(e)(f) N/A N/A NET ASSET VALUE, END OF PERIOD $ 7.99 $ 6.93 $ 5.90 $ 7.46 Total return (g)(h) 17.67%(i) 17.46%(i) (19.58)% (26.72)%(i) RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (j) 1.60%(k) 1.60%(k) 1.60% 1.60%(k) Net investment income (loss) (j) (0.10)%(k) 0.52%(k) 0.07% 0.71%(k) Waiver/reimbursement 36.76%(k) 19.60%(k) 6.08% 5.57%(k) Portfolio turnover rate 27%(i) 67%(i) 71% 33%(i) Net assets, end of period (000's) $ 310 $ 263 $ 934 $ 1,175
(a) On October 13, 2003, the Liberty European Thematic Equity Fund was renamed Columbia European Thematic Equity Fund. (b) The Fund changed its fiscal year end from October 31 to September 30. (c) On July 29, 2002, the Stein Roe European Thematic Equity Fund was redesignated Liberty European Thematic Equity Fund, Class Z shares. (d) The Fund commenced investment operations on January 2, 2001. Per share data, total return and portfolio turnover rate reflect activity from that date. (e) Per share data was calculated using average shares outstanding during the period. (f) Rounds to less than $0.01 per share. (g) Had the Investment Advisor not waived or reimbursed a portion of expenses, total return would have been reduced. (h) Total return at net asset value assuming all distributions reinvested. (i) Not annualized. (j) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%, except for the six months ended March 31, 2004 and the period ended September 30, 2003 which each had an impact of 0.01%. (k) Annualized. 26 IMPORTANT INFORMATION ABOUT THIS REPORT COLUMBIA THEMATIC EQUITY FUNDS TRANSFER AGENT Columbia Funds Services, Inc. P.O. Box 8081 Boston MA 02266-8081 800.345.6611 DISTRIBUTOR Columbia Funds Distributor, Inc. One Financial Center Boston MA 02111 INVESTMENT ADVISOR Columbia Management Advisors, Inc. 100 Federal Street Boston MA 02110 The fund mails one shareholder report to each shareholder address. If you would like more than one report, please call shareholder services at 800-345-6611 and additional reports will be sent to you. This report has been prepared for shareholders of Columbia Thematic Equity Funds. This report may also be used as sales literature when preceded or accompanied by the current prospectus which provides details of sales charges, investment objectives and operating policies of the fund and with the most recent copy of the Columbia Funds Performance Update. A description of the policies and procedures that the fund uses to determine how to vote proxies relating to its portfolio securities is available (i) without charge, upon request, by calling 800-345-6611 and (ii) on the Securities and Exchange Commission's website at http://www.sec.gov. 27 COLUMBIA FUNDS COLUMBIA THEMATIC EQUITY FUNDS LARGE GROWTH Columbia Common Stock Columbia Growth Columbia Growth Stock Columbia Large Cap Growth Columbia Tax-Managed Growth Columbia Tax-Managed Growth II Columbia Young Investor LARGE VALUE Columbia Disciplined Value Columbia Growth & Income Columbia Large Cap Core Columbia Tax-Managed Value MIDCAP GROWTH Columbia Acorn Select Columbia Mid Cap Growth Columbia Tax-Managed Aggressive Growth MIDCAP VALUE Columbia Dividend Income Columbia Mid Cap Columbia Strategic Investor SMALL GROWTH Columbia Acorn Columbia Acorn USA Columbia Small Company Equity SMALL VALUE Columbia Small Cap Columbia Small-Cap Value BALANCED Columbia Asset Allocation Columbia Balanced Columbia Liberty Fund SPECIALTY Columbia Real Estate Equity Columbia Technology Columbia Utilities TAXABLE FIXED-INCOME Columbia Contrarian Income Columbia Corporate Bond Columbia Federal Securities Columbia Fixed Income Securities Columbia High Yield Columbia High Yield Opportunities Columbia Income Columbia Intermediate Bond Columbia Intermediate Government Income Columbia Quality Plus Bond Columbia Short Term Bond Columbia Strategic Income FLOATING RATE Columbia Floating Rate Columbia Floating Rate Advantage TAX EXEMPT Columbia High Yield Municipal Columbia Intermediate Tax-Exempt Bond Columbia Managed Municipals Columbia National Municipal Bond Columbia Tax-Exempt Columbia Tax-Exempt Insured 28 SINGLE STATE TAX EXEMPT Columbia California Tax-Exempt Columbia Connecticut Intermediate Municipal Bond Columbia Connecticut Tax-Exempt Columbia Florida Intermediate Municipal Bond Columbia Massachusetts Intermediate Municipal Bond Columbia Massachusetts Tax-Exempt Columbia New Jersey Intermediate Municipal Bond Columbia New York Intermediate Municipal Bond Columbia New York Tax-Exempt Columbia Oregon Municipal Bond Columbia Pennsylvania Intermediate Municipal Bond Columbia Rhode Island Intermediate Municipal Bond MONEY MARKET Columbia Money Market Columbia Municipal Money Market INTERNATIONAL/GLOBAL Columbia Acorn International Columbia Acorn International Select Columbia Europe Columbia Global Equity Columbia International Stock Columbia Newport Asia Pacific Columbia Newport Greater China Columbia Newport Tiger INDEX Columbia Large Company Index Columbia Small Company Index Columbia U.S. Treasury Index PLEASE CONSIDER THE INVESTMENT OBJECTIVES, RISKS, CHARGES AND EXPENSES OF A MUTUAL FUND CAREFULLY BEFORE INVESTING. CONTACT US AT 800-345-6611 FOR A PROSPECTUS WHICH CONTAINS THIS AND OTHER IMPORTANT INFORMATION ABOUT THE FUND. READ IT CAREFULLY BEFORE YOU INVEST. For complete product information on any Columbia fund, visit our website at www.columbiafunds.com. Columbia Management Group and Columbia Management refer collectively to the various investment advisory subsidiaries of Columbia Management Group, including Columbia Management Advisors, Inc., the registered investment advisor, and Columbia Funds Distributor, Inc. 29 [GRAPHIC] Help your fund reduce printing and postage costs! Elect to get your shareholder reports by electronic delivery. With Columbia's eDelivery program, you receive an e-mail message when your shareholder report becomes available online. If your fund account is registered with Columbia Funds, you can sign up quickly and easily on our website at www.columbiafunds.com. Please note -- if you own your fund shares through a financial institution, contact the institution to see if it offers electronic delivery. If you own your fund shares through a retirement plan, electronic delivery may not be available to you. COLUMBIA THEMATIC EQUITY FUNDS SEMIANNUAL REPORT, MARCH 31, 2004 PRSRT STD U.S. POSTAGE PAID HOLLISTON, MA PERMIT NO. 20 [COLUMBIAFUNDS(R) LOGO] A MEMBER OF COLUMBIA MANAGEMENT GROUP (C) 2004 COLUMBIA FUNDS DISTRIBUTOR, INC. ONE FINANCIAL CENTER, BOSTON, MA 02111-2621 800.345.6611 www.columbiafunds.com LTF-03/631R-0304 (05/04) 04/1086 COLUMBIA EQUITY FUNDS Semiannual Report March 31, 2004 [Photograph of 2 ladies with a pen in hand] COLUMBIA FUNDS LOGO A MEMBER OF COLUMBIA MANAGEMENT GROUP TABLE OF CONTENTS Economic Update ............................... 1 Columbia Asset Allocation Fund ................ 2 Columbia Large Cap Growth Fund ................ 5 Columbia Disciplined Value Fund ............... 8 Columbia International Equity Fund ............ 11 Columbia Large Cap Core Fund .................. 14 Columbia Small Cap Fund ....................... 17 Columbia Small Company Equity Fund ............ 20 Financial Statements .......................... 23 Important Information About This Report ............................. 128 Economic and market conditions change frequently. There is no assurance that the trends described in this report will continue or commence. Not FDIC May Lose Value Insured No Bank Guarantee TO OUR FELLOW SHAREHOLDERS______________________________________________________ Columbia Equity Funds DEAR SHAREHOLDER: We are pleased to let you know that FleetBoston Financial Corporation and Bank of America Corporation have merged, effective April 1, 2004. As a result of the merger, Columbia Management Group became part of the Bank of America family of companies. Looking ahead, we believe this merger will be a real benefit to our shareholders. Preserving and leveraging our strengths, the combined organization intends to deliver additional research and management capabilities, as well as new products to you. There are no immediate changes planned for fund names or customer service contacts. As always, we will provide you with updates at www.columbiafunds.com or through other communications, such as newsletters and shareholder reports. As you might know, on March 15, 2004, FleetBoston Financial announced an agreement in principle with the staff of the Securities and Exchange Commission ("SEC") and the New York Attorney General to settle charges involving market timing in Columbia Management mutual funds. (Bank of America came to a similar settlement in principle at the same time.) The agreement requires the final approval of the SEC. This action reflects our full cooperation with the investigation and our strong wish to put this regrettable situation behind us. Columbia Management has taken and will continue to take steps to strengthen policies, procedures and oversight to curb frequent trading of Columbia fund shares. We want you to know that all of the members of your fund's Board of Trustees are independent of the fund's advisor and its affiliates. In addition, the board has been energetic over the past year in strengthening its capacity to oversee the Columbia funds. Recently, the Board of Trustees: o APPOINTED A CHIEF COMPLIANCE OFFICER OF THE COLUMBIA FUNDS, WHO REPORTS DIRECTLY TO EACH FUND'S AUDIT COMMITTEE. TRUSTEES WERE ALSO ASSIGNED TO FOUR SEPARATE INVESTMENT OVERSIGHT COMMITTEES, EACH DEDICATED TO MONITORING PERFORMANCE OF INDIVIDUAL FUNDS. o VOTED TO DOUBLE THE REQUIRED INVESTMENT BY EACH TRUSTEE IN THE COLUMBIA FUNDS -- TO FURTHER ALIGN THE INTERESTS OF THE TRUSTEES WITH THOSE OF OUR FUND SHAREHOLDERS. AT THE SAME TIME, NEW POLICIES WERE INSTITUTED REQUIRING ALL INVESTMENT PERSONNEL AND TRUSTEES TO HOLD THEIR COLUMBIA FUND SHARES FOR A MINIMUM OF ONE YEAR (UNLESS EXTRAORDINARY CIRCUMSTANCES WARRANT AN EXCEPTION TO BE GRANTED BY SENIOR EXECUTIVES OF THE ADVISOR FOR INVESTMENT PERSONNEL AND BY A DESIGNATED COMMITTEE FOR THE BOARD). Both your fund's trustees and Columbia Management are committed to serving the interests of our shareholders, and we will continue to work hard to help you achieve your financial goals. In the pages that follow, you'll find valuable information about the economic environment during the period and the performance of your Columbia fund. These discussions are followed by financial statements for your fund. We hope that you will take time to read this report and discuss it with your financial advisor if you have any questions. As always, thank you for choosing Columbia funds. It is a privilege to play a role in your financial future. Sincerely, /s/ Thomas C. Theobald Thomas C. Theobald Chairman, Board of Trustees /s/ J. Kevin Connaughton J. Kevin Connaughton President, Columbia Funds J. Kevin Connaughton was named president of Columbia Funds on February 27, 2004. SUMMARY FOR THE SIX-MONTH PERIOD THAT ENDED MARCH 31, 2004 o STOCK MARKETS AROUND THE WORLD BENEFITED FROM A PICK-UP IN ECONOMIC GROWTH AND AN INCREASE IN CORPORATE PROFITS. BOTH THE S&P 500 INDEX AND THE MSCI EAFE INDEX POSTED DOUBLE-DIGIT RETURNS THIS PERIOD. S&P INDEX MSCI INDEX artwork: 2 arrows up 14.08% 22.16% o PERFORMANCE IN THE FIXED-INCOME UNIVERSE WAS LED BY HIGH-YIELD BONDS. AS MEASURED BY THE MERRILL LYNCH US HIGH YIELD, CASH PAY INDEX, THIS SECTOR POSTED A RETURN MORE THAN FIVE PERCENTAGE POINTS HIGHER THAN THE RETURN FOR INVESTMENT-GRADE BONDS, AS MEASURED BY THE LEHMAN BROTHERS AGGREGATE BOND INDEX. MERRILL LYNCH INDEX LEHMAN INDEX artwork: 2 arrows up 8.21% 2.98% The S&P 500 Index is an unmanaged index that tracks the performance of 500 widely held, large capitalization US stocks. The MSCI EAFE Index is an unmanaged, market-weighted index composed of companies representative of the market structure of 21 developed market countries in Europe, Australasia and the Far East. The Merrill Lynch US High Yield, Cash Pay Index is an unmanaged index that tracks the performance of non-investment-grade corporate bonds. The Lehman Brothers Aggregate Bond Index is a market value-weighted index that tracks fixed-rate, publicly placed, dollar-denominated and non-convertible investment grade debt issues. ECONOMIC UPDATE_________________________________________________________________ Columbia Equity Funds The US economy moved ahead during the six-month reporting period that began October 1, 2003 and ended March 31, 2004. A burst of strength in the third quarter of 2003, for which annualized GDP was reported at 8.2%, was followed by fourth quarter growth of 4.1%. That pace was still comfortably above the economy's long-term average growth rate of 3.0%. GDP growth for first quarter of 2004 was 4.2%. Although job growth was slow to catch on, the economy showed signs of improvement on all fronts. Consumer spending rose as a sizeable package of tax cuts, implemented in 2003, gave disposable income a boost. Low interest rates spurred a new round of mortgage refinancing late in the period. Consumer confidence slipped late in the period as the outlook for the labor market remained clouded despite a significant pick-up in new jobs in March. Nevertheless, housing and retail sales showed steady gains throughout the period. After two years of holding back, the business sector began to show signs of improvement late in 2003. Business spending on technology-related items rose as corporate profits improved. Spending on capital equipment also picked up. US STOCKS HEADED HIGHER The US stock market snapped a three-year losing streak in 2003, but its rate of return slowed early in 2004 in response to a mixed job outlook and renewed fears about terrorism. The S&P 500 Index returned 14.08% for this six-month period. Small company stocks were even stronger. The Russell 2000 Index returned 21.69% for the period. INTERNATIONAL STOCK MARKETS REPORTED STRONG RETURNS A modest rebound in economic growth and a declining US dollar helped international stock markets post strong returns. The MSCI EAFE Index, a broad measure of performance of 21 developed equity markets in Europe, Australasia (which includes Australia and New Zealand) and the Far East, returned 22.16% for the period. European stock markets responded to improving economic data and relatively low interest rates. Japan's economy continued to report steady but modest growth, and its improvement was reflected in strong stock market returns. The stock markets of Korea, Malaysia and Taiwan scored double-digit gains during the period as did those of Colombia and Mexico. BONDS DELIVER RESPECTABLE GAINS A growing economy continued to boost investor enthusiasm for high-yield bonds, which led the fixed-income markets during the period. The six-month return for the Merrill Lynch US High Yield, Cash Pay Index was 8.21%. However, high-yield bonds slipped in the second half of this reporting period. US Treasury bonds gained ground and other segments of the bond market also delivered respectable gains as interest rates declined. The Lehman Brothers Aggregate Bond Index, a broad measure of investment-grade bond performance, returned 2.98%. However, money market fund yields remained below 1%. 1 PERFORMANCE OF A $10,000 INVESTMENT 04/01/94 - 03/31/04 ($) SALES CHARGE WITHOUT WITH ------------ ------- ------ Class A 22,140 20,866 Class B 21,305 21,305 Class C 21,311 21,311 Class G 20,812 20,812 Class T 22,048 20,780 Class Z 22,511 n/a Performance data quoted represents past performance and current performance may be lower or higher. Past performance is no guarantee of future results. The investment return and principal value will fluctuate so that shares may be worth more or less than the original cost. Please visit www.columbiafunds.com for daily and most recent month-end performance updates. PERFORMANCE INFORMATION_________________________________________________________ Columbia Asset Allocation Fund VALUE OF A $10,000 INVESTMENT 04/01/94 - 03/31/04 [MOUNTAIN CHART] CLASS A CLASS A LEHMAN SHARES WITHOUT SHARES WITH S&P 500 AGGREGATE SALES CHARGE SALES CHARGE INDEX BOND INDEX ------------ ------------ ----- ---------- $9425.00 $10000.00 $10000.00 $10000.00 9381.00 9953.00 10128.00 9920.00 9425.00 10000.00 10294.00 9919.00 9259.00 9824.00 10042.00 9897.00 9481.00 10060.00 10371.00 10094.00 9677.00 10268.00 10796.00 10106.00 9449.00 10025.00 10532.00 9958.00 9565.00 10149.00 10769.00 9949.00 9368.00 9940.00 10377.00 9927.00 9489.00 10068.00 10531.00 9995.00 9679.00 10269.00 10803.00 10193.00 9959.00 10567.00 11225.00 10436.00 10184.00 10805.00 11556.00 10500.00 10484.00 11124.00 11895.00 10646.00 10939.00 11606.00 12371.00 11059.00 11141.00 11821.00 12658.00 11139.00 11334.00 12026.00 13079.00 11115.00 11370.00 12064.00 13111.00 11249.00 11759.00 12477.00 13665.00 11358.00 11805.00 12525.00 13615.00 11506.00 12210.00 12955.00 14213.00 11679.00 12363.00 13117.00 14487.00 11842.00 12625.00 13395.00 14980.00 11920.00 12616.00 13386.00 15119.00 11713.00 12708.00 13483.00 15264.00 11631.00 12802.00 13583.00 15489.00 11566.00 13009.00 13803.00 15888.00 11543.00 13154.00 13956.00 15949.00 11697.00 12804.00 13585.00 15244.00 11729.00 12983.00 13775.00 15565.00 11709.00 13509.00 14333.00 16442.00 11913.00 13804.00 14646.00 16896.00 12177.00 14354.00 15230.00 18173.00 12385.00 14231.00 15099.00 17813.00 12270.00 14696.00 15593.00 18926.00 12308.00 14646.00 15540.00 19074.00 12339.00 14315.00 15189.00 18290.00 12202.00 14862.00 15769.00 19382.00 12385.00 15350.00 16286.00 20562.00 12503.00 15769.00 16731.00 21484.00 12651.00 16630.00 17644.00 23194.00 12993.00 16089.00 17071.00 21895.00 12883.00 16543.00 17552.00 23095.00 13072.00 16592.00 17605.00 22323.00 13262.00 16795.00 17819.00 23357.00 13323.00 17040.00 18080.00 23759.00 13457.00 17280.00 18335.00 24022.00 13629.00 17838.00 18927.00 25754.00 13618.00 18343.00 19462.00 27073.00 13665.00 18541.00 19673.00 27346.00 13736.00 18321.00 19438.00 26876.00 13866.00 18662.00 19800.00 27967.00 13984.00 18495.00 19624.00 27671.00 14014.00 17277.00 18331.00 23670.00 14242.00 17952.00 19047.00 25187.00 14575.00 18887.00 20040.00 27234.00 14498.00 19411.00 20595.00 28885.00 14581.00 20069.00 21293.00 30549.00 14624.00 20460.00 21708.00 31826.00 14728.00 20000.00 21220.00 30836.00 14470.00 20628.00 21886.00 32069.00 14550.00 20788.00 22057.00 33310.00 14597.00 20279.00 21516.00 32524.00 14468.00 20744.00 22009.00 34329.00 14422.00 20511.00 21763.00 33258.00 14360.00 20279.00 21517.00 33095.00 14353.00 20091.00 21317.00 32188.00 14519.00 20722.00 21986.00 34226.00 14573.00 20966.00 22245.00 34921.00 14571.00 21557.00 22873.00 36978.00 14501.00 20958.00 22237.00 35121.00 14454.00 21029.00 22312.00 34458.00 14628.00 22409.00 23776.00 37827.00 14822.00 22324.00 23686.00 36689.00 14779.00 21819.00 23150.00 35937.00 14771.00 22683.00 24067.00 36824.00 15078.00 22781.00 24171.00 36250.00 15216.00 23760.00 25210.00 38501.00 15436.00 23045.00 24451.00 36468.00 15534.00 22826.00 24219.00 36315.00 15636.00 21817.00 23148.00 33453.00 15892.00 21979.00 23320.00 33617.00 16188.00 22579.00 23956.00 34811.00 16454.00 21263.00 22560.00 31636.00 16597.00 20352.00 21594.00 29630.00 16680.00 21136.00 22426.00 31933.00 16610.00 21161.00 22452.00 32147.00 16709.00 20647.00 21907.00 31365.00 16773.00 20596.00 21852.00 31058.00 17148.00 19939.00 21155.00 29114.00 17346.00 18956.00 20112.00 26761.00 17549.00 19384.00 20567.00 27272.00 17915.00 20136.00 21365.00 29364.00 17668.00 20168.00 21399.00 29623.00 17555.00 19622.00 20819.00 29190.00 17697.00 19141.00 20309.00 28627.00 17869.00 19551.00 20743.00 29703.00 17572.00 18780.00 19926.00 27903.00 17913.00 18688.00 19828.00 27697.00 18065.00 17741.00 18823.00 25725.00 18221.00 17125.00 18170.00 23721.00 18441.00 17257.00 18310.00 23875.00 18753.00 16046.00 17025.00 21280.00 19057.00 16955.00 17990.00 23152.00 18969.00 17544.00 18614.00 24516.00 18963.00 17024.00 18063.00 23077.00 19356.00 16681.00 17698.00 22472.00 19373.00 16482.00 17488.00 22135.00 19641.00 16553.00 17563.00 22350.00 19625.00 17379.00 18439.00 24192.00 19788.00 18231.00 19343.00 25466.00 20156.00 18466.00 19592.00 25792.00 20116.00 18506.00 19635.00 26246.00 19440.00 18826.00 19975.00 26758.00 19568.00 18789.00 19935.00 26475.00 20087.00 19392.00 20575.00 27973.00 19900.00 19594.00 20789.00 28219.00 19948.00 20268.00 21504.00 29698.00 20151.00 20578.00 21833.00 30244.00 20312.00 20835.00 22106.00 30665.00 20532.00 20866.00 22140.00 30191.00 20689.00 The graph and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or redemption of fund shares. The Standard & Poor's (S&P) 500 Index tracks the performance of 500 widely held, large-capitalization US stocks. The Lehman Brothers Aggregate Bond Index is a market value-weighted index that tracks the daily price, coupon, pay-downs, and total return performance of fixed-rate, publicly placed, dollar-denominated, and non-convertible investment grade debt issues with at least $100 million par amount outstanding and with at least one year to final maturity. Unlike the fund, indices are not investments, do not incur fees or expenses and are not professionally managed. It is not possible to invest directly in an index. Securities in the fund may not match those in an index. AVERAGE ANNUAL TOTAL RETURN AS OF 03/31/04 (%)
SHARE CLASS A B C G T Z -------------------------------------------------------------------------------------------------------------- INCEPTION 11/01/98 11/01/98 11/18/02 03/04/96 12/30/91 12/30/91 -------------------------------------------------------------------------------------------------------------- SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT -------------------------------------------------------------------------------------------------------------- 6-month (cumulative) 11.03 4.68 10.58 5.58 10.64 9.64 10.59 5.59 11.00 4.65 11.12 -------------------------------------------------------------------------------------------------------------- 1-year 26.03 18.77 25.05 20.05 24.98 23.98 25.07 20.07 25.89 18.64 26.23 -------------------------------------------------------------------------------------------------------------- 5-year 0.22 -0.96 -0.48 -0.84 -0.48 -0.48 -0.53 -1.06 0.16 -1.02 0.40 -------------------------------------------------------------------------------------------------------------- 10-year 8.27 7.63 7.86 7.86 7.86 7.86 7.60 7.60 8.23 7.59 8.45
All results shown assume reinvestment of distributions. The "with sales charge" returns include the maximum initial sales charge of 5.75% for class A shares, the appropriate class B contingent deferred sales charge (CDSC) for the holding period after purchase as follows: through first year - 5%, second year - 4%, third year - 3%, fourth year - 3%, fifth year - 2%, sixth year - 1%, thereafter - - 0%, and the class C CDSC of 1.00% that is applied to shares sold within the first year after they are purchased. For class G shares, the CDSC for the holding period after purchase is as follows: through first year - 5%, second year - 4%, third year - 4%, fourth year - 4%, fifth year - 3%, sixth year - 2%, seventh year - 1%, thereafter - 0%. For the class T shares, the "with sales charge" returns include the maximum 5.75% charge. Performance for different share classes will vary based on differences in sales charges and fees associated with each class. Performance results reflect any voluntary waivers or reimbursement of fund expenses by the advisor or its affiliates. Absent these waivers or reimbursement arrangements, performance results would have been lower. The returns for class A and class B shares include the returns of Prime A Shares (for class A shares) and Prime B Shares (for class B shares) of the Galaxy Fund for periods prior to November 18, 2002. The returns shown for class A shares and class B shares also include the returns of Retail A Shares of the Galaxy Fund (adjusted, as necessary, to reflect the sales charges applicable to class A shares and class B shares, respectively), for periods prior to the inception of Prime A Shares (November 1, 1998) and Prime B Shares (November 1, 1998). Class A and class B shares generally would have had substantially similar returns to Retail A Shares because they would have been invested in the same portfolio of securities, although returns would have been lower to the extent that expenses for class A and class B shares exceed expenses paid by Retail A Shares. The returns shown for class C shares include the returns of Prime B Shares of the Galaxy Fund (adjusted to reflect the sales charge applicable to class C shares) for periods prior to November 18, 2002, the date on which class C shares were initially offered by the Fund. The returns shown for class C shares also include the returns of Retail A Shares of the Galaxy Fund (adjusted to reflect the sales charges applicable to class C shares) for periods prior to the date of inception of Prime B Shares (November 1, 1998). Class C shares generally would have had substantially similar returns because they would have been invested in the same portfolio of securities, although the returns would have been lower to the extent that expenses for class C shares exceed expenses paid by Retail A and Prime B Shares. Retail A shares of the Galaxy Fund were initially offered on December 30, 1991. Class A, B and C shares were initially offered on November 18, 2002. The returns for class G and class T shares include the returns of Retail A Shares (for class T shares) and Retail B Shares (for class G shares) of the Galaxy Fund for periods prior to November 18, 2002, the date on which class T and class G shares were initially offered by the Fund. The returns shown for class G shares also include the returns of Retail A Shares (adjusted to reflect sales charges applicable to class G shares) for periods prior to the inception of Retail B Shares of the Galaxy Fund (March 4, 1996). Retail A Shares of the Galaxy Fund were initially offered on December 30, 1991. Class G shares generally would have had substantially similar returns to Retail A Shares because they would have been invested in the same portfolio of securities, although the returns would have been lower to the extent that expenses for class G shares exceed expenses paid by Retail A Shares. The returns for class Z share include returns of Trust Shares of the Galaxy Fund for periods prior to November 18, 2002, the date on which class Z shares were initially offered by the Fund. Trust Shares of the Galaxy Fund were initially offered on December 30, 1991. 2 SUMMARY o FOR THE SIX-MONTH PERIOD ENDED MARCH 31, 2004, THE FUND'S CLASS A SHARES RETURNED 11.03% WITHOUT SALES CHARGE. o THE FUND'S RETURN WAS BETWEEN ITS TWO BENCHMARKS, THE S&P 500 INDEX AND THE LEHMAN BROTHERS AGGREGATE BOND INDEX. IT WAS HIGHER THAN THE MORNINGSTAR(R) MODERATE ASSET ALLOCATION CATEGORY AVERAGE. o OUR DECISION TO MAINTAIN THE FUND'S EMPHASIS ON STOCKS AND ITS POSITION IN HIGH-YIELD BONDS AIDED PERFORMANCE. [Three up arrows] LEHMAN BROTHERS CLASS A S&P 500 AGGREGATE SHARES INDEX BOND INDEX 11.03% 14.08% 2.98% OBJECTIVE Seeks a high total return by providing both a current level of income greater than that provided by popular stock market averages, as well as long-term growth in the value of the Fund's assets. TOTAL NET ASSETS $472.4 million NET ASSET VALUE PER SHARE AS OF 03/31/04 ($) Class A 15.38 Class B 15.37 Class C 15.38 Class G 15.37 Class T 15.38 Class Z 15.37 DISTRIBUTIONS DECLARED PER SHARE 10/01/03 - 03/31/04 ($) Class A 0.17 Class B 0.11 Class C 0.11 Class G 0.11 Class T 0.16 Class Z 0.19 PORTFOLIO MANAGERS' REPORT______________________________________________________ Columbia Asset Allocation Fund For the six-month period ended March 31, 2004, Columbia Asset Allocation Fund class A shares returned 11.03% without sales charge. That compares with a 14.08% return for the S&P 500 Index and a 2.98% return for the Lehman Brothers Aggregate Bond Index. We expect the fund, which typically has an allocation of 60% stocks and 40% bonds, to generate a return that is between these two benchmarks. We are pleased that the fund's return surpassed the average return of its peer group, the Morningstar(R) Moderate Asset Allocation Category, which was 10.41%.1 IMPROVING ECONOMY FUELS MARKET MOMENTUM Against a backdrop of improving economic news and rising corporate profits, the stock market continued to rise and bond market held steady. This environment proved favorable for the fund, which maintained an allocation of approximately 65% in stocks and 35% in bonds during the six-month period. Within the fund's bond allocation, our emphasis on high-yield bonds also aided performance. A FOCUS ON OPPORTUNITIES OVERSEAS Although small-cap stocks were strong performers in 2003, they became increasingly expensive relative to their earning power. As a result, we reduced our position in small-cap stocks to a neutral weight at the beginning of the period. In retrospect, our move was premature as small-cap stocks continued to perform strongly throughout the period and the fund gave up some performance with this move. However, investor interest began to rotate away from these more speculative companies and toward higher-quality companies with better long-term business prospects and whose stocks were reasonably priced. This shift helped large-cap value stocks perform well during the second half of the period. We used the proceeds of our shift away from small caps to increase our exposure to large-cap stocks, especially international large caps. We believe that a weaker US dollar, positive economic growth overseas and good valuations make foreign companies attractive relative to their US counterparts. This asset allocation decision benefited the fund's performance. Foreign companies enjoyed strong performance as evidenced by the MSCI EAFE Index, which posted a six month return of 22.16% versus 14.08% for the S&P 500 Index. WE SHIFTED HIGH-YIELD EXPOSURE TO NEUTRAL We started the period with a significant investment in high-yield bonds because we believed that the high-yield market was priced for greater economic risk than we perceived existed. After the high yield market performed relatively strongly, the yield advantage between high-yield and investment grade bonds narrowed as the markets grew increasingly optimistic about the prospects for the economy. As a result, we reduced our overweight in high-yield to a neutral position during the period. The 1 (C)2004, Morningstar, Inc. All rights reserved. The information contained herein is the proprietary information of Morningstar, Inc., may not be copied or redistributed for any purpose and may only be used for noncommercial, personal purposes. The information contained herein is not represented or warranted to be accurate, correct, complete or timely. Morningstar, Inc. shall not be responsible for investment decisions, damages or other losses resulting from the use of this information. Past performance is no guarantee of future performance. Morningstar, Inc. has not granted consent for it to be considered or deemed an "expert" under the Securities Act of 1933. 3 TOP 5 EQUITY SECTORS AS OF 03/31/04 (%) Financials 13.4 Information technology 11.8 Consumer discretionary 8.4 Health care 7.7 Industrials 7.3 TOP 10 EQUITY HOLDINGS AS OF 03/31/04 (%) Citigroup 1.2 Pfizer 1.2 General Electric 1.1 BP PLC 0.9 Microsoft 0.8 Intel 0.8 Cisco Systems 0.7 PepsiCo 0.7 Exxon Mobil 0.7 American International Group 0.6 PORTFOLIO STRUCTURE AS OF 03/31/04 (%) Common stocks 65.5 Corporate notes and bonds 14.6 Mortgage-backed securities 11.3 Asset-backed securities 3.1 U.S. government and agency obligations 2.8 Cash equivalents, net other assets and liabilities 2.4 Preferred stock 0.2 Investment management companies 0.1 Your fund is actively managed and the composition of its portfolio will change over time. Information provided is calculated as a percentage of net assets. ________________________________________________________________________________ Columbia Asset Allocation Fund fund's high-yield position made a positive contribution to relative performance. Our emphasis on higher-quality high-yield bonds was rewarded as investors shifted their attention away from the lower-quality bonds that had led the way earlier in 2003. Our underweight position in real estate investment trusts (REITs) detracted from performance as REITs were one of the better performers during the period. POSITIONED FOR CONTINUED ECONOMIC GROWTH We believe that continued economic growth, both at home and abroad, and rising corporate profits could provide an attractive environment for stocks. However, the bond market is vulnerable because interest rates are expected to move higher if the economy continues to strengthen, which we expect it to do. Interest rates and bond prices generally move in opposite directions. As a result, we continue to favor stocks over bonds in our asset allocation, with an emphasis on international and large-cap US stocks within the equity portion of the fund. Within the bond portion of the portfolio, we remain neutral on high-yield bonds and we have reduced investment grade bonds to an underweight because they are vulnerable to rising interest rates. [Photo of Harvey Hirschhorn] Harvey Hirschhorn, CFA, is the lead manager for Columbia Asset Allocation Fund and has co-managed the fund since October 2002. He has been with the advisor and its predecessors since 1973. He is responsible for allocating the fund's assets among the various asset classes. The investment decisions for these asset classes are made by professionals with expertise in that class. /s/ Harvey Hirschhorn An investment in the fund offers the potential for long-term growth, but also involves certain risks, including stock market fluctuations due to economic and business developments. Investing in high-yield securities offers the potential for high current income and attractive total return, but involves certain risks. Lower-rated bond risks include default of the issuer, rising interest rates and risk associated with investing in securities of foreign and emerging markets, including currency exchange rate fluctuations and economic and political change. The fund may be subject to the same types of risks associated with direct ownership of real estate including the decline of property value due to general, local and regional economic conditions. In addition, the fund's share price will likely be subject to more volatility than the overall stock market because it concentrates in real estate stocks. 4 PERFORMANCE OF A $10,000 INVESTMENT 04/01/94 - 03/31/04 ($) SALES CHARGE WITHOUT WITH ------------ ------- ------ Class A 25,083 23,647 Class B 24,093 24,093 Class C 24,119 24,119 Class G 23,327 23,327 Class T 24,904 23,479 Class Z 25,905 n/a Performance data quoted represents past performance and current performance may be lower or higher. Past performance is no guarantee of future results. The investment return and principal value will fluctuate so that shares may be worth more or less than the original cost. Please visit www.columbiafunds.com for daily and most recent month-end performance updates. PERFORMANCE INFORMATION_________________________________________________________ Columbia Large Cap Growth Fund VALUE OF A $10,000 INVESTMENT 04/01/94 - 03/31/04 [Mountain Chart] CLASS A CLASS A SHARES WITHOUT SHARES WITH S&P 500 RUSSELL 1000 SALES CHARGE SALES CHARGE INDEX GROWTH INDEX ------------ ------------ ----- ------------ $10000.00 $9425.00 $10000.00 $10000.00 10082.00 9502.00 10128.00 10046.00 10300.00 9708.00 10294.00 10199.00 9989.00 9414.00 10042.00 9897.00 10199.00 9613.00 10371.00 10235.00 10658.00 10046.00 10796.00 10805.00 10424.00 9825.00 10532.00 10660.00 10695.00 10080.00 10769.00 10910.00 10401.00 9803.00 10377.00 10560.00 10438.00 9838.00 10531.00 10737.00 10661.00 10048.00 10803.00 10967.00 10959.00 10329.00 11225.00 11427.00 11276.00 10628.00 11556.00 11760.00 11614.00 10946.00 11895.00 12018.00 12052.00 11359.00 12371.00 12436.00 12433.00 11718.00 12658.00 12916.00 12817.00 12080.00 13079.00 13453.00 12756.00 12022.00 13111.00 13468.00 13250.00 12489.00 13665.00 14089.00 13319.00 12553.00 13615.00 14099.00 13865.00 13068.00 14213.00 14647.00 13951.00 13149.00 14487.00 14731.00 14415.00 13586.00 14980.00 15223.00 14603.00 13764.00 15119.00 15501.00 14704.00 13859.00 15264.00 15521.00 14988.00 14126.00 15489.00 15930.00 15327.00 14445.00 15888.00 16486.00 15337.00 14456.00 15949.00 16509.00 14511.00 13676.00 15244.00 15541.00 14842.00 13988.00 15565.00 15942.00 15676.00 14774.00 16442.00 17103.00 16053.00 15130.00 16896.00 17205.00 17134.00 16149.00 18173.00 18498.00 16810.00 15843.00 17813.00 18135.00 17640.00 16626.00 18926.00 19406.00 17272.00 16279.00 19074.00 19274.00 16776.00 15811.00 18290.00 18232.00 17690.00 16673.00 19382.00 19442.00 18907.00 17820.00 20562.00 20846.00 19484.00 18364.00 21484.00 21680.00 21181.00 19963.00 23194.00 23596.00 20484.00 19306.00 21895.00 22216.00 21552.00 20312.00 23095.00 23309.00 21131.00 19916.00 22323.00 22446.00 21619.00 20376.00 23357.00 23400.00 21926.00 20666.00 23759.00 23663.00 22124.00 20852.00 24022.00 24370.00 23580.00 22224.00 25754.00 26203.00 24794.00 23368.00 27073.00 27248.00 25260.00 23808.00 27346.00 27624.00 24368.00 22967.00 26876.00 26840.00 25155.00 23709.00 27967.00 28482.00 24778.00 23353.00 27671.00 28294.00 20677.00 19488.00 23670.00 24047.00 22214.00 20936.00 25187.00 25894.00 24244.00 22850.00 27234.00 27976.00 25551.00 24082.00 28885.00 30105.00 27526.00 25943.00 30549.00 32820.00 28731.00 27079.00 31826.00 34747.00 27568.00 25983.00 30836.00 33159.00 29136.00 27461.00 32069.00 34907.00 29690.00 27983.00 33310.00 34952.00 28868.00 27208.00 32524.00 33879.00 31128.00 29338.00 34329.00 36250.00 30147.00 28414.00 33258.00 35098.00 29731.00 28022.00 33095.00 35670.00 29443.00 27750.00 32188.00 34921.00 30883.00 29107.00 34226.00 37557.00 32056.00 30213.00 34921.00 39585.00 34685.00 32690.00 36978.00 43702.00 33395.00 31474.00 35121.00 41652.00 34323.00 32349.00 34458.00 43689.00 37772.00 35600.00 37827.00 46817.00 37172.00 35034.00 36689.00 44589.00 35793.00 33735.00 35937.00 42342.00 36892.00 34770.00 36824.00 45551.00 36497.00 34398.00 36250.00 43652.00 39190.00 36937.00 38501.00 47602.00 37199.00 35060.00 36468.00 43099.00 36556.00 34454.00 36315.00 41060.00 33050.00 31150.00 33453.00 35008.00 34194.00 32228.00 33617.00 33902.00 35018.00 33004.00 34811.00 36244.00 31449.00 29641.00 31636.00 30090.00 28845.00 27187.00 29630.00 26816.00 30934.00 29155.00 31933.00 30209.00 31076.00 29289.00 32147.00 29765.00 29737.00 28027.00 31365.00 29074.00 29246.00 27564.00 31058.00 28347.00 27275.00 25707.00 29114.00 26028.00 24635.00 23218.00 26761.00 23431.00 25433.00 23970.00 27272.00 24661.00 27340.00 25768.00 29364.00 27031.00 27767.00 26170.00 29623.00 26979.00 26776.00 25236.00 29190.00 26502.00 25900.00 24411.00 28627.00 25402.00 27615.00 26027.00 29703.00 26281.00 25914.00 24423.00 27903.00 24136.00 25307.00 23852.00 27697.00 23552.00 23065.00 21739.00 25725.00 21374.00 21365.00 20137.00 23721.00 20198.00 21519.00 20282.00 23875.00 20259.00 19135.00 18034.00 21280.00 18158.00 20694.00 19504.00 23152.00 19823.00 21801.00 20548.00 24516.00 20899.00 20303.00 19136.00 23077.00 19455.00 19774.00 18637.00 22472.00 18982.00 19568.00 18443.00 22135.00 18895.00 19775.00 18638.00 22350.00 19247.00 21272.00 20049.00 24192.00 20669.00 22421.00 21132.00 25466.00 21700.00 22511.00 21216.00 25792.00 22000.00 22718.00 21412.00 26246.00 22548.00 23299.00 21960.00 26758.00 23109.00 22705.00 21400.00 26475.00 22862.00 23945.00 22568.00 27973.00 24147.00 24242.00 22848.00 28219.00 24400.00 24809.00 23383.00 29698.00 25244.00 25236.00 23785.00 30244.00 25759.00 25390.00 23930.00 30665.00 25924.00 25083.00 23647.00 30191.00 25441.00 The graph and table do not reflect a deduction of the taxes that the shareholder would pay on the fund distributions or the redemption of the fund shares. The Standard & Poor's (S&P) 500 Index is an unmanaged index that tracks the performance of 500 widely held, large-capitalization US stocks.The Russell 1000 Growth Index is an unmanaged index that tracks the performance of those companies in the Russell 1000 Index with higher price-to-book ratios and higher forecasted growth values. Unlike the fund, indices are not investments, do not incur fees or expenses and are not professionally managed. It is not possible to invest directly in an index. Securities in the fund may not match those in an index. AVERAGE ANNUAL TOTAL RETURN AS OF 03/31/04(%)
SHARE CLASS A B C G T Z ---------------------------------------------------------------------------------------------------------------------------------- INCEPTION 11/01/98 11/01/98 11/18/02 03/04/96 12/14/90 12/14/90 ---------------------------------------------------------------------------------------------------------------------------------- SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT ---------------------------------------------------------------------------------------------------------------------------------- 6-month (cumulative) 10.52 4.18 10.08 5.08 10.07 9.07 10.04 5.04 10.51 4.15 10.71 ---------------------------------------------------------------------------------------------------------------------------------- 1-year 26.89 19.63 25.89 20.89 26.03 25.03 25.82 20.82 26.82 19.53 27.34 ---------------------------------------------------------------------------------------------------------------------------------- 5-year -2.95 -4.09 -3.74 -4.06 -3.72 -3.72 -3.91 -4.39 -3.14 -4.28 -2.74 ---------------------------------------------------------------------------------------------------------------------------------- 10-year 9.63 8.99 9.19 9.19 9.20 9.20 8.84 8.84 9.55 8.91 9.99
All results shown assume reinvestment of distributions. The "with sales charge" returns include the maximum initial sales charge of 5.75% for class A shares, the appropriate class B contingent deferred sales charge (CDSC) for the holding period after purchase as follows: through first year - 5%, second year - 4%, third year -3%, fourth year - 3%, fifth year - 2%, sixth year - 1%, thereafter - 0%, and the class C CDSC of 1.00% that is applied to shares sold within the first year after they are purchased. For class G shares, the CDSC for the holding period after purchase is as follows: through first year - 5%, second year - 4%, third year - 4%, fourth year -4%, fifth year - 3%, sixth year - 2%, seventh year - 1%, thereafter - 0%. For the class T shares, the "with sales charge" returns include the maximum 5.75% charge. Performance for different share classes will vary based on differences in sales charges and fees associated with each class. Performance results reflect any voluntary waivers or reimbursement of fund expenses by the advisor or its affiliates. Absent these waivers or reimbursement arrangements, performance results would have been lower. The returns for class A and class B shares include the returns of Prime A Shares (for class A shares) and Prime B Shares (for class B shares) of the Galaxy Fund for periods prior to November 18, 2002, the date on which class A and class B shares were initially offered by the Fund. The returns shown for class A shares and class B shares also include the returns of Retail A Shares of the Galaxy Fund (adjusted, as necessary, to reflect the sales charges applicable to class A shares and class B shares, respectively) for periods prior to the date of inception of Prime A Shares and Prime B Shares (November 1, 1998). Class A and class B shares generally would have had substantially similar returns to Retail A Shares because they would have been invested in the same portfolio of securities, although returns would have been lower to the extent that expenses for class A and class B shares exceed expenses paid by Retail A Shares. The returns shown for class C shares include the returns of Prime B Shares of the Galaxy Fund (adjusted to reflect the sales charge applicable to class C shares) for periods prior to November 18, 2002, the date on which class C shares were initially offered by the Fund. The returns shown for class C shares also include the returns of Retail A Shares of the Galaxy Fund (adjusted to reflect the sales charges applicable to class C shares) for periods prior to the date of inception of Prime B Shares (November 1, 1998). Class C shares generally would have had substantially similar returns because they would have been invested in the same portfolio of securities, although the returns would have been lower to the extent that expenses for class C shares exceed expenses paid by Retail A and Prime B Shares. The returns for class G and class T shares include the returns of Retail A Shares (for class T shares) and Retail B Shares (for class G shares) of the Galaxy Fund for periods prior to November 18, 2002, the date on which class T and class G shares were initially offered by the Fund. The returns shown for class G shares also include the returns of Retail A Shares (adjusted to reflect sales charges applicable to class G shares) for periods prior to the inception of Retail B Shares of the Galaxy Fund (March 4, 1996). Retail A Shares were initially offered on December 14, 1990. Class G shares generally would have had substantially similar returns to Retail A Shares because they would have been invested in the same portfolio of securities, although the returns would be lower to the extent that expenses for class G shares exceed expenses paid by Retail A Shares. The returns for class Z shares include returns of Trust Shares of the Galaxy Fund for periods prior to November 18, 2002, the date on which class Z shares were initially offered by the Fund. Trust Shares of the Galaxy Fund were initially offered on December 14, 1990. 5 SUMMARY o FOR THE SIX-MONTH PERIOD THAT ENDED MARCH 31, 2004, THE FUND'S CLASS A SHARES RETURNED 10.52% WITHOUT SALES CHARGE. o THE FUND'S RETURN WAS SLIGHTLY LOWER THAN ITS BENCHMARK, THE RUSSELL 1000 GROWTH INDEX. THE FUND ALSO TRAILED THE AVERAGE RETURN OF ITS PEER GROUP, THE MORNINGSTAR(R) LARGE GROWTH CATEGORY. o THE FUND WAS UNDERWEIGHT IN MORE SPECULATIVE STOCKS, WHICH WERE THE PERIOD'S BEST PERFORMERS. [Three up arrows] RUSSELL CLASS A S&P 500 1000 GROWTH SHARES INDEX INDEX 10.52% 14.08% 11.28% OBJECTIVE Seeks long-term capital appreciation. TOTAL NET ASSETS $1,000.8 million NET ASSET VALUE PER SHARE AS OF 03/31/04 ($) Class A 19.44 Class B 18.67 Class C 18.69 Class G 18.08 Class T 19.34 Class Z 19.74 DISTRIBUTIONS DECLARED PER SHARE 10/01/03 - 03/31/04 ($) Class A 0.00 Class B 0.00 Class C 0.00 Class G 0.00 Class T 0.00 Class Z 0.01 PORTFOLIO MANAGERS' REPORT______________________________________________________ Columbia Large Cap Growth Fund For the six-month period ended March 31, 2004, class A shares of Columbia Large Cap Growth Fund returned 10.52% without sales charge. The fund underperformed the Russell 1000 Growth Index, which returned 11.28% as well as the S&P 500 Index which returned 14.08%. The fund also underperformed the average return of its peer group, the Morningstar(R) Large Growth Category, which was 11.63% for the period.1 RELATIVELY LIGHT EXPOSURE TO SPECULATIVE COMPANIES SHAVED PERFORMANCE During a period that was generally positive for stocks, we positioned the portfolio to take advantage of economic recovery. We focused mostly on high-quality companies with sustainable earnings, good management and the potential to increase market share. We also invested in cyclical companies that often do well at the beginning of an economic recovery. These more volatile companies were the most popular with investors during the period. However, we had relatively few of them in the portfolio, and the fund's performance fell short of its benchmark. AN EMPHASIS ON ECONOMICALLY SENSITIVE STOCKS The fund's investment in technology stocks made a positive contribution to performance. We invested in software and semiconductor companies that have the potential to benefit from two trends: an increase in corporate spending and a growing popularity of advanced communications devices. Because earnings have been strong, corporations have finally opened their checkbooks to spend on advertising, new equipment and technology upgrades. In addition, as more people use high-speed Internet services and wireless devices for their personal business and entertainment, companies that make the components for these products have done well. In this regard, the fund benefited from its investment in Intel, which profited from both trends. The company makes semiconductors that are used in a variety of technology products, used by business as well as consumers. Yahoo! and eBay have also benefited from growing demand for Internet services. In the industrial sector, our investment in Tyco International also aided the fund's return. Tyco's new management has put the company on a more solid footing. Also, the company's electronics, security and telecommunications subsidiaries have been the beneficiaries of a strengthening economy. 1 (C)2004, Morningstar, Inc. All rights reserved. The information contained herein is the proprietary information of Morningstar, Inc., may not be copied or redistributed for any purpose and may only be used for noncommercial, personal purposes. The information contained herein is not represented or warranted to be accurate, correct, complete or timely. Morningstar, Inc. shall not be responsible for investment decisions, damages or other losses resulting from the use of this information. Past performance is no guarantee of future performance. Morningstar, Inc. has not granted consent for it to be considered or deemed an "expert" under the Securities Act of 1933. 6 TOP 5 SECTORS AS OF 03/31/04 (%) Information technology 32.2 Health care 19.3 Consumer discretionary 14.6 Industrials 12.0 Consumer staples 11.6 TOP 10 HOLDINGS AS OF 03/31/04 (%) General Electric 5.4 Pfizer 4.6 Intel 3.9 Cisco Systems 3.7 Microsoft 3.4 Teva Pharmaceutical Industries 2.4 Caremark Rx 2.1 Wal-Mart Stores 2.0 Tyco International 2.0 Amgen 1.9 HOLDINGS DISCUSSED IN THIS REPORT AS OF 03/31/04 (%) Intel 3.9 Yahoo! 0.7 eBay 0.8 Tyco International 2.0 Chico's FAS 0.9 Cendant 1.3 Caremark Rx 2.1 St. Jude Medical 1.3 Your fund is actively managed and the composition of its portfolio will change over time. Information provided is calculated as a percentage of net assets. ________________________________________________________________________________ Columbia Large Cap Growth Fund In the consumer discretionary area, earnings at Chico's FAS, a women's clothing store, exceeded expectations boosting its stock price, which aided the fund's total return. Cendant, a diversified company that owns real estate and travel-related businesses, also contributed to performance. DEFENSIVE STOCKS WERE A POSITIVE INFLUENCE ON PERFORMANCE Both stock selection and sector allocation in health care, an area that tends to be less sensitive to the swings in the economy, were positive. In health care, we added Caremark Rx, an online pharmacy. We believe Caremark Rx will be a beneficiary of the new Medicaid legislation that expands drug coverage to senior citizens. We also invested in St. Jude Medical, a medical technology company that makes products used in the treatment of heart disease. Stocks in the consumer staples sector also aided total return. This is another area that tends to be less affected by economic cycles. HIGHER INTEREST RATES MAY CALL FOR A CHANGE IN DIRECTION As long as inflation is under control, the economy is growing at a steady pace and interest rates remain low, we intend to maintain our emphasis on companies whose prospects are tied to a better economy. However, if inflation moves higher and interest rates rise as the economic recovery matures, we would consider shifting our focus away from companies that depend on an expanding economy for their growth and adding more companies that have the potential to do well in any type of economic environment. Higher rates would likely dampen earnings growth and make it more difficult for stock prices to advance. However, we believe that companies whose prospects are less dependent on the economy would likely have an edge in that environment. Alexander S. Macmillan has co-managed the Columbia Large Cap Growth Fund since July 2003 and has been with the advisor and its predecessors since 1989. /s/ Alex Macmillan Paul J. Berlinguet has co-managed the fund since October 2003 and has been with the advisor since October 2003. /s/ Paul J. Berlinguet] An investment in the fund offers the potential for long-term growth, but also involves certain risks, including stock market fluctuations due to economic and business development and the possibility of losses due to the sensitivity of growth stock prices to changes in current or expected earnings. 7 PERFORMANCE OF A $10,000 INVESTMENT 04/01/94 - 03/31/04 ($) SALES CHARGE WITHOUT WITH ------------ ------- ---- Class A 25,790 24,304 Class B 24,330 24,330 Class C 24,290 24,290 Class G 24,353 24,353 Class T 25,733 24,249 Class Z 26,709 n/a Performance data quoted represents past performance and current performance may be lower or higher. Past performance is no guarantee of future results. The investment return and principal value will fluctuate so that shares may be worth more or less than the original cost. Please visit www.columbiafunds.com for daily and most recent month-end performance updates. PERFORMANCE INFORMATION_________________________________________________________ Columbia Disciplined Value Fund VALUE OF A $10,000 INVESTMENT 04/01/94 - 03/31/04 [Mountain Chart] CLASS A CLASS A SHARES WITHOUT SHARES WITH RUSSELL 1000 S&P 500 SALES CHARGE SALES CHARGE VALUE INDEX INDEX ------------ ------------ ------------ ----- $10000.00 $ 9425.00 $10000.00 $10000.00 10079.00 9499.00 10192.00 10128.00 10159.00 9575.00 10310.00 10294.00 9958.00 9386.00 10063.00 10042.00 10190.00 9604.00 10376.00 10371.00 10747.00 10129.00 10675.00 10796.00 10497.00 9893.00 10321.00 10532.00 10640.00 10028.00 10465.00 10769.00 10433.00 9833.00 10043.00 10377.00 10529.00 9923.00 10159.00 10531.00 10671.00 10057.00 10472.00 10803.00 11017.00 10383.00 10887.00 11225.00 11255.00 10607.00 11127.00 11556.00 11389.00 10734.00 11478.00 11895.00 11904.00 11220.00 11960.00 12371.00 12212.00 11509.00 12122.00 12658.00 12470.00 11753.00 12544.00 13079.00 12533.00 11812.00 12720.00 13111.00 12918.00 12175.00 13181.00 13665.00 12854.00 12115.00 13050.00 13615.00 13527.00 12749.00 13711.00 14213.00 13452.00 12679.00 14055.00 14487.00 13889.00 13091.00 14493.00 14980.00 14142.00 13329.00 14604.00 15119.00 14175.00 13360.00 14852.00 15264.00 14428.00 13599.00 14908.00 15489.00 14799.00 13948.00 15095.00 15888.00 14753.00 13905.00 15107.00 15949.00 14178.00 13363.00 14536.00 15244.00 14666.00 13822.00 14951.00 15565.00 15381.00 14497.00 15546.00 16442.00 15617.00 14719.00 16148.00 16896.00 16821.00 15854.00 17319.00 18173.00 16291.00 15354.00 17097.00 17813.00 17053.00 16073.00 17926.00 18926.00 16987.00 16010.00 18190.00 19074.00 16221.00 15288.00 17535.00 18290.00 17127.00 16143.00 18272.00 19382.00 18433.00 17373.00 19293.00 20562.00 18751.00 17673.00 20121.00 21484.00 20503.00 19324.00 21634.00 23194.00 19894.00 18750.00 20864.00 21895.00 20867.00 19667.00 22124.00 23095.00 20222.00 19059.00 21506.00 22323.00 20677.00 19488.00 22457.00 23357.00 20797.00 19601.00 23113.00 23759.00 21080.00 19868.00 22785.00 24022.00 22774.00 21465.00 24318.00 25754.00 23927.00 22551.00 25806.00 27073.00 24142.00 22754.00 25979.00 27346.00 23213.00 21878.00 25595.00 26876.00 23891.00 22517.00 25922.00 27967.00 23095.00 21767.00 25466.00 27671.00 19312.00 18202.00 21677.00 23670.00 20241.00 19077.00 22921.00 25187.00 22221.00 20943.00 24697.00 27234.00 23836.00 22465.00 25848.00 28885.00 25736.00 24256.00 26727.00 30549.00 26793.00 25253.00 26941.00 31826.00 25566.00 24096.00 26561.00 30836.00 26361.00 24846.00 27111.00 32069.00 27129.00 25569.00 29643.00 33310.00 26738.00 25200.00 29317.00 32524.00 28299.00 26672.00 30167.00 34329.00 27170.00 25608.00 29283.00 33258.00 25888.00 24399.00 28197.00 33095.00 24816.00 23389.00 27213.00 32188.00 25471.00 24007.00 28780.00 34226.00 25611.00 24139.00 28556.00 34921.00 27455.00 25877.00 28693.00 36978.00 25748.00 24267.00 27757.00 35121.00 25199.00 23750.00 25695.00 34458.00 28304.00 26676.00 28830.00 37827.00 27837.00 26236.00 28495.00 36689.00 27628.00 26039.00 28794.00 35937.00 26161.00 24657.00 27479.00 36824.00 25711.00 24232.00 27822.00 36250.00 28094.00 26479.00 29369.00 38501.00 27015.00 25462.00 29639.00 36468.00 27467.00 25887.00 30368.00 36315.00 24986.00 23550.00 29242.00 33453.00 26578.00 25050.00 30707.00 33617.00 29300.00 27615.00 30823.00 34811.00 27169.00 25607.00 29966.00 31636.00 26322.00 24808.00 28909.00 29630.00 28533.00 26892.00 30325.00 31933.00 29106.00 27433.00 31007.00 32147.00 28140.00 26522.00 30319.00 31365.00 28554.00 26912.00 30255.00 31058.00 27075.00 25518.00 29042.00 29114.00 23541.00 22188.00 26998.00 26761.00 24645.00 23228.00 26765.00 27272.00 26856.00 25312.00 28320.00 29364.00 27855.00 26254.00 28989.00 29623.00 27348.00 25776.00 28766.00 29190.00 26112.00 24611.00 28812.00 28627.00 27995.00 26385.00 30174.00 29703.00 26559.00 25032.00 29139.00 27903.00 26559.00 25032.00 29285.00 27697.00 23786.00 22418.00 27604.00 25725.00 21457.00 20223.00 25037.00 23721.00 21296.00 20072.00 25227.00 23875.00 18705.00 17629.00 22422.00 21280.00 19393.00 18278.00 24083.00 23152.00 20547.00 19365.00 25601.00 24516.00 19575.00 18449.00 24490.00 23077.00 19313.00 18202.00 23897.00 22472.00 18585.00 17516.00 23259.00 22135.00 18666.00 17593.00 23299.00 22350.00 20225.00 19062.00 25349.00 24192.00 21542.00 20303.00 26986.00 25466.00 21886.00 20628.00 27324.00 25792.00 22149.00 20875.00 27731.00 26246.00 22594.00 21295.00 28163.00 26758.00 22312.00 21029.00 27887.00 26475.00 23568.00 22213.00 29594.00 27973.00 23832.00 22461.00 29997.00 28219.00 25107.00 23663.00 31844.00 29698.00 25596.00 24125.00 32405.00 30244.00 26003.00 24508.00 33098.00 30665.00 25790.00 24304.00 32805.00 30191.00 The graph and the table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or redemption of fund shares. The Russell 1000 Value Index measures the performance of those Russell 1000 companies with lower price-to-book ratios and lower forecasted growth values. The Standard & Poor's (S&P) 500 Index is an unmanaged index that tracks the performance of 500 widely held, large-capitalization US stocks. Unlike the fund, indices are not investments, do not incur fees or expenses and are not professionally managed. It is not possible to invest directly in an index. Securities in the fund may not match those in an index. AVERAGE ANNUAL TOTAL RETURN AS OF 03/31/04 (%)
SHARE CLASS A B C G T Z ---------------------------------------------------------------------------------------------------------------------------------- INCEPTION 11/25/02 11/25/02 11/25/02 03/04/96 09/01/88 09/01/88 ---------------------------------------------------------------------------------------------------------------------------------- SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT ---------------------------------------------------------------------------------------------------------------------------------- 6-month (cumulative) 15.62 9.00 15.11 10.11 15.14 14.14 15.11 10.11 15.57 8.94 15.75 ---------------------------------------------------------------------------------------------------------------------------------- 1-year 38.20 30.28 36.90 31.90 36.52 35.52 36.88 31.88 37.88 29.99 38.41 ---------------------------------------------------------------------------------------------------------------------------------- 5-year -0.44 -1.61 -1.24 -1.51 -1.27 -1.27 -1.22 -1.63 -0.48 -1.65 -0.10 ---------------------------------------------------------------------------------------------------------------------------------- 10-year 9.94 9.29 9.30 9.30 9.28 9.28 9.31 9.31 9.91 9.26 10.32
All results shown assume reinvestment of distributions. The "with sales charge" returns include the maximum initial sales charge of 5.75% for class A shares, the appropriate class B contingent deferred sales charge for the holding period after purchase as follows: through first year - 5%, second year - 4%, third year - - 3%, fourth year - 3%, fifth year - 2%, sixth year - 1%, thereafter - 0%, and the class C contingent deferred sales charge of 1% for the first year only. For class G shares, the contingent deferred sales charge for the holding period after purchase is as follows: through the first year - 5%, second year - 4%, third year - 4%, fourth year - 4%, fifth year - 3%, sixth year - 2%, seventh year - 1%, thereafter - 0%. For the class T shares, the "with sales charge" returns include the maximum 5.75% charge. Performance for different share classes will vary based on differences in sales charges and fees associated with each class. Performance results reflect any voluntary waivers or reimbursement of fund expenses by the advisor or its affiliates. Absent these waivers or reimbursement arrangements, performance results would have been lower. Class A, class B and class C are newer classes of shares. Their performance information includes returns of the Retail A Shares (for class A shares) and Retail B Shares (for class B and class C shares) of the Galaxy Fund for periods prior to November 25, 2002, the date on which class A, B and C shares were initially offered by the Fund. The returns shown for class B and class C shares also include the performance of Retail A Shares of the Galaxy Fund for periods prior to the inception of Retail B Shares (March 4, 1996). Class B and class C shares generally would have had substantially similar returns to Retail A Shares because they would have been invested in the same portfolio of securities, although the returns would have been lower to the extent that expenses for class B and class C shares exceed expenses paid by Retail A Shares. The returns have not been restated to reflect any differences in expenses (such as 12b-1 fees) between any of the predecessor shares and the newer classes of shares. The returns for class G and class T shares include the returns of Retail A Shares (for class T shares) and Retail B Shares (for class G shares) of the Galaxy Fund for periods prior to November 25, 2002, the date on which class T and class G shares were initially offered by the Fund. The returns shown for class G shares also include the returns of Retail A Shares (adjusted to reflect the sales charge applicable to class G shares), for periods prior to the inception of Retail B Shares of the Galaxy Fund (March 4, 1996). Retail A Shares were initially offered on September 1, 1988. Class G shares generally would have had substantially similar returns to Retail A Shares because they would have been invested in the same portfolio of securities, although the returns would have been lower to the extent that expenses for class G shares exceed expenses paid by Retail A Shares. The returns for class Z shares include returns of Trust Shares of the Galaxy Fund for periods prior to November 25, 2002, the date on which class Z shares were initially offered by the Fund. 8 SUMMARY o FOR THE SIX-MONTH PERIOD ENDED MARCH 31, 2004, THE FUND'S CLASS A SHARES RETURNED 15.62% WITHOUT SALES CHARGE. o THE FUND UNDERPERFORMED THE RUSSELL 1000 VALUE INDEX BUT CAME OUT AHEAD OF BOTH THE S&P 500 INDEX, AND ITS PEER GROUP, THE MORNINGSTAR(R)LARGE BLEND CATEGORY AVERAGE. o THE FUND'S SMALL-CAP STOCKS MADE A STRONG POSITIVE CONTRIBUTION TO PERFORMANCE IN A PERIOD OF GENERALLY RISING PRICES. HOWEVER, AN EMPHASIS ON HIGHER QUALITY COMPANIES ACCOUNTED FOR A SMALL MARGIN OF UNDERPERFORMANCE RELATIVE TO THE RUSSELL 1000 VALUE INDEX. [Three up arrows] RUSSELL CLASS A S&P 500 1000 VALUE SHARES INDEX INDEX 15.62% 14.08% 17.65% OBJECTIVE Seeks long-term capital appreciation, with income as a secondary goal. TOTAL NET ASSETS $427.6 million NET ASSET VALUE PER SHARE AS OF 03/31/04 ($) Class A 12.59 Class B 12.04 Class C 12.02 Class G 12.05 Class T 12.59 Class Z 12.82 DISTRIBUTIONS DECLARED PER SHARE 10/01/03 - 03/31/04 ($) Class A 0.14 Class B 0.03 Class C 0.03 Class G 0.04 Class T 0.12 Class Z 0.18 PORTFOLIO MANAGERS' REPORT______________________________________________________ Columbia Disciplined Value Fund For the six-month period ended March 31, 2004, Columbia Disciplined Value Fund class A shares returned 15.62% without sales charge. The fund underperformed the Russell 1000 Value Index, which returned 17.65% for the same period. However, it performed better than both the S&P 500 Index, which returned 14.08%, and the Morningstar(R) Large Blend Category average, which was 13.54%.1 The fund's small-cap investments made a strong contribution to performance as small caps led the market during the period. However, our emphasis on higher quality companies resulted in a slight underperformance relative to the Russell 1000 Value Index. Stocks of weaker, more speculative companies outperformed those of well-established firms for most of the period. SMALL-COMPANY STOCKS HELP FUND PERFORMANCE The fund benefited most from its investment in small-cap stocks. The small-cap sector tends to perform relatively well in the early stages of an economic recovery, and it was true to form over the past six months. Although we tend not to make big sector bets within the fund, we did well to limit exposure to financial services stocks, which underperformed during the period. However, our light exposure to energy stocks was negative for the fund as energy stocks performed well. TOP PERFORMERS--AND DISAPPOINTMENTS Monsanto, Brunswick and Fairchild Semiconductor International were among the fund's top performers. Monsanto, which produces agricultural chemicals and related products, benefited from US government approval for a biotech product designed to control corn borer and corn rootworm pests. The company also continues to benefit from sales of a product that kills weeds in lawns. Brunswick manufactures products serving indoor and outdoor recreation markets. During the reporting period, the company signed an agreement to purchase three aluminum boat brands from another company. These brands complement Brunswick's line of fiberglass runabouts, yachts and aluminum boats. Fairchild, like many mid-cap companies, benefited from an improving economy. The company makes chips that convert voice to digital signals, which helped it take advantage of rising cell phone sales. In addition, Fairchild makes components for CD and DVD players, which also experienced higher sales. 1(C)2004, Morningstar, Inc. All rights reserved. The information contained herein is the proprietary information of Morningstar, Inc., may not be copied or redistributed for any purpose and may only be used for noncommercial, personal purposes. The information contained herein is not represented or warranted to be accurate, correct, complete or timely. Morningstar, Inc. shall not be responsible for investment decisions, damages or other losses resulting from the use of this information. Past performance is no guarantee of future performance. Morningstar, Inc. has not granted consent for it to be considered or deemed an "expert" under the Securities Act of 1933. 9 TOP 5 SECTORS AS OF 03/31/04 (%) Financials 31.4 Consumer discretionary 12.4 Energy 10.9 Consumer staples 8.8 Telecommunication services 7.2 TOP 10 HOLDINGS AS OF 03/31/04 (%) Citigroup 5.0 Exxon Mobil 4.9 ChevronTexaco 4.2 SBC Communications 3.9 J.P. Morgan Chase 3.4 BellSouth 3.3 Coca-Cola 2.8 Gillette 2.8 International Business Machines 2.5 Chubb 2.5 HOLDINGS DISCUSSED IN THIS REPORT AS OF 03/31/04 (%) Monsanto 2.0 Brunswick 1.3 Fairchild Semiconductor International 0.6 Washington Mutual 1.5 Kroger 0.7 Your fund is actively managed and the composition of its portfolio will change over time. Information provided is calculated as a percentage of net assets. ________________________________________________________________________________ Columbia Disciplined Value Fund The fund's investments in Washington Mutual and Kroger were the period's biggest disappointments. Washington Mutual, a consumer, residential and commercial lender, benefited from the sale of its finance unit to Citigroup. However, it reported lower year-over-year fourth-quarter earnings because of slower mortgage activity and its shares lost ground. Kroger, a major supermarket chain, was hurt by a long strike over the cost of health care. As a result, the company's revenues declined during the strike, and it lost customers to competitors. LARGE-COMPANY STOCKS GAIN MARKET POTENTIAL As the economy continues to strengthen in the months ahead, we believe that large-cap stocks have greater performance potential than small-cap stocks. However, we will maintain our focus on stock selection by looking for attractively priced stocks of companies with improving business prospects. [Photo of Eric Remole] Eric Remole has co-managed Columbia Large Company Index Fund since January 2003 and has been with the advisor and its predecessors since 2001. /s/ Eric Remole] [Photo of Michael Welhoelter] Michael Welhoelter, CFA, has co-managed the fund since January 2003 and has been with the advisor and its predecessors since 2001. /s/ Michael Welhoelter] An investment in the fund offers the potential for long-term growth, but also involves certain risks, including stock market fluctuations due to economic and business developments. Investing in small-cap stocks may present special risks, including possible illiquidity and greater price volatility than stocks of larger, more established companies. Value stocks are securities of companies that may have experienced adverse business or industry developments or may be subject to special risks that have caused the stocks to be out of favor. If the advisor's assessment of a company's prospects is wrong, the price of its stock may not approach the value the advisor has placed on it. 10 PERFORMANCE OF A $10,000 INVESTMENT 04/01/94 - 03/31/04 ($) SALES CHARGE WITHOUT WITH ------------ ------- ---- Class A 15,553 14,658 Class B 15,075 15,075 Class C 14,993 14,993 Class G 14,832 14,832 Class T 15,379 14,495 Class Z 16,215 n/a Performance data quoted represents past performance and current performance may be lower or higher. Past performance is no guarantee of future results. The investment return and principal value will fluctuate so that shares may be worth more or less than the original cost. Please visit www.columbiafunds.com for daily and most recent month-end performance updates. PERFORMANCE INFORMATION_________________________________________________________ Columbia International Equity Fund VALUE OF A $10,000 INVESTMENT 04/01/94 - 03/31/04 [Mountain Chart] MSCI ALL CLASS A CLASS A COUNTRY SHARES WITHOUT SHARES WITH WORLD EX MSCI EAFE SALES CHARGE SALES CHARGE U.S. INDEX INDEX ------------ ------------ ---------- ----- $10000.00 $9425.00 $10000.00 $10000.00 10161.00 9577.00 10339.00 10424.00 10201.00 9614.00 10342.00 10365.00 10176.00 9591.00 10416.00 10511.00 10337.00 9743.00 10585.00 10612.00 10610.00 10000.00 10941.00 10863.00 10353.00 9758.00 10670.00 10521.00 10594.00 9985.00 10957.00 10871.00 10040.00 9463.00 10429.00 10348.00 9988.00 9414.00 10405.00 10414.00 9532.00 8983.00 9932.00 10014.00 9491.00 8945.00 9879.00 9985.00 9939.00 9367.00 10437.00 10608.00 10265.00 9674.00 10844.00 11007.00 10354.00 9758.00 10795.00 10876.00 10256.00 9667.00 10646.00 10685.00 10835.00 10212.00 11250.00 11351.00 10509.00 9905.00 10859.00 10918.00 10623.00 10013.00 11045.00 11131.00 10526.00 9920.00 10750.00 10832.00 10761.00 10143.00 11003.00 11133.00 11091.00 10453.00 11438.00 11582.00 11325.00 10674.00 11595.00 11629.00 11416.00 10760.00 11595.00 11669.00 11634.00 10966.00 11812.00 11916.00 11986.00 11297.00 12170.00 12263.00 11843.00 11162.00 11987.00 12037.00 11876.00 11193.00 12048.00 12105.00 11467.00 10807.00 11648.00 11751.00 11400.00 10745.00 11717.00 11777.00 11726.00 11052.00 12008.00 12090.00 11668.00 10997.00 11888.00 11967.00 12161.00 11462.00 12346.00 12443.00 12202.00 11501.00 12203.00 12283.00 12246.00 11542.00 11979.00 11853.00 12363.00 11652.00 12198.00 12047.00 12460.00 11744.00 12172.00 12091.00 12647.00 11920.00 12276.00 12155.00 13423.00 12651.00 13033.00 12946.00 14402.00 13574.00 13753.00 13659.00 15150.00 14279.00 14030.00 13881.00 13823.00 13028.00 12926.00 12844.00 15034.00 14169.00 13626.00 13563.00 13520.00 12742.00 12465.00 12520.00 13475.00 12700.00 12309.00 12392.00 13859.00 13062.00 12450.00 12500.00 14153.00 13339.00 12823.00 13071.00 15263.00 14385.00 13678.00 13911.00 16079.00 15155.00 14151.00 14339.00 16373.00 15432.00 14253.00 14452.00 16712.00 15751.00 13994.00 14381.00 16823.00 15855.00 13942.00 14491.00 17181.00 16193.00 14074.00 14637.00 15090.00 14222.00 12090.00 12824.00 14366.00 13540.00 11835.00 12430.00 15366.00 14482.00 13075.00 13725.00 16412.00 15468.00 13777.00 14428.00 16947.00 15973.00 14251.00 14996.00 17711.00 16693.00 14235.00 14951.00 17109.00 16125.00 13917.00 14595.00 17397.00 16396.00 14589.00 15204.00 18056.00 17018.00 15318.00 15820.00 17426.00 16424.00 14598.00 15005.00 18142.00 17099.00 15270.00 15590.00 18496.00 17432.00 15627.00 16053.00 18984.00 17892.00 15682.00 16113.00 19280.00 18171.00 15787.00 16275.00 20055.00 18902.00 16374.00 16886.00 21202.00 19983.00 17029.00 17472.00 23990.00 22611.00 18654.00 19041.00 22875.00 21560.00 17641.00 17832.00 24627.00 23211.00 18117.00 18311.00 24566.00 23153.00 18798.00 19022.00 22328.00 21044.00 17749.00 18021.00 21537.00 20299.00 17295.00 17581.00 22246.00 20967.00 18032.00 18269.00 21527.00 20289.00 17319.00 17503.00 21820.00 20565.00 17534.00 17656.00 20544.00 19362.00 16561.00 16796.00 19783.00 18646.00 16034.00 16399.00 18741.00 17663.00 15316.00 15785.00 19163.00 18061.00 15838.00 16345.00 19304.00 18194.00 16076.00 16337.00 17596.00 16584.00 14803.00 15111.00 16289.00 15352.00 13756.00 14103.00 17277.00 16284.00 14692.00 15084.00 16512.00 15562.00 14286.00 14551.00 15782.00 14875.00 13739.00 13956.00 15370.00 14486.00 13432.00 13702.00 14592.00 13753.00 13099.00 13355.00 12873.00 12133.00 11710.00 12003.00 13180.00 12422.00 12037.00 12310.00 13862.00 13065.00 12588.00 12764.00 13923.00 13123.00 12750.00 12839.00 13241.00 12480.00 12204.00 12158.00 13529.00 12751.00 12292.00 12243.00 14186.00 13370.00 12945.00 12964.00 14138.00 13325.00 13044.00 12990.00 14090.00 13280.00 13187.00 13155.00 13504.00 12727.00 12617.00 12631.00 11997.00 11307.00 11387.00 11384.00 11734.00 11059.00 11388.00 11358.00 10670.00 10056.00 10181.00 10138.00 11101.00 10462.00 10727.00 10683.00 11471.00 10812.00 11242.00 11168.00 11151.00 10510.00 10880.00 10793.00 10659.00 10046.00 10499.00 10342.00 10526.00 9921.00 10285.00 10106.00 10491.00 9887.00 10086.00 9908.00 11224.00 10578.00 11058.00 10879.00 11837.00 11156.00 11763.00 11538.00 12089.00 11394.00 12088.00 11817.00 12425.00 11710.00 12410.00 12103.00 12749.00 12016.00 12780.00 12395.00 13013.00 12265.00 13138.00 12776.00 13830.00 13035.00 13989.00 13572.00 13987.00 13182.00 14294.00 13874.00 14925.00 14067.00 15385.00 14957.00 15215.00 14340.00 15632.00 15168.00 15408.00 14522.00 16029.00 15518.00 15553.00 14658.00 16130.00 15608.00 The graph and table do not reflect the deduction of taxes a shareholder would pay on fund distributions or the redemption of fund shares. The Morgan Stanley Capital International (MSCI) All Country World ex U.S. Index is an unmanaged index of global stock market performance that includes developed and emerging markets but excludes the United States. The MSCI EAFE Index is an unmanaged index that tracks the performance of selected stocks in Europe, Australia, Asia and the Far East. Unlike the fund, indices are not investments, do not incur fees or expenses and are not professionally managed. It is not possible to invest directly in an index. Securities in the fund may not match those in an index. AVERAGE ANNUAL TOTAL RETURN AS OF 03/31/04 (%)
SHARE CLASS A B C G T Z ---------------------------------------------------------------------------------------------------------------------------------- INCEPTION 11/01/98 11/01/98 11/18/02 11/01/98 12/30/91 12/30/91 ---------------------------------------------------------------------------------------------------------------------------------- SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT ---------------------------------------------------------------------------------------------------------------------------------- 6-month (cumulative) 19.51 12.65 19.07 14.07 18.86 17.86 19.03 14.03 19.38 12.50 19.75 ---------------------------------------------------------------------------------------------------------------------------------- 1-year 48.26 39.78 47.13 42.13 46.66 45.66 47.33 42.33 48.27 39.73 48.97 ---------------------------------------------------------------------------------------------------------------------------------- 5-year -2.22 -3.37 -2.74 -3.06 -2.85 -2.85 -3.00 -3.48 -2.24 -3.40 -1.72 ---------------------------------------------------------------------------------------------------------------------------------- 10-year 4.52 3.90 4.19 4.19 4.13 4.13 4.02 4.02 4.40 3.78 4.95
All results shown assume reinvestment of distributions. The "with sales charge" returns include the maximum initial sales charge of 5.75% for class A shares, the appropriate class B contingent deferred sales charge (CDSC) for the holding period after purchase as follows: through first year - 5%, second year - 4%, third year -3%, fourth year - 3%, fifth year - 2%, sixth year - 1%, thereafter - 0%, and the class C CDSC of 1.00% that is applied to shares sold within the first year after they are purchased. For class G shares, the CDSC for the holding period after purchase is as follows: through the first year - 5%, second year - 4%, third year - 4%, fourth year - 4%, fifth year - 3%, sixth year - 2%, seventh year - 1%, thereafter - 0%. For the class T shares, the "with sales charge" returns include the maximum 5.75% charge. Performance for different share classes will vary based on differences in sales charges and fees associated with each class. Performance results reflect any voluntary waivers or reimbursement of fund expenses by the advisor or its affiliates. Absent these waivers or reimbursement arrangements, performance results would have been lower. The returns for class A and class B shares include the returns of Prime A Shares (for class A shares) and Prime B Shares (for class B shares) of the Galaxy Fund for periods prior to November 18, 2002, the date on which class A and class B shares were initially offered by the Fund. The returns shown for class A shares and class B shares also include the returns of Retail A Shares of the Galaxy Fund (adjusted, as necessary, to reflect the sales charge applicable to class A shares and class B shares, respectively) for periods prior to the date of inception of Prime A and Prime B Shares (November 1, 1998). Class A and class B shares generally would have had substantially similar returns to Retail A Shares because they would have been invested in the same portfolio of securities, although returns would have been lower to the extent that expenses for class A and class B shares exceed expenses paid by Retail A Shares. The returns shown for class C shares include the returns of Prime B Shares of the Galaxy Fund (adjusted to reflect the sales charge applicable to class C shares) for periods prior to November 18, 2002, the date on which class C shares were initially offered by the Fund. The returns shown for class C shares also include the returns of Retail A Shares of the Galaxy Fund (adjusted to reflect the sales charges applicable to class C shares) for periods prior to the date of inception of Prime B Shares (November 1, 1998). Class C shares generally would have had substantially similar returns because they would have been invested in the same portfolio of securities, although the returns would have been lower to the extent that expenses for class C shares exceed expenses paid by Retail A and Prime B Shares. The returns for class G and class T shares include the returns of Retail A Shares (for class T shares) and Retail B Shares (for class G shares) of the Galaxy Fund for periods prior to November 18, 2002, the date on which class T and class G shares were initially offered by the Fund. The returns shown for class G shares also include the returns of Retail A Shares (adjusted to reflect the sales charges applicable to class T and class G shares) for periods prior to the inception of Retail B Shares of the Galaxy Fund (November 1, 1998). Retail A Shares of the Galaxy Fund were initially offered on December 30, 1991. Class G shares generally would have had substantially similar returns to Retail A Shares because they would have been invested in the same portfolio of securities, although the returns would have been lower to the extent that expenses for class G shares exceed expenses paid by Retail A Shares. The returns for class Z shares include returns of Trust Shares of the Galaxy Fund for periods prior to November 18, 2002, the date on which class Z shares were initially offered by the Fund. 11 SUMMARY o FOR THE SIX-MONTH PERIOD THAT ENDED MARCH 31, 2004, THE FUND'S CLASS A SHARES RETURNED 19.51% WITHOUT SALES CHARGE. o THE FUND'S RETURN WAS BEHIND THAT OF ITS BENCHMARKS, THE MSCI ALL COUNTRY WORLD EX U.S. INDEX AND THE MSCI EAFE INDEX. IT ALSO UNDERPERFORMED ITS PEER GROUP, THE MORNINGSTAR(R) FOREIGN LARGE GROWTH CATEGORY. o THE FUND'S DOUBLE-DIGIT RETURN RESULTED FROM ITS EMPHASIS ON COMPANIES THAT HAVE THE POTENTIAL TO BENEFIT FROM A PICKUP IN BOTH CONSUMER AND BUSINESS SPENDING. AN UNDERWEIGHT POSITION IN MEXICO AND KOREA HELD BACK RELATIVE PERFORMANCE. [Three up arrows] MSCI ALL COUNTRY CLASS A WORLD EX U.S. MSCI EAFE SHARES INDEX INDEX 19.51% 22.75% 22.16% OBJECTIVE Seeks long-term capital appreciation. TOTAL NET ASSETS $502.5 million NET ASSET VALUE PER SHARE AS OF 03/31/04 ($) Class A 12.89 Class B 12.80 Class C 12.73 Class G 12.70 Class T 12.86 Class Z 13.09 DISTRIBUTIONS DECLARED PER SHARE 10/01/03 - 03/31/04 ($) Class A 0.05 Class B 0.00 Class C 0.00 Class G 0.00 Class T 0.01 Class Z 0.09 PORTFOLIO MANAGER'S REPORT______________________________________________________ Columbia International Equity Fund For the six-month period ended March 31, 2004, Columbia International Equity Fund class A shares returned 19.51% without sales charge. The fund's return fell short of its benchmarks. The MSCI All Country World ex U.S. Index returned 22.75% for the period and the MSCI EAFE Index returned 22.16%. The fund also trailed the average return of the Morningstar(R) Foreign Large Growth Category, which was 20.22%.1 The fund's underweight in the emerging markets of Mexico and Korea, which made strong gains during the period, was responsible for the performance shortfall. INCREASING INVESTMENTS IN JAPAN BENEFITED RESULTS We added to our position in Japan, as the economy improved and the market moved ahead. The best performance for the period came mostly from businesses that tend to benefit from a pickup in domestic consumption, such as investments in UFJ Holdings, a large bank, Millea Holdings, an insurance company, and Mitsubishi Estates, a real estate company, aided total return. Retailers benefited from an increase in consumer spending. Aoyama Trading, a specialty men's retailer, contributed to positive performance. However, a strong yen caused some of Japan's biggest exporters to lose ground. A strong yen made Japanese products more expensive abroad. A MORE CAUTIOUS STRATEGY IN ASIA We reduced the fund's exposure to India, Taiwan and Hong Kong which were strong performers in 2003. Valuations in these markets were high, and we found better opportunities elsewhere, particularly in Japan. A change in economic policy in China also was instrumental in our decision. Chinese policy makers have taken steps to curb the country's extraordinary economic growth. China has been an engine of growth for all of Asia, and we believe that a slower economy could hurt other countries that depend on this vast country as an export market. We retained a substantial commitment of the fund's assets in Thailand. The country has continued to benefit from robust economic growth, and its stock valuations remain attractive. In Thailand, PTT Public, a fully integrated oil company, contributed to performance. 1 (C)2004, Morningstar, Inc. All rights reserved. The information contained herein is the proprietary information of Morningstar, Inc., may not be copied or redistributed for any purpose and may only be used for noncommercial, personal purposes. The information contained herein is not represented or warranted to be accurate, correct, complete or timely. Morningstar, Inc. shall not be responsible for investment decisions, damages or other losses resulting from the use of this information. Past performance is no guarantee of future performance. Morningstar, Inc. has not granted consent for it to be considered or deemed an "expert" under the Securities Act of 1933. 12 TOP 5 SECTORS AS OF 03/31/04 (%) Financials 23.9 Consumer discretionary 16.5 Information technology 10.3 Energy 8.8 Health care 8.4 TOP 10 HOLDINGS AS OF 03/31/04 (%) BP PLC 3.0 ENI S.p.A. 2.3 Mitsubishi Estates 2.1 Vodafone Group 1.9 Samsung Electronics 1.9 Millea Holdings 1.8 Smith & Nephew 1.7 UFJ Holdings 1.6 GlaxoSmithKline 1.5 Reckitt Benckiser PLC 1.5 TOP 5 COUNTRIES AS OF 03/31/04 (%) Japan 25.8 United Kingdom 22.1 France 7.7 Germany 6.0 Switzerland 4.5 HOLDINGS DISCUSSED IN THIS REPORT AS OF 03/31/04 (%) Mitsubishi Estate 2.1 Millea Holdings 1.8 UFJ Holdings 1.6 Erste Bank 0.8 PTT Public 0.7 Alpha Bank 0.7 Aoyama Trading 0.6 Burberry Group 0.6 Public Power 0.5 Hansabank 0.5 Your fund is actively managed and the composition of its portfolio will change over time. Sectors and holdings are calculated as a percentage of net assets and countries are calculated as a percentage of total investments. ________________________________________________________________________________ Columbia International Equity Fund EUROPEAN MARKETS WERE BUOYED BY BETTER ECONOMIC GROWTH The European markets moved higher, as economic growth improved and aggressive corporate restructuring seemed to be paying off. Our largest commitment was to the United Kingdom (UK) where consumer and business confidence was on the rise. There was an increase in consumer spending during the period. The fund's investment in Burberry Group was the beneficiary of that trend. Advertising and media companies also made a positive contribution to total return, as corporate spending rose. Outside the UK, we added Alpha Bank and Public Power in Greece. We also invested in Erste Bank der oesterreichen Sparkassen in Austria. Erste Bank is a financial institution that does 50% of its business in Eastern Europe, where the fund has made some notable investments. For example, in Estonia, we established a position in Hansabank. The entire Eastern European region has become economically stronger as more countries have improved their finances in order to join the European Union (EU). AN OPTIMISTIC OUTLOOK FOR INTERNATIONAL MARKETS Although global growth may slow in late 2004, we are optimistic about the prospects for international stock markets. Because we believe that Japan is positioned to be a leading performer, we have positioned the fund for this possibility. We are encouraged by the expansion of the EU and believe that a larger organization may create pressure on weaker European countries to reform their social and economic structures. Such a move could result in reinvigorated economies and could present more attractive investment opportunities in Europe. [Photo of James M. McAlear] James M. McAlear has managed or co-managed Columbia International Equity Fund since August 2002 and has been with the advisor and its predecessors since 1992. /s/ James M. McAlear There are specific risks involved when investing in foreign stocks, such as currency exchange rate fluctuations, economic change, instability of emerging countries and political developments. 13 PERFORMANCE OF A $10,000 INVESTMENT 04/01/94 - 03/31/04 ($) SALES CHARGE WITHOUT WITH ------------ ------- ---- Class A 24,130 22,733 Class B 23,186 23,186 Class C 23,186 23,186 Class G 22,582 22,582 Class T 23,979 22,591 Class Z 24,734 n/a Performance data quoted represents past performance and current performance may be lower or higher. Past performance is no guarantee of future results. The investment return and principal value will fluctuate so that shares may be worth more or less than the original cost. Please visit www.columbiafunds.com for daily and most recent month-end performance updates. PERFORMANCE INFORMATION_________________________________________________________ Columbia Large Cap Core Fund VALUE OF A $10,000 INVESTMENT 04/01/94 - 03/31/04 [Mountain Chart] CLASS A CLASS A SHARES WITHOUT SHARES WITH SALES CHARGE SALES CHARGE S&P 500 INDEX ------------ ------------ ------------- $10000.00 $9425.00 $10000.00 10156.00 9572.00 10128.00 10429.00 9830.00 10294.00 10301.00 9709.00 10042.00 10555.00 9948.00 10371.00 10947.00 10318.00 10796.00 10778.00 10159.00 10532.00 10985.00 10354.00 10769.00 10670.00 10057.00 10377.00 10734.00 10117.00 10531.00 10983.00 10352.00 10803.00 11336.00 10684.00 11225.00 11628.00 10959.00 11556.00 11857.00 11175.00 11895.00 12296.00 11589.00 12371.00 12520.00 11800.00 12658.00 12824.00 12087.00 13079.00 12751.00 12018.00 13111.00 13188.00 12430.00 13665.00 13019.00 12271.00 13615.00 13607.00 12824.00 14213.00 13883.00 13084.00 14487.00 14187.00 13371.00 14980.00 14356.00 13530.00 15119.00 14651.00 13809.00 15264.00 14921.00 14063.00 15489.00 15203.00 14329.00 15888.00 15095.00 14227.00 15949.00 14496.00 13662.00 15244.00 14915.00 14057.00 15565.00 15487.00 14597.00 16442.00 15658.00 14757.00 16896.00 16862.00 15892.00 18173.00 16639.00 15682.00 17813.00 17448.00 16445.00 18926.00 17485.00 16479.00 19074.00 16976.00 16000.00 18290.00 17636.00 16622.00 19382.00 18708.00 17633.00 20562.00 19391.00 18276.00 21484.00 20729.00 19537.00 23194.00 20016.00 18865.00 21895.00 20919.00 19716.00 23095.00 20367.00 19195.00 22323.00 21006.00 19798.00 23357.00 21493.00 20258.00 23759.00 21418.00 20187.00 24022.00 23005.00 21682.00 25754.00 24096.00 22710.00 27073.00 24291.00 22894.00 27346.00 23706.00 22342.00 26876.00 23831.00 22461.00 27967.00 23245.00 21908.00 27671.00 19651.00 18521.00 23670.00 20612.00 19427.00 25187.00 22389.00 21102.00 27234.00 23623.00 22264.00 28885.00 24903.00 23471.00 30549.00 25207.00 23757.00 31826.00 24710.00 23289.00 30836.00 25674.00 24198.00 32069.00 26683.00 25149.00 33310.00 26699.00 25164.00 32524.00 28186.00 26565.00 34329.00 27287.00 25718.00 33258.00 26244.00 24735.00 33095.00 25205.00 23756.00 32188.00 25704.00 24226.00 34226.00 25961.00 24469.00 34921.00 26642.00 25110.00 36978.00 25701.00 24223.00 35121.00 25205.00 23756.00 34458.00 27799.00 26200.00 37827.00 27832.00 26232.00 36689.00 27712.00 26119.00 35937.00 27006.00 25453.00 36824.00 27124.00 25565.00 36250.00 28939.00 27275.00 38501.00 27605.00 26018.00 36468.00 28085.00 26470.00 36315.00 26698.00 25163.00 33453.00 27664.00 26074.00 33617.00 28782.00 27127.00 34811.00 27329.00 25757.00 31636.00 25615.00 24142.00 29630.00 27331.00 25760.00 31933.00 27687.00 26095.00 32147.00 27083.00 25526.00 31365.00 27121.00 25561.00 31058.00 25646.00 24171.00 29114.00 23386.00 22041.00 26761.00 23779.00 22412.00 27272.00 25572.00 24102.00 29364.00 26050.00 24552.00 29623.00 24873.00 23443.00 29190.00 24507.00 23098.00 28627.00 25507.00 24040.00 29703.00 24155.00 22766.00 27903.00 24503.00 23094.00 27697.00 22459.00 21168.00 25725.00 20838.00 19640.00 23721.00 20665.00 19477.00 23875.00 18191.00 17145.00 21280.00 19466.00 18347.00 23152.00 20679.00 19490.00 24516.00 19544.00 18420.00 23077.00 19216.00 18111.00 22472.00 18655.00 17582.00 22135.00 18845.00 17761.00 22350.00 20260.00 19095.00 24192.00 21287.00 20063.00 25466.00 21398.00 20168.00 25792.00 21747.00 20496.00 26246.00 22232.00 20953.00 26758.00 21767.00 20515.00 26475.00 22853.00 21539.00 27973.00 23143.00 21813.00 28219.00 23872.00 22500.00 29698.00 24085.00 22700.00 30244.00 24338.00 22938.00 30665.00 24130.00 22733.00 30191.00 The graph and table do not reflect a deduction of the taxes that a shareholder would pay on fund distributions or the redemption of fund shares. The Standard and Poor's (S&P) 500 Index is an unmanaged index that tracks the performance of 500 widely held, large-capitalization US stocks. Unlike the fund, indices are not investments, do not incur fees or expenses and are not professionally managed. It is not possible to invest directly in an index. Securities in the fund may not match those in an index. AVERAGE ANNUAL TOTAL RETURN AS OF 03/31/04 (%)
SHARE CLASS A B C G T Z - ------------------------------------------------------------------------------------------------------------------------- INCEPTION 11/01/98 11/01/98 12/09/02 03/04/96 02/12/93 12/14/92 - ------------------------------------------------------------------------------------------------------------------------- SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT - ------------------------------------------------------------------------------------------------------------------------- 6-month (cumulative) 10.83 4.50 10.46 5.46 10.46 9.46 10.47 5.47 10.85 4.50 11.02 - ------------------------------------------------------------------------------------------------------------------------- 1-year 28.01 20.69 27.25 22.25 27.12 26.12 27.03 22.03 28.15 20.78 28.57 - ------------------------------------------------------------------------------------------------------------------------- 5-year -1.24 -2.40 -1.96 -2.29 -1.96 -1.96 -2.06 -2.56 -1.33 -2.50 -1.00 - ------------------------------------------------------------------------------------------------------------------------- 10-year 9.21 8.56 8.77 8.77 8.77 8.77 8.49 8.49 9.14 8.49 9.48
All results shown assume reinvestment of distributions. The "with sales charge "returns include the maximum initial sales charge of 5.75% for class A shares, the appropriate class B contingent deferred sales charge (CDSC) for the holding period after purchase as follows:through first year - 5%, second year - 4%, third year - 3%, fourth year - 3%, fifth year - 2%, sixth year - 1%, thereafter - - 0%, and the class C CDSC of 1.00% that is applied to shares sold within the first year after they are purchased. For Class G shares, the CDSC for the holding period after purchase is as follows: through first year - 5%, second year - 4%, third year - 4%, fourth year - 4%, fifth year - 3%, sixth year - 2%, seventh year - 1%, thereafter - 0%. For Class T shares, the "with sales charge" returns include the maximum initial sales charge of 5.75%. Performance for different share classes will vary based on differences in sales charges and fees associated with each class. Performance results reflect any voluntary waivers or reimbursement of fund expenses by the advisor or its affiliates. Absent these waivers or reimbursement arrangements, performance results would have been lower. The returns for class A and class B shares include the returns of Prime A Shares (for class A shares) and Prime B Shares (for class B shares) of the Galaxy Fund for periods prior to December 9, 2002, the date on which class A and class B shares were initially offered by the Fund. The returns shown for class A shares and class B shares also include the returns of Retail A Shares of the Galaxy Fund (adjusted to reflect the sales charge applicable to class A shares and class B shares, respectively) for periods prior to the inception of Prime A and Prime B Shares (November 1, 1998). Class A and class B shares generally would have had substantially similar returns to Retail A Shares because they would have been invested in the same portfolio of securities, although the returns would have been lower to the extent that expenses for class A and class B shares exceed expenses paid by Retail A Shares. The returns shown for class C shares include the returns of Prime B Shares of the Galaxy Fund (adjusted to reflect the sales charge applicable to class C shares) for periods prior to December 9, 2002, the date on which class C shares were initially offered. The returns shown for class C shares also include the returns of Retail A Shares of the Galaxy Fund (adjusted to reflect the sales charges applicable to class C shares) for periods prior to the inception of Prime B Shares (November 1, 1998). Class C shares generally would have had substantially similar returns to Retail A and Prime B Shares because they would have been invested in the same portfolio of securities, although the returns would have been lower to the extent that expenses for class C shares exceed expenses paid by Retail A and Prime B Shares. Retail A Shares were initially offered on February 12, 1993. The returns for class G and class T shares include the returns of Retail A Shares (for class T shares) and Retail B Shares (for class G shares) of the Galaxy Fund for periods prior to December 9, 2002, the date on which class T and class G shares were initially offered by the Fund. The returns shown for class G shares also include the returns of Retail A Shares for periods prior to the inception of Retail B Shares of the Galaxy Fund (March 4, 1996). Retail A Shares were initially offered on February 12, 1993. Class G shares generally would have had substantially similar returns to Retail A Shares because they would have been invested in the same portfolio of securities, although the returns would have been lower to the extent that expenses for class G shares exceed expenses paid by Retail A Shares. The returns for class Z shares include returns of Trust Shares of the Galaxy Fund for periods prior to December 9, 2002, the date on which class Z shares were initially offered by the Fund, and returns of Trust Shares of the Shawmut Fund (whose shares were initially offered on December 14, 1992), for periods prior to December 14, 1995. 14 Summary o FOR THE SIX-MONTH PERIOD THAT ENDED MARCH 31, 2004, THE FUND'S CLASS A SHARES RETURNED 10.83% WITHOUT SALES CHARGE. o THE FUND UNDERPERFORMED BOTH ITS BENCHMARK, THE S&P 500 INDEX, AND THE AVERAGE RETURN OF ITS PEER GROUP, THE MORNINGSTAR(R) LARGE BLEND CATEGORY. o STOCK SELECTION IN HEALTH CARE AND CERTAIN CONSUMER-RELATED INDUSTRIES HELPED THE FUND TO A DOUBLE-DIGIT RETURN. HOWEVER, IT TRAILED ITS BENCHMARK BECAUSE IT FOCUSED ON HIGH-QUALITY LARGE-CAP STOCKS, WHICH UNDERPERFORMED SPECULATIVE STOCKS DURING THE PERIOD. [TWO UP ARROWS] CLASS A SHARES S&P 500 INDEX 10.83% 14.08% Objective Seeks to provide a relatively high total return through long-term capital appreciation and current income. Total net assets $433.1 million NET ASSET VALUE PER SHARE as of 03/31/04 ($) Class A 12.43 Class B 12.14 Class C 12.14 Class G 12.03 Class T 12.39 Class Z 12.47 DISTRIBUTIONS DECLARED PER SHARE 10/01/03 - 03/31/04 ($) Class A 0.01 Class B 0.00 Class C 0.00 Class G 0.00 Class T 0.00 Class Z 0.02 PORTFOLIO MANAGERS' REPORT______________________________________________________ Columbia Large Cap Core Fund For the six-month period ended March 31, 2004, class A shares of Columbia Large Cap Core Fund returned 10.83% without sales charge. It underperformed both the S&P 500 Index, which returned 14.08%, and the average return of the Morningstar(R) Large Blend Category, which was 13.54% during the same period.1 Stock selection in health care and certain consumer-related industries contributed to the fund's double-digit return. However, speculative stocks performed better than the higher-quality large-cap stocks that the fund emphasizes and accounted for the performance shortfall relative to its benchmark. SPECULATIVE STOCKS LOSE MOMENTUM LATE IN THE PERIOD Most of the strength in speculative stocks occurred prior to the January announcement from the Federal Reserve Board that the fed funds rate may be revised sooner rather than later. In the wake of this announcement, speculative names lost some momentum. The performance gap between them and the higher-quality companies emphasized in the fund narrowed as the period ended. POSITIONED FOR ECONOMIC GROWTH AND MODEST INFLATION During the period, we favored stocks that stand to benefit from a strengthening economy. At the beginning of the period, we emphasized retail stocks within the consumer discretionary sector as a way to gain exposure to economic growth. That strategy was successful in generating solid returns for the fund, although these holdings lost some ground in the final months of the period. In December, we began to shift our emphasis to media companies within consumer discretionary. This move did not result in a gain for the fund during the reporting period. Still, our enthusiasm for media stocks is driven by an expectation that three strong trends should result in an increase in corporate advertising--the key to revenue and profit growth for media companies: 1) an overall increase in business spending, 2) a presidential election and 3) the 2004 summer Olympics. Historically, the combination of a presidential election and an Olympics in the same year has provided a strong tailwind for television advertising. In fact, television ad revenue has easily outpaced GDP in every instance that those two events occurred in the same year. 1 (C) 2004, Morningstar, Inc. All rights reserved. The information contained herein is the proprietary information of Morningstar, Inc., may not be copied or redistributed for any purpose and may only be used for noncommercial, personal purposes. The information contained herein is not represented or warranted to be accurate, correct, complete or timely. Morningstar, Inc. shall not be responsible for investment decisions, damages or other losses resulting from the use of this information. Past performance is no guarantee of future performance. Morningstar, Inc. has not granted consent for it to be considered or deemed an "expert" under the Securities Act of 1933. 15 TOP 5 SECTORS AS OF 03/31/04 (%) Information technology 20.1 Financials 20.0 Health care 14.3 Consumer discretionary 13.9 Industrials 11.6 TOP 10 HOLDINGS AS OF 03/31/04 (%) Pfizer 4.1 Microsoft 3.7 PepsiCo 2.9 Viacom 2.8 United Technologies 2.2 Procter & Gamble 2.2 Lexmark International 2.1 Cisco Systems 2.1 Exxon Mobil 2.1 Merrill Lynch 2.0 HOLDINGS DISCUSSED IN THIS REPORT as of 03/31/04 (%) PepsiCo 2.9 Lexmark International 2.1 Accenture 1.7 Avon Products 0.5 Your fund is actively managed and the composition of its portfolio will change over time. Information provided is calculated as a percentage of net assets. ________________________________________________________________________________ Columbia Large Cap Core Fund BALANCING VOLATILITY IN THE TECHNOLOGY SECTOR In the technology sector, we emphasized semiconductor companies. Semiconductor stocks pulled back after strong performance early in the period, but we have maintained our relatively large investment in semiconductors because we believe that its cycle is not yet over. We balanced our semiconductor investments with less volatile technology investments such as Lexmark International, which makes toner cartridges for printers, and Accenture, a consulting company. Both companies have steady revenue streams and the potential for continued strong earnings growth. They added to total return for the period. STOCK SELECTION IN HEALTH CARE AND CONSUMER STAPLES WAS FAVORABLE The fund's health care and consumer staples positions were the largest positive contributors to performance. In health care, we continue to believe that patent expiration, the threat of increased regulation and ongoing pressure on corporate expenses are negative factors for large pharmaceutical companies. As a result, we avoided them and emphasized companies in the managed care, pharmaceutical benefit management and generic drug industries. In consumer staples, the fund benefited from its investments in PepsiCo and Avon Products. AN EMPHASIS ON QUALITY AND RISK MANAGEMENT Because managing risk is an important part of our investment strategy, we have structured a portfolio that has the potential to benefit from the market's upside potential and should be less affected by market declines. We continue to emphasize high-quality companies with stable balance sheets and the potential for consistent earnings growth. In our opinion, such companies could be market leaders over the long term. Sean P. Wilson, CFA, has co-managed Columbia Large Cap Core Fund since October 2003 and has been with the advisor since June 2003. /s/ Sean P. Wilson] Michael R. Pelosi, CFA, has co-managed the fund since October 2003 and has been with the advisor and its predecessors since 1986. /s/ Michael R. Pelosi] An investment in the fund offers the potential for long-term growth, but also involves certain risks, including stock market fluctuations due to economic and business developments. 16 PERFORMANCE OF A $10,000 INVESTMENT 04/01/94 - 03/31/04 ($) SALES CHARGE WITHOUT WITH ------------ ------- ---- Class A 43,166 40,669 Class B 41,352 41,352 Class C 41,375 41,375 Class G 41,081 41,081 Class T 42,670 40,202 Class Z 44,332 n/a Performance data quoted represents past performance and current performance may be lower or higher. Past performance is no guarantee of future results. The investment return and principal value will fluctuate so that shares may be worth more or less than the original cost. Please visit www.columbiafunds.com for daily and most recent month-end performance updates. PERFORMANCE INFORMATION_________________________________________________________ Columbia Small Cap Fund VALUE OF A $10,000 INVESTMENT 04/01/94 - 03/31/04 [Mountain Chart] CLASS A CLASS A SHARES WITHOUT SHARES WITH S&P SMALL CAP RUSSELL 2000 SALES CHARGE SALES CHARGE 600 INDEX INDEX ------------ ------------ ------------- ----- $10000.00 $9425.00 $10000.00 $10000.00 9953.00 9381.00 10150.00 10059.00 10000.00 9425.00 9949.00 9946.00 9792.00 9229.00 9579.00 9608.00 9896.00 9327.00 9698.00 9766.00 10359.00 9763.00 10358.00 10310.00 10396.00 9798.00 10304.00 10276.00 10443.00 9842.00 10201.00 10236.00 10160.00 9576.00 9812.00 9822.00 10287.00 9695.00 10050.00 10086.00 10287.00 9695.00 9908.00 9959.00 10567.00 9959.00 10316.00 10374.00 10746.00 10128.00 10526.00 10552.00 11026.00 10392.00 10762.00 10786.00 11325.00 10674.00 10930.00 10972.00 11885.00 11202.00 11530.00 11541.00 12434.00 11719.00 12412.00 12206.00 12704.00 11973.00 12681.00 12459.00 13033.00 12284.00 13004.00 12682.00 12663.00 11935.00 12362.00 12115.00 13150.00 12394.00 12851.00 12624.00 13525.00 12747.00 13063.00 12957.00 13355.00 12587.00 13092.00 12943.00 13803.00 13010.00 13520.00 13346.00 14204.00 13387.00 13810.00 13619.00 15081.00 14214.00 14602.00 14347.00 15649.00 14749.00 15121.00 14912.00 15253.00 14376.00 14528.00 14300.00 14374.00 13548.00 13528.00 13051.00 15103.00 14234.00 14366.00 13810.00 15746.00 14841.00 14997.00 14349.00 15800.00 14891.00 14893.00 14128.00 16463.00 15517.00 15666.00 14711.00 17140.00 16154.00 15849.00 15096.00 17389.00 16389.00 16112.00 15398.00 17326.00 16330.00 15779.00 15025.00 16756.00 15792.00 14969.00 14316.00 16582.00 15628.00 15152.00 14356.00 18331.00 17277.00 16931.00 15953.00 19533.00 18410.00 17679.00 16637.00 20885.00 19684.00 18791.00 17411.00 21531.00 20293.00 19265.00 17809.00 23180.00 21847.00 20538.00 19113.00 22684.00 21379.00 19651.00 18274.00 22461.00 21170.00 19507.00 18155.00 22493.00 21200.00 19902.00 18473.00 22113.00 20841.00 19513.00 18181.00 23386.00 22042.00 21291.00 19524.00 24862.00 23433.00 22104.00 20329.00 24979.00 23543.00 22235.00 20441.00 23675.00 22314.00 21059.00 19339.00 23031.00 21707.00 21120.00 19380.00 21506.00 20270.00 19504.00 17810.00 18575.00 17507.00 15740.00 14351.00 19363.00 18249.00 16703.00 15475.00 19847.00 18706.00 17478.00 16106.00 20815.00 19618.00 18462.00 16950.00 21284.00 20060.00 19642.00 17999.00 21396.00 20166.00 19394.00 18239.00 20155.00 18997.00 17647.00 16761.00 19644.00 18514.00 17875.00 17023.00 21032.00 19823.00 19056.00 18548.00 21806.00 20552.00 19519.00 18819.00 22879.00 21564.00 20630.00 19670.00 22927.00 21609.00 20448.00 19131.00 21973.00 20710.00 19548.00 18423.00 21930.00 20669.00 19631.00 18426.00 21090.00 19877.00 19582.00 18502.00 22011.00 20746.00 20400.00 19607.00 23563.00 22208.00 22077.00 21826.00 23276.00 21937.00 21393.00 21475.00 23743.00 22378.00 24257.00 25020.00 24570.00 23157.00 23359.00 23371.00 24479.00 23071.00 22960.00 21964.00 24354.00 22954.00 22280.00 20684.00 24812.00 23385.00 23597.00 22487.00 24435.00 23030.00 23019.00 21763.00 25891.00 24402.00 25059.00 23424.00 26326.00 24812.00 24377.00 22735.00 25786.00 24304.00 24531.00 21721.00 25049.00 23608.00 21977.00 19490.00 27569.00 25983.00 24684.00 21165.00 28335.00 26706.00 25743.00 22267.00 28584.00 26941.00 24173.00 20807.00 28210.00 26588.00 23064.00 19789.00 29493.00 27798.00 24821.00 21337.00 30797.00 29026.00 25295.00 21862.00 31672.00 29851.00 26221.00 22616.00 31197.00 29403.00 25783.00 21392.00 31031.00 29247.00 25195.00 20701.00 28254.00 26629.00 21789.00 17915.00 29104.00 27431.00 22950.00 18963.00 30659.00 28896.00 24630.00 20431.00 32651.00 30774.00 26297.00 21691.00 32720.00 30839.00 26526.00 21466.00 33355.00 31437.00 26070.00 20878.00 35933.00 33867.00 28130.00 22554.00 36634.00 34527.00 28926.00 22759.00 35908.00 33844.00 27728.00 21749.00 35208.00 33184.00 26295.00 20670.00 30571.00 28813.00 22582.00 17549.00 30412.00 28664.00 22796.00 17505.00 28940.00 27276.00 21401.00 16248.00 28602.00 26957.00 22086.00 16770.00 30389.00 28642.00 23237.00 18266.00 29830.00 28115.00 22451.00 17248.00 29070.00 27398.00 21679.00 16770.00 28238.00 26614.00 20985.00 16264.00 28261.00 26636.00 21151.00 16474.00 30377.00 28631.00 22868.00 18035.00 33017.00 31119.00 24712.00 19971.00 33803.00 31859.00 25354.00 20332.00 35612.00 33564.00 26673.00 21605.00 36943.00 34819.00 27971.00 22594.00 36397.00 34304.00 27149.00 22176.00 38941.00 36702.00 29503.00 24039.00 40129.00 37821.00 30618.00 24893.00 41405.00 39024.00 31160.00 25398.00 42237.00 39808.00 32058.00 26500.00 42849.00 40385.00 32673.00 26739.00 43166.00 40669.00 33095.00 26988.00 The graph and table do not reflect a deduction of the taxes that a shareholder would pay on fund distributions or the redemption of fund shares. The Russell 2000 Index is an unmanaged index that tracks the performance of the 2,000 smallest of the 3,000 largest U.S. companies based on market capitalization. The Standard & Poor's SmallCap 600 Composite Index (S&P SmallCap 600 Index) is an unmanaged index that tracks the performance of 600 domestic companies traded on the New York Stock Exchange, the American Stock Exchange and NASDAQ. Unlike the fund, indices are not investments, do not incur fees or expenses and are not professionally managed. It is not possible to invest directly in an index. Securities in the fund may not match those in an index. AVERAGE ANNUAL TOTAL RETURN AS OF 03/31/04 (%)
SHARE CLASS A B C G T Z - ------------------------------------------------------------------------------------------------------------------------- INCEPTION 11/01/98 11/01/98 11/18/02 11/01/98 02/12/93 12/14/92 - ------------------------------------------------------------------------------------------------------------------------- SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT - ------------------------------------------------------------------------------------------------------------------------- 6-month (cumulative) 18.60 11.81 18.28 13.28 18.18 17.18 18.22 13.22 18.61 11.82 18.78 - ------------------------------------------------------------------------------------------------------------------------- 1-year 52.75 44.02 51.57 46.57 51.52 50.52 51.59 46.59 52.64 43.85 53.06 - ------------------------------------------------------------------------------------------------------------------------- 5-year 17.05 15.68 16.12 15.90 16.13 16.13 15.96 15.63 16.88 15.50 17.39 - ------------------------------------------------------------------------------------------------------------------------- 10-year 15.75 15.06 15.25 15.25 15.26 15.26 15.18 15.18 15.61 14.93 16.06
All results shown assume reinvestment of distributions. The "with sales charge" returns include the maximum initial sales charge of 5.75% for class A shares, the appropriate class B contingent deferred sales charge (CDSC) for the holding period after purchase as follows: through first year - 5%, second year - 4%, third year - 3%, fourth year - 3%, fifth year - 2%, sixth year - 1%, thereafter - - 0%, and the class C CDSC of 1.00% that is applied to shares sold within the first year after they are purchased. For Class G shares, the CDSC for the holding period after purchase is as follows: through first year - 5%, second year - 4%, third year - 4%, fourth year - 4%, fifth year - 3%, sixth year - 2%, seventh year - 1%, thereafter - 0%. For Class T shares, the "with sales charge" returns include the maximum initial sales charge of 5.75%. Performance for different share classes will vary based on differences in sales charges and fees associated with each class. Performance results reflect any voluntary waivers or reimbursement of fund expenses by the advisor or its affiliates. Absent these waivers or reimbursement arrangements, performance results would have been lower. Prior to November 18, 2002, the fund was named Galaxy Small Cap Value Fund, and offered Retail A, Retail B, Trust, Prime A and Prime B share classes. On that day, the fund changed its name to Liberty Small Cap Fund and began offering class A, B, C, G, T and Z shares. The returns for class A and B shares include returns of Prime A shares and Retail A shares (for class A shares) and Prime B shares and Retail A shares (for class B shares) of the former Galaxy fund for periods prior to the inception of class A and class B shares. Class C share performance information includes returns of Retail B shares and Retail A shares of the former Galaxy fund for periods prior to the inception of class C shares. The returns for class G and T shares include the returns of Retail A Shares (for class T shares) and Retail B Shares (for class G shares) of the Galaxy Fund for periods prior to the date of this prospectus. The returns shown for class G shares also include the returns of Retail A Shares (adjusted to reflect the sales charges applicable to class G shares) for periods prior to the inception of Retail B Shares of the Galaxy Fund (November 1, 1998). Retail A Shares were initially offered on February 12, 1993. Class G shares generally would have had substantially similar returns because they would have been invested in the same portfolio of securities, although the returns would be lower to the extent that expenses for class G shares exceed expenses paid by Retail A Shares. The returns for class Z shares include the returns of Trust Shares of the Galaxy Small Cap Value Fund (the "Galaxy Fund"), for periods prior to the date of this prospectus, and returns of Trust shares of the Small Cap portfolio of The Shawmut Funds (the "Shawmut Fund"), the predecessor to the Galaxy Fund, for periods prior to December 4, 1995. Total returns are not restated to reflect any expense differential (e.g. Rule 12b-1 fees) between any of the share classes Had the expense differential been reflected, the returns for the periods prior to the inception of class A, B and C shares would have been lower. 17 Summary o FOR THE SIX-MONTH PERIOD THAT ENDED MARCH 31, 2004, THE FUND'S CLASS A SHARES RETURNED 18.60% WITHOUT SALES CHARGE. o THE FUND TRAILED BOTH ITS BENCHMARKS, THE RUSSELL 2000 INDEX AND THE S&P SMALLCAP 600 INDEX. IT ALSO CAME OUT BEHIND ITS PEER GROUP, THE MORNINGSTAR(R) SMALL BLEND CATEGORY. o ALTHOUGH THE FUND DELIVERED AN ATTRACTIVE, DOUBLE-DIGIT RETURN, AN UNDERWEIGHT IN TECHNOLOGY, A BIAS TOWARD LESS SPECULATIVE NAMES AND A LARGE CASH POSITION HURT THE FUND'S RETURN RELATIVE TO ITS BENCHMARK AND PEER GROUP. [Three up arrows] S&P CLASS A RUSSELL 2000 SMALLCAP SHARES INDEX 600 INDEX 18.60% 21.69% 21.91% Objective Seeks long-term capital appreciation. Total net assets $1,581.5 million NET ASSET VALUE PER SHARE AS of 03/31/04 ($) Class A 17.67 Class B 17.08 Class C 17.09 Class G 16.93 Class T 17.53 Class Z 17.83 DISTRIBUTIONS DECLARED PER SHARE 10/01/03 - 03/31/04 ($) Class A 0.44 Class B 0.34 Class C 0.34 Class G 0.34 Class T 0.42 Class Z 0.49 PORTFOLIO MANAGER'S REPORT______________________________________________________ Columbia Small Cap Fund For the six-month period ended March 31, 2004, Columbia Small Cap Fund class A shares returned 18.60% without sales charge. It trailed both the Russell 2000 Index and the S&P SmallCap 600 Index, which returned 21.69% and 21.91%, respectively. The fund also fell behind the 21.59% average return of its peer group, the Morningstar(R) Small Blend Category.1 LOW TECHNOLOGY STAKE AND LARGE CASH POSITION HURT RETURN Despite strong gains from many sectors, the fund's relative performance suffered from a below-average technology stake, a bias toward less speculative names and a large cash position. Cash built up as new money poured in and as we trimmed stocks that had appreciated. With small-cap stocks rallying sharply, we found it harder to find decent quality companies whose stocks were attractively priced. To alleviate some of these pressures, the Trustees voted to close the fund to new investors and new accounts effective March 1. PATIENCE REWARDED WITH STRONG GAINS Some of the fund's biggest gains came from stocks that we bought when they were out of favor and then held for some time. In the industrial sector, standouts included Armor Holdings, which makes armor for vehicles as well as bulletproof vests for military and law enforcement personnel. The stock benefited from rising demand related to the conflict in Iraq. Terex, a construction equipment company, and Reliance Steel & Aluminum, both of which had languished when the economy was weak, also rebounded nicely as the recovery got underway. The fund's sizable stake in consumer discretionary stocks, which included restaurants, retailers and media companies, also helped performance. Mainstream retailers with strong financial characteristics, including American Eagle Outfitters and Buckle, benefited from improved earnings. Rayovac, which makes batteries, also did well as investors began seeing the value of recent acquisitions and as earnings picked up. MORE MIXED RESULTS FROM HEALTH CARE AND TECHNOLOGY Many of the fund's health care investments contributed positively to performance. Valeant Pharmaceuticals International, a specialty drug company that we have owned for years, rebounded as the company's 1 (C)2004, Morningstar, Inc. All rights reserved. The information contained herein is the proprietary information of Morningstar, Inc., may not be copied or redistributed for any purpose and may only be used for noncommercial, personal purposes. The information contained herein is not represented or warranted to be accurate, correct, complete or timely. Morningstar, Inc. shall not be responsible for investment decisions, damages or other losses resulting from the use of this information. Past performance is no guarantee of future performance. Morningstar, Inc. has not granted consent for it to be considered or deemed an "expert" under the Securities Act of 1933. 18 TOP 5 SECTORS AS OF 03/31/04 (%) Consumer discretionary 21.9 Industrials 17.3 Health care 12.4 Information technology 11.8 Financials 8.2 TOP 10 HOLDINGS AS OF 03/31/04 (%) iShares Russell 2000 Index 2.9 Invacare 1.3 Benchmark Electronics 1.1 Albany International 1.0 Armor Holdings 1.0 Unifirst 0.8 Greif 0.8 Valeant Pharmaceuticals International 0.8 West Pharmaceutical Services 0.7 ADVO 0.7 HOLDINGS DISCUSSED IN THIS REPORT AS OF 03/31/04 (%) Armor Holdings 1.0 Albany International 1.0 Valeant Pharmaceuticals International 0.8 Reliance Steel & Aluminum 0.7 Res-Care 0.7 Buckle 0.6 Rayovac 0.6 Thoratec 0.6 Terex 0.5 American Eagle Outfitters 0.5 Fairchild Semiconductor International 0.4 Cray 0.3 Your fund is actively managed and the composition of its portfolio will change over time. Information provided is calculated as a percentage of net assets. ________________________________________________________________________________ Columbia Small Cap Fund second-generation Hepatitis C drug showed positive results in trials. Res-Care, which runs group homes for developmentally disabled people, adapted to disappointing revenue growth by paying down debt. Earnings and cash flows improved, sending the stock price higher. By contrast, Thoratec, a company that makes medical devices to prolong the lives of patients waiting for heart transplants, tumbled as investors worried about insurance reimbursement issues. Our disciplined focus on valuation and quality meant that we did not have a market weight in technology. Nor did we own many of the more speculative and better performing stocks. The fund, however, benefited from owning Fairchild Semiconductor International, a well-run semiconductor manufacturer that rallied sharply as the economy improved. Cray, a supercomputer manufacturer, was a new addition to the portfolio. It declined amid news of a delayed product launch. Elsewhere, Albany International--a paper products and services company--suffered from slower-than-expected revenue and earnings growth. GOOD OPPORTUNITIES FOR STOCK PICKERS By period end, stock prices reflected expectations for meaningful earnings improvements. We think companies that can deliver on earnings expectations should be winners, but those that cannot may suffer. Depending on what happens to earnings overall, we think the market could remain volatile or even pull back. We plan to maintain a selective approach that focuses on buying well-managed, profitable companies when their stocks are selling at attractive prices. [Photo of Peter Larson] Peter Larson has managed Columbia Small Cap Fund since 1992 and has been with the advisor and its predecessors since 1963. /s/ Peter Larson An investment in the fund offers the potential for long-term growth, but also involves certain risks, including stock market fluctuations due to economic and business developments. Investing in small-cap stocks may present special risks, including possible illiquidity and greater price volatility than stocks of larger, more established companies. 19 PERFORMANCE OF A $10,000 INVESTMENT 04/01/94 - 03/31/04 ($) SALES CHARGE WITHOUT WITH ------------ ------- ---- Class A 23,216 21,884 Class B 21,948 21,948 Class C 21,895 21,895 Class G 21,908 21,908 Class T 23,202 21,872 Class Z 24,233 n/a Performance data quoted represents past performance and current performance may be lower or higher. Past performance is no guarantee of future results. The investment return and principal value will fluctuate so that shares may be worth more or less than the original cost. Please visit www.columbiafunds.com for daily and most recent month-end performance updates. PERFORMANCE INFORMATION_________________________________________________________ Columbia Small Company Equity Fund VALUE OF A $10,000 INVESTMENT 04/01/94 - 03/31/04 [Mountain Chart] CLASS A CLASS A SHARES WITHOUT SHARES WITH RUSSELL 2000 RUSSELL 2000 SALES CHARGE SALES CHARGE GROWTH INDEX INDEX ------------ ------------ ------------ ----- $10000.00 $9425.00 $10000.00 $10000.00 9975.00 9401.00 10015.00 10059.00 9709.00 9150.00 9792.00 9946.00 9167.00 8640.00 9370.00 9608.00 9275.00 8742.00 9504.00 9766.00 9900.00 9331.00 10202.00 10310.00 10042.00 9464.00 10246.00 10276.00 10292.00 9700.00 10357.00 10236.00 9958.00 9386.00 9937.00 9822.00 10302.00 9710.00 10173.00 10086.00 9989.00 9414.00 9966.00 9959.00 10395.00 9798.00 10426.00 10374.00 10929.00 10300.00 10731.00 10552.00 11259.00 10611.00 10893.00 10786.00 11360.00 10707.00 11036.00 10972.00 12335.00 11625.00 11796.00 11541.00 13445.00 12672.00 12715.00 12206.00 13555.00 12776.00 12872.00 12459.00 14173.00 13358.00 13137.00 12682.00 13792.00 12999.00 12490.00 12115.00 14291.00 13469.00 13041.00 12624.00 14298.00 13476.00 13331.00 12957.00 13989.00 13185.00 13220.00 12943.00 14923.00 14064.00 13823.00 13346.00 15642.00 14742.00 14097.00 13619.00 17439.00 16436.00 15179.00 14347.00 18124.00 17082.00 15958.00 14912.00 16908.00 15936.00 14921.00 14300.00 15547.00 14653.00 13099.00 13051.00 16497.00 15548.00 14068.00 13810.00 17568.00 16558.00 14793.00 14349.00 17097.00 16114.00 14155.00 14128.00 17148.00 16162.00 14549.00 14711.00 17277.00 16283.00 14832.00 15096.00 17939.00 16907.00 15203.00 15398.00 16179.00 15248.00 14285.00 15025.00 15168.00 14295.00 13276.00 14316.00 14691.00 13847.00 13122.00 14356.00 17249.00 16257.00 15095.00 15953.00 18193.00 17147.00 15606.00 16637.00 19175.00 18072.00 16405.00 17411.00 19748.00 18613.00 16898.00 17809.00 21342.00 20115.00 18246.00 19113.00 20360.00 19190.00 17149.00 18274.00 19523.00 18401.00 16741.00 18155.00 19727.00 18592.00 16751.00 18473.00 19253.00 18146.00 16529.00 18181.00 20861.00 19661.00 17988.00 19524.00 21754.00 20503.00 18742.00 20329.00 21477.00 20242.00 18856.00 20441.00 19967.00 18819.00 17485.00 19339.00 19714.00 18580.00 17664.00 19380.00 17951.00 16919.00 16189.00 17810.00 13514.00 12737.00 12452.00 14351.00 14979.00 14117.00 13715.00 15475.00 15012.00 14149.00 14431.00 16106.00 16014.00 15094.00 15551.00 16950.00 17568.00 16558.00 16958.00 17999.00 17756.00 16735.00 17721.00 18239.00 15222.00 14347.00 16100.00 16761.00 14902.00 14046.00 16673.00 17023.00 15266.00 14388.00 18145.00 18548.00 15773.00 14866.00 18174.00 18819.00 17062.00 16080.00 19132.00 19670.00 16797.00 15831.00 18541.00 19131.00 16500.00 15551.00 17847.00 18423.00 16940.00 15966.00 18192.00 18426.00 17249.00 16257.00 18657.00 18502.00 20079.00 18925.00 20629.00 19607.00 24408.00 23005.00 24266.00 21826.00 24189.00 22798.00 24041.00 21475.00 29960.00 28237.00 29635.00 25020.00 29873.00 28155.00 26520.00 23371.00 26007.00 24512.00 23842.00 21964.00 24489.00 23081.00 21753.00 20684.00 27310.00 25739.00 24564.00 22487.00 24601.00 23186.00 22459.00 21763.00 26925.00 25377.00 24821.00 23424.00 25889.00 24400.00 23588.00 22735.00 23960.00 22582.00 21672.00 21721.00 21097.00 19884.00 17737.00 19490.00 23074.00 21747.00 18822.00 21165.00 24444.00 23039.00 20345.00 22267.00 22689.00 21384.00 17556.00 20807.00 21305.00 20080.00 15960.00 19789.00 22634.00 21333.00 17913.00 21337.00 23273.00 21935.00 18329.00 21862.00 24124.00 22737.00 18829.00 22616.00 23379.00 22035.00 17223.00 21392.00 22381.00 21094.00 16147.00 20701.00 18592.00 17523.00 13541.00 17915.00 19882.00 18739.00 14843.00 18963.00 21411.00 20180.00 16083.00 20431.00 23047.00 21721.00 17085.00 21691.00 22049.00 20781.00 16476.00 21466.00 20400.00 19227.00 15410.00 20878.00 22021.00 20755.00 16750.00 22554.00 21171.00 19954.00 16388.00 22759.00 19643.00 18513.00 15429.00 21749.00 18113.00 17071.00 14121.00 20670.00 15093.00 14225.00 11950.00 17549.00 15120.00 14251.00 11944.00 17505.00 14402.00 13574.00 11082.00 16248.00 14934.00 14075.00 11643.00 16770.00 16316.00 15378.00 12796.00 18266.00 15266.00 14388.00 11914.00 17248.00 14521.00 13686.00 11589.00 16770.00 14108.00 13297.00 11280.00 16264.00 14508.00 13673.00 11450.00 16474.00 15504.00 14613.00 12534.00 18035.00 17259.00 16267.00 13946.00 19971.00 17672.00 16656.00 14215.00 20332.00 18562.00 17495.00 15290.00 21605.00 19440.00 18323.00 16111.00 22594.00 18748.00 17670.00 15703.00 22176.00 20704.00 19513.00 17060.00 24039.00 21182.00 19964.00 17616.00 24893.00 21714.00 20465.00 17696.00 25398.00 22632.00 21331.00 18625.00 26500.00 22845.00 21531.00 18597.00 26739.00 23271.00 21884.00 18685.00 26988.00 All results shown assume reinvestment of distributions. The graph and the table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or redemption of fund shares. The Russell 2000 Growth Index is an unmanaged index that measures the performance of those Russell 2000 companies with higher price-to-book ratios and higher forecasted growth values. The Russell 2000 Index, also an unmanaged index, tracks the performance of the 2,000 smallest of the 3,000 largest U.S. companies, based on market capitalization. Unlike the fund, indices are not investments, do not incur fees or expenses and are not professionally managed. It is not possible to invest directly in an index. Securities in the fund may not match those in an index. AVERAGE ANNUAL TOTAL RETURN AS OF 03/31/04 (%)
SHARE CLASS A B C G T Z - ------------------------------------------------------------------------------------------------------------------------- INCEPTION 11/18/02 11/18/02 11/18/02 03/04/96 12/30/91 12/30/91 - ------------------------------------------------------------------------------------------------------------------------- SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT - ------------------------------------------------------------------------------------------------------------------------- 6-month (cumulative) 23.83 16.71 23.38 18.38 23.45 22.45 23.34 18.34 23.85 16.72 24.11 - ------------------------------------------------------------------------------------------------------------------------- 1-year 60.04 50.78 58.83 53.83 58.29 57.29 58.54 53.54 60.09 50.95 60.68 - ------------------------------------------------------------------------------------------------------------------------- 5-year 9.27 7.98 8.43 8.14 8.38 8.38 8.39 7.96 9.26 7.96 9.73 - ------------------------------------------------------------------------------------------------------------------------- 10-year 8.79 8.15 8.18 8.18 8.15 8.15 8.16 8.16 8.78 8.14 9.25
All results shown assume reinvestment of distributions. The "with sales charge" returns include the maximum initial sales charge of 5.75% for class A shares, the appropriate class B contingent deferred sales charge for the holding period after purchase as follows: through first year - 5%, second year - 4%, third year - - 3%, fourth year - 3%, fifth year - 2%, sixth year - 1%, thereafter - 0%, and the class C contingent deferred sales charge of 1% for the first year only. For class G shares, the contingent deferred sales charge for the holding period after purchase is as follows: through the first year - 5%, second year - 4%, third year - 4%, fourth year - 4%, fifth year - 3%, sixth year - 2%, seventh year - 1%, thereafter - 0%. For the class T shares, the "with sales charge" returns include the maximum 5.75% charge. Performance for different share classes will vary based on differences in sales charges and fees associated with each class. Performance results reflect any voluntary waivers or reimbursement of fund expenses by the advisor or its affiliates. Absent these waivers or reimbursement arrangements, performance results would have been lower. Class A, class B, and class C are newer classes of shares. Their performance information includes returns of Retail A Shares (for class A shares) and Retail B Shares (for class B and class C shares) of the Galaxy Fund for periods prior to November 18, 2002, the date on which class A, B, and C shares were initially offered by the Fund. The returns of class B and class C shares also include the returns of Retail A Shares for periods prior to the inception of Retail B Shares of the Galaxy Fund (March 4, 1996). Class B and class C shares generally would have had substantially similar returns to Retail A Shares because they would have been invested in the same portfolio of securities, although the returns would be lower to the extent that expenses for class B and class C shares exceed expenses paid by Retail A Shares. The returns have not been restated to reflect any differences in expenses between the predecessor shares and the newer class of shares. If differences in expenses had been reflected, the returns shown for periods prior to the inception of the newer classes of shares would have been lower. The returns for class G and T shares include the returns of Retail A Shares (for class T shares) and Retail B Shares (for class G shares) of the Galaxy Fund for periods prior to November 18, 2002, the date on which class T and class G shares were initially offered by the Fund. The returns shown for class G shares also include the returns of Retail A Shares (adjusted to reflect the sales charge applicable to class G shares) for periods prior to the inception of Retail B Shares of the Galaxy Fund (March 4, 1996). Retail A Shares were initially offered on December 30, 1991. Class G shares generally would have had substantially similar returns to Retail A Shares because they would have been invested in the same portfolio of securities, although the returns would have been lower to the extent that expenses for class G shares exceed expenses paid by Retail A Shares. The returns for class Z shares include the returns of Trust Shares of the Galaxy Fund for periods prior to November 18, 2002, the date on which class Z shares were initially offered by the Fund. 20 Summary o FOR THE SIX-MONTH PERIOD THAT ENDED MARCH 31, 2004, THE FUND'S CLASS A HARES RETURNED 23.83% WITHOUT SALES CHARGE. o THE FUND'S RETURN WAS HIGHER THAN THE RETURN OF ITS BENCHMARKS, THE RUSSELL 2000 GROWTH INDEX AND THE RUSSELL 2000 INDEX. IT ALSO OUTPACED ITS PEER GROUP, THE MORNINGSTAR(R) SMALL GROWTH CATEGORY. o STRONG STOCK SELECTION, PARTICULARLY IN THE HEALTH CARE, TECHNOLOGY AND CONSUMER DISCRETIONARY SECTORS, FUELED PERFORMANCE. THE FUND ALSO BENEFITED FROM ITS FOCUS ON HIGHER QUALITY STOCKS, WHICH MOVED BACK INTO INVESTOR FAVOR DURING THE PERIOD. [Three up arrows] CLASS A RUSSELL 2000 RUSSELL 2000 SHARES GROWTH INDEX INDEX 23.83% 18.97% 21.69% Objective Seeks capital appreciation. Total net assets $425.5 million NET ASSET VALUE PER SHARE AS OF 03/31/04 ($) Class A 17.46 Class B 16.36 Class C 16.32 Class G 16.33 Class T 17.45 Class Z 18.43 PORTFOLIO MANAGER'S REPORT______________________________________________________ Columbia Small Company Equity Fund For the six-month period ended March 31, 2004, class A shares of Columbia Small Company Equity Fund returned 23.83% without sales charge. The fund was ahead of the 18.97% return of its primary benchmark, the Russell 2000 Growth Index. Fund performance was also better than its secondary benchmark. The Russell 2000 Index gained 21.69% during this period. In addition, the fund outpaced the Morningstar(R) Small Growth Category average, which returned 18.11%.1 Strong stock selection, particularly in the health care, technology and consumer discretionary sectors, drove returns. The fund benefited as small-cap stocks posted sharp gains and higher quality names moved back into investor favor. SEARCH FOR QUALITY, GROWTH AND INNOVATION Our emphasis was on companies with healthy balance sheets, attractive business models and strong management teams that were focused on increasing long-term earnings and revenues in a strategic manner. As growth investors in the small-cap area, we also looked for innovation, which we found primarily in three sectors: health care, technology and consumer discretionary. In the health care sector, we emphasized biotechnology, pharmaceutical and medical devices companies. Nektar Therapeutics produced sharp gains following the release of positive test data. This pharmaceutical company is pioneering inhaled insulin for diabetics. Salix Pharmaceuticals, a specialty pharmaceutical company developing new treatments for gastric illnesses, also rallied sharply. The fund's technology stocks included semiconductor and semiconductor equipment companies as well as storage and software names. We targeted companies with niche products and avoided commodity-type names that depend on the economy to generate earnings growth. Silicon Image took off during the period as investors began to recognize its growth potential. This semiconductor company has a new type of digital connectivity technology called HDMI that is just starting to be designed into products. Silicon Storage Technology and Monolithic System Technology were also standouts. Silicon Storage is a leader in a kind of memory known as low-density flash. We sold our investment in Monolithic, which makes memory technologies, following a generous buy-out offer in February. 1 (C)2004, Morningstar, Inc. All rights reserved. The information contained herein is the proprietary information of Morningstar, Inc., may not be copied or redistributed for any purpose and may only be used for noncommercial, personal purposes. The information contained herein is not represented or warranted to be accurate, correct, complete or timely. Morningstar, Inc. shall not be responsible for investment decisions, damages or other losses resulting from the use of this information. Past performance is no guarantee of future performance. Morningstar, Inc. has not granted consent for it to be considered or deemed an "expert" under the Securities Act of 1933. 21 TOP 5 SECTORS AS OF 03/31/04 (%) Information technology 29.9 Health care 23.5 Consumer discretionary 16.8 Industrials 12.0 Financials 10.2 TOP 10 HOLDINGS AS OF 03/31/04 (%) Jarden 2.4 Station Casinos 2.0 Silicon Storage Technology 1.3 Entegris 1.3 Investors Financial Services 1.3 Cost Plus 1.3 Salix Pharmaceuticals 1.3 Sharper Image 1.2 Artisan Components 1.2 PETCO Animal Supplies 1.2 HOLDINGS DISCUSSED IN THIS REPORT AS OF 03/31/04 (%) Nektar Therapeutics 1.1 Salix Pharmaceuticals 1.3 Silicon Image 1.0 Silicon Storage Technology 1.3 Station Casinos 2.0 Jarden 2.4 Netopia 0.6 Cray 0.5 Bombay Company 0.8 PETCO Animal Supplies 1.2 Your fund is actively managed and the composition of its portfolio will change over time. Information provided is calculated as a percentage of net assets. ________________________________________________________________________________ Columbia Small Company Equity Fund In the consumer discretionary sector, gaming stocks were particularly strong performers. They benefited as financially strapped states looked for alternative revenue sources. Station Casinos posted outstanding gains. This company runs casinos for local residents in Las Vegas and also partners with Native Americans to build new casinos in other locations. Jarden, a diversified consumer products company, also rallied sharply as investors began to recognize the company's strong marketing abilities. Media stocks added positively to performance amid expectations that they will benefit from the upcoming Presidential election and summer Olympics. LONG-TERM VIEW, RISK MANAGEMENT APPROACH We had only small investments in many of our weakest performers. Netopia, which makes smart modems for DSL, tumbled, as did Cray, the super computer company. Both stocks came down as investors focused on the near term, but we continued to own them because we believed their prospects remained strong over the long term. Bombay, a furniture retailer, also fell. Its management undertook several new initiatives that resulted in a short-term revenue shortfall. A sizable investment in PETCO Animal Supplies hurt performance as increased competition put pressure on the stock. OPPORTUNITIES AHEAD Looking ahead, we believe that small-cap stocks remain reasonably valued, given their strong earnings growth prospects. We also think the sector offers ample opportunities for selective investors. While small-cap stocks stand to benefit from further economic growth, we plan to maintain our focus on higher quality companies that can expand their businesses and profits independent of the economic environment. Paul Berlinguet has managed Columbia Small Company Equity Fund since November 2003 and has been with the advisor since October 2003. /s/ Paul Berlinguet An investment in the fund offers the potential for long-term growth, but also involves certain risks, including stock market fluctuations due to economic and business developments. Investing in small-cap stocks may present special risks, including possible illiquidity and greater price volatility than stocks of larger, more established companies. 22 FINANCIAL STATEMENTS____________________________________________________________ March 31, 2004 Columbia Equity Funds A GUIDE TO UNDERSTANDING YOUR FUND'S FINANCIAL STATEMENTS ------------------------------------------ INVESTMENT PORTFOLIO The investment portfolio details all of the fund's holdings and their market value as of the last day of the reporting period. Portfolio holdings are organized by type of asset, industry, country or geographic region (if applicable) to demonstrate areas of concentration and diversification. ------------------------------------------ STATEMENT OF ASSETS AND LIABILITIES This statement details the fund's assets, liabilities, net assets and share price for each share class as of the last day of the reporting period. Net assets are calculated by subtracting all the fund's liabilities (including any unpaid expenses) from the total of the fund's investment and non-investment assets. The share price for each class is calculated by dividing net assets for that class by the number of shares outstanding in that class as of the last day of the reporting period. ------------------------------------------ STATEMENT OF OPERATIONS This statement details income earned by the fund and the expenses accrued by the fund during the reporting period. The Statement of Operations also shows any net gain or loss the fund realized on the sales of its holdings during the period, as well as any unrealized gains or losses recognized over the period. The total of these results represents the fund's net increase or decrease in net assets from operations. ------------------------------------------ STATEMENT OF CHANGES IN NET ASSETS This statement demonstrates how the fund's net assets were affected by its operating results, distributions to shareholders and shareholder transactions (e.g., subscriptions, redemptions and dividend reinvestments) during the reporting period. The Statement of Changes in Net Assets also details changes in the number of shares outstanding. ------------------------------------------ NOTES TO FINANCIAL STATEMENTS These notes disclose the organizational background of the fund, its significant accounting policies (including those surrounding security valuation, income recognition and distributions to shareholders), federal tax information, fees and compensation paid to affiliates and significant risks and contingencies. ------------------------------------------ FINANCIAL HIGHLIGHTS The financial highlights demonstrate how the fund's net asset value per share was affected by the fund's operating results. The financial highlights table also discloses the classes' performance and certain key ratios (e.g., class expenses and net investment income as a percentage of average net assets). 23 INVESTMENT PORTFOLIO____________________________________________________________ March 31, 2004 (Unaudited) Columbia Asset Allocation Fund Shares Value ($) ------------ ------------ COMMON STOCKS - 65.5% CONSUMER DISCRETIONARY - 8.4% AUTO COMPONENTS - 0.3% Autoliv, Inc. 3,830 157,030 BorgWarner, Inc. 800 67,864 Continental AG 8,000 315,230 Dana Corp. 5,200 103,272 Gentex Corp. 5,840 253,339 Johnson Controls, Inc. 2,800 165,620 Lear Corp. 3,300 204,468 Modine Manufacturing Co. 1,200 31,272 Standard Motor Products, Inc. 2,900 45,472 Superior Industries International 2,000 70,880 Visteon Corp. 1 10 ------------ Auto Components Total 1,414,457 AUTOMOBILES - 0.5% General Motors Corp. 17,202 810,214 Nissan Motor Co., Ltd. 23,000 256,940 Renault SA 6,232 432,154 Toyota Motor Corp. 16,400 610,174 ------------ Automobiles Total 2,109,482 HOTELS, RESTAURANTS & LEISURE - 1.2% Accor SA 8,070 327,423 Alliance Gaming Corp. (a) 4,500 144,585 Bally Total Fitness Holding Corp. (a) 5,300 31,058 Bob Evans Farms, Inc. 1,824 59,171 Brinker International, Inc. (a) 4,700 178,271 Buca, Inc. (a) 200 1,250 Compass Group PLC 58,880 389,188 Darden Restaurants, Inc. 2,600 64,454 Dave & Buster's, Inc. (a) 2,200 33,110 Gaylord Entertainment Co. (a) 3,700 114,330 Harrah's Entertainment, Inc. 8,989 493,406 Hilton Hotels Corp. 10,070 163,638 Intercontinental Hotels Group PLC 43,135 395,265 International Game Technology, Inc. 1,600 71,936 Landry's Restaurants, Inc. 2,800 83,524 Lone Star Steakhouse & Saloon 3,700 108,003 Marcus Corp. 3,900 67,665 Marriott International, Inc., Class A 1,500 63,825 MGM Mirage, Inc. (a) 1,740 78,892 Outback Steakhouse, Inc. 1,370 66,719 Pinnacle Entertainment, Inc. (a) 3,100 42,780 Prime Hospitality Corp. (a) 4,500 51,210 Scientific Games Corp., Class A (a) 11,900 222,768 Six Flags, Inc. (a) 12,800 100,480 Starwood Hotels & Resorts Worldwide, Inc. 1,270 51,435 Station Casinos, Inc. 6,200 273,854 Wendy's International, Inc. 41,869 1,703,650 Yum! Brands, Inc. (a) 12,860 488,551 ------------ Hotels, Restaurants & Leisure Total 5,870,441 HOUSEHOLD DURABLES - 0.5% American Greetings Corp., Class A (a) 2,100 47,817 CSS Industries, Inc. 1,700 56,525 Shares Value ($) ------------ ------------ Garmin Ltd. 4,370 186,643 Interface, Inc., Class A (a) 5,700 45,315 Kimball International, Inc., Class B 3,700 57,979 Koninklijke (Royal) Philips Electronics NV 27,590 798,896 Land and Houses Public Co., Ltd., NVDR 885,900 261,853 Matsushita Electric Industrial Co., Ltd., ADR 57,000 878,899 Newell Rubbermaid, Inc. 5,200 120,640 Russ Berrie & Co., Inc. 1,100 38,500 ------------ Household Durables Total 2,493,067 INTERNET & CATALOG RETAIL - 0.2% eBay, Inc. (a) 11,400 790,362 ------------ Internet & Catalog Retail Total 790,362 LEISURE EQUIPMENT & PRODUCTS - 0.2% Action Performance Companies, Inc. 4,200 64,134 Brunswick Corp. 2,220 90,643 Jakks Pacific, Inc. (a) 3,600 54,000 M&F Worldwide Corp. (a) 2,800 38,332 Mattel, Inc. 30,468 561,830 ------------ Leisure Equipment & Products Total 808,939 MEDIA - 2.3% Alliance Atlantis Communications, Inc., Class B (a) 5,600 106,400 Catalina Marketing Corp. (a) 2,500 48,475 Clear Channel Communications, Inc. 32,859 1,391,579 Cumulus Media, Inc., Class A (a) 3,900 77,961 Dentsu, Inc. 39 118,924 Dentsu, Inc. (a) 39 115,932 Gannett Co., Inc. 6,157 542,678 JC Decaux SA (a) 23,170 518,651 Journal Communications, Inc., Class A 4,000 80,000 Knight-Ridder, Inc. 900 65,925 Liberty Corp. 1,600 74,032 Lin TV Corp., Class A (a) 6,200 147,622 McGraw-Hill Companies, Inc. 15,672 1,193,266 Media General, Inc., Class A 1,000 67,280 Mediacom Communications Corp. (a) 6,500 52,130 New York Times Co., Class A 2,700 119,340 News Corp., Ltd. 29,600 266,834 Omnicom Group, Inc. 11,300 906,825 Pearson PLC 35,520 405,056 Radio One, Inc., Class D (a) 4,800 88,800 Reuters Group PLC 43,400 309,672 Sinclair Broadcast Group, Inc., Class A (a) 13,400 167,500 Time Warner, Inc. (a) 69,885 1,178,261 TiVo, Inc. (a) 9,500 84,455 Univision Communications, Inc., Class A (a) 6,570 216,876 United Business Media PLC 21,200 193,483 Viacom, Inc., Class A 12,417 490,968 Viacom, Inc., Class B 24,660 966,919 Walt Disney Co. 15,200 379,848 WPP Group PLC 25,000 253,746 XM Satellite Radio Holdings, Inc., Class A (a) 10,805 302,540 ------------ Media Total 10,931,978 See Accompanying Notes to Financial Statements. 24 ________________________________________________________________________________ March 31, 2004 (Unaudited) Columbia Asset Allocation Fund Shares Value ($) ------------ ------------ COMMON STOCKS - (CONTINUED) CONSUMER DISCRETIONARY - (continued) MULTILINE RETAIL - 0.7% Dollar Tree Stores, Inc. (a) 3,660 113,057 Federated Department Stores, Inc. 6,600 356,730 Kohl's Corp. (a) 22,800 1,101,924 Seiyu Ltd. (a) 43,000 170,293 ShopKo Stores, Inc. (a) 2,500 36,550 Takashimaya Co., Ltd. 29,000 324,246 Target Corp. 23,900 1,076,456 ------------ Multiline Retail Total 3,179,256 SPECIALTY RETAIL - 2.2% Aoyama Trading Co., Ltd. 11,900 292,693 Bed Bath & Beyond, Inc. (a) 32,175 1,343,628 Best Buy Co., Inc. 18,300 946,476 Boise Cascade Corp. 2,800 97,020 Bombay Co., Inc. (a) 14,100 110,685 Borders Group, Inc. 6,200 147,188 Building Material Holding Corp. 1,700 29,835 Chico's FAS, Inc. (a) 19,290 895,056 CompuCom Systems, Inc. (a) 9,100 49,959 Cost Plus, Inc. (a) 3,900 162,825 GameStop Corp., Class A (a) 3,300 59,466 Goody's Family Clothing, Inc. 4,800 68,496 Home Depot, Inc. 26,200 978,832 Lowe's Companies, Inc. 28,255 1,585,953 Monro Muffler, Inc. (a) 3,700 92,463 Movie Gallery, Inc. 1,200 23,508 Nitori Co., Ltd. 4,250 285,683 Office Depot, Inc. (a) 63,577 1,196,519 Party City Corp. (a) 4,000 59,560 PETCO Animal Supplies, Inc. (a) 4,800 135,264 Rent-Way, Inc. (a) 7,900 69,520 Ross Stores, Inc. 3,800 116,318 Sharper Image Corp. (a) 4,900 159,642 Staples, Inc. 40,270 1,022,455 TBC Corp. (a) 1,000 29,370 TJX Companies, Inc. 9,700 238,232 USS Co., Ltd. 2,200 182,692 Williams-Sonoma, Inc. (a) 5,350 182,970 ------------ Specialty Retail Total 10,562,308 TEXTILES, APPAREL & LUXURY GOODS - 0.3% Coach, Inc. (a) 19,760 809,962 Delta Apparel, Inc. 1,200 23,880 Hampshire Group Ltd. (a) 1,900 57,912 Kellwood Co. 2,500 98,125 Puma AG 1,600 353,034 Russell Corp. 2,800 51,128 Sanyo Shokai Ltd. 15,000 114,350 Stride Rite Corp. 3,400 36,074 Tandy Brands Accessories, Inc. 300 3,909 Wolverine World Wide, Inc. 3,200 77,216 ------------ Textiles, Apparel & Luxury Goods Total 1,625,590 ------------ CONSUMER DISCRETIONARY TOTAL 39,785,880 Shares Value ($) ------------ ------------ CONSUMER STAPLES - 5.3% BEVERAGES - 1.2% Coca-Cola Co. 34,600 1,740,380 Diageo PLC 20,800 271,901 Pepsi Bottling Group, Inc. 4,800 142,800 PepsiCo, Inc. 62,489 3,365,033 Pernod-Ricard SA 2,625 319,802 ------------ Beverages Total 5,839,916 FOOD & STAPLES RETAILING - 1.0% BJ's Wholesale Club, Inc. (a) 1,500 38,175 Casino Guichard Perrachon SA 2,700 259,330 Costco Wholesale Corp. (a) 35,269 1,324,704 NeighborCare, Inc. (a) 3,100 75,175 Performance Food Group Co. (a) 1,900 65,265 Sysco Corp. 19,330 754,836 Wal-Mart Stores, Inc. 33,240 1,984,096 Winn-Dixie Stores, Inc. 3,800 28,880 ------------ Food & Staples Retailing Total 4,530,461 FOOD PRODUCTS - 1.0% American Italian Pasta Co., Class A 2,300 91,839 Bunge Ltd. 17,700 711,894 Central Garden and Pet Co. (a) 1,500 54,000 ConAgra Foods, Inc. 43,511 1,172,186 Corn Products International, Inc. 2,800 112,000 Dean Foods Co. (a) 11,720 391,448 Hormel Foods Corp. 2,300 67,459 John B. Sanfilippo & Son, Inc. (a) 900 33,030 Kraft Foods, Inc. 33,556 1,074,128 Nestle SA, Registered Shares 3,224 822,520 Omega Protein Corp. (a) 3,800 27,626 Thai Union Frozen Products Public Co., Ltd. 124,200 75,321 ------------ Food Products Total 4,633,451 HOUSEHOLD PRODUCTS - 1.2% Clorox Co. 22,884 1,119,256 Kimberly-Clark Corp. 20,729 1,308,000 Procter & Gamble Co. 24,808 2,601,863 Reckitt Benckiser PLC 35,300 875,385 ------------ Household Products Total 5,904,504 PERSONAL PRODUCTS - 0.4% Alberto-Culver Co., Inc., Class B 32,325 1,418,098 Avon Products, Inc. 1,900 144,153 Oriflame Cosmetics SA (a) 4,800 135,261 ------------ Personal Products Total 1,697,512 TOBACCO - 0.5% Altria Group, Inc. 37,047 2,017,209 Imperial Tobacco Group PLC 15,475 338,390 ------------ Tobacco Total 2,355,599 ------------ CONSUMER STAPLES TOTAL 24,961,443 See Accompanying Notes to Financial Statements. 25 ________________________________________________________________________________ March 31, 2004 (Unaudited) Columbia Asset Allocation Fund Shares Value ($) ------------ ------------ COMMON STOCKS - (CONTINUED) ENERGY - 4.6% ENERGY EQUIPMENT & SERVICES - 0.9% BJ Services Co. (a) 5,370 232,360 Halliburton Co. 69,629 2,116,025 Key Energy Services, Inc. (a) 7,400 81,400 Lufkin Industries, Inc. 2,200 68,970 Maverick Tube Corp. (a) 4,100 96,555 Nabors Industries Ltd. (a) 2,040 93,330 National-Oilwell, Inc. (a) 5,400 152,712 Noble Corp. (a) 5,940 228,215 Patterson-UTI Energy, Inc. (a) 3,480 123,227 Schlumberger Ltd. 6,130 391,400 Transocean, Inc. (a) 3,100 86,459 Unit Corp. (a) 3,400 93,228 Universal Compression Holdings, Inc. (a) 2,000 65,800 Weatherford International Ltd. (a) 1,500 63,045 Willbros Group, Inc. (a) 5,900 88,559 ------------ Energy Equipment & Services Total 3,981,285 OIL & GAS - 3.7% Amerada Hess Corp. 2,800 182,784 Apache Corp. 2,394 103,349 BP PLC, ADR 78,466 4,017,459 Carrizo Oil & Gas, Inc. (a) 6,000 43,500 Cimarex Energy Co. (a) 1,000 28,900 ConocoPhillips 35,404 2,471,553 EnCana Corp. 16,400 708,436 ENI S.p.A. 67,900 1,367,004 Exxon Mobil Corp. 75,220 3,128,400 Giant Industries, Inc. (a) 1,000 20,700 Harvest Natural Resources, Inc. (a) 4,800 70,128 Marathon Oil Corp. 51,823 1,744,880 Murphy Oil Corp. 2,040 128,459 Norsk Hydro ASA 3,800 239,367 Occidental Petroleum Corp. 1,900 87,495 Patina Oil & Gas Corp. 4,300 112,875 PTT Public Co., Ltd. 113,300 404,179 Royal Dutch Petroleum Co., N.Y. Registered Shares 22,268 1,059,511 Stone Energy Corp. (a) 1,900 93,974 Tom Brown, Inc. (a) 1,900 71,440 Total SA 3,640 669,220 Western Gas Resources, Inc. 2,800 142,380 Westport Resources Corp. (a) 2,900 95,671 Whiting Petroleum Corp. (a) 2,900 68,411 XTO Energy, Inc. 21,211 535,372 ------------ Oil & Gas Total 17,595,447 ------------ ENERGY TOTAL 21,576,732 FINANCIALS - 13.4% CAPITAL MARKETS - 2.0% Bank of New York Co., Inc. 47,615 1,499,872 Bear Stearns Companies, Inc. 1,600 140,288 Shares Value ($) ------------ ------------ Goldman Sachs Group, Inc. 7,682 801,617 Investors Financial Services Corp. 4,113 169,949 Janus Capital Group, Inc. 12,400 203,112 Jefferies Group, Inc. 3,800 134,254 J.P. Morgan Chase & Co. 41,717 1,750,028 LaBranche & Co., Inc. 3,100 34,751 Lehman Brothers Holdings, Inc. 1,800 149,166 Merrill Lynch & Co., Inc. 39,533 2,354,585 Morgan Stanley 22,242 1,274,467 State Street Corp. 14,777 770,325 ------------ Capital Markets Total 9,282,414 COMMERCIAL BANKS - 3.7% Alpha Bank A.E. 9,800 301,738 Anglo Irish Bank Corp., PLC 15,700 251,165 Bancfirst Corp. 200 11,088 Bancorpsouth, Inc. 2,600 56,888 Banco Popular di Verona E Novara 22,900 373,113 Banco Santander Central Hispano SA 35,400 385,535 BancTrust Financial Group, Inc. 1,473 25,778 Bank of Granite Corp. 2,500 51,675 Bank One Corp. 34,095 1,858,859 Banknorth Group, Inc. 4,700 159,988 Barclays PLC 73,930 653,258 Boston Private Financial Holdings, Inc. 3,700 103,600 Bryn Mawr Bank Corp. 3,000 68,700 Capitol Bancorp Ltd. 1,100 29,810 Charter One Financial, Inc. 23,900 845,104 Chemical Financial Corp. 2,445 87,702 Chinatrust Financial Holdings (a) 137,000 164,234 Chittenden Corp. 2,800 92,400 City National Corp. 2,400 143,760 Community Trust Bancorp, Inc. 1,470 48,510 Corus Bankshares, Inc. 2,600 104,754 Credit Agricole SA 25,140 657,417 Credit Suisse Group 10,850 376,221 Cullen/Frost Bankers, Inc. 1,600 68,416 East-West Bancorp, Inc. 2,400 134,400 Erste Bank der oesterreichischen Sparkassen AG 2,200 329,751 Fifth Third Bancorp 10,365 573,910 First Citizens BancShares, Inc., Class A 300 36,900 First Financial Bankshares, Inc. 1,250 50,088 Greater Bay Bancorp 2,000 58,500 Hancock Holding Co. 1,000 30,960 Hansabank Ltd. 11,055 350,990 Kookmin Bank, ADR 10,300 416,738 MainSource Financial Group, Inc. 965 34,566 MASSBANK Corp. 800 31,816 Mercantile Bank Corp. 2,900 102,950 Merchants Bancshares, Inc. 2,000 57,020 Mid-State Bancshares 3,600 85,140 National City Corp. 20,549 731,133 North Fork Bancorporation, Inc. 4,000 169,280 Northrim BanCorp, Inc. 1,800 46,080 Omega Financial Corp. 400 14,625 Prosperity Bancshares, Inc. 4,300 101,308 See Accompanying Notes to Financial Statements. 26 ________________________________________________________________________________ March 31, 2004 (Unaudited) Columbia Asset Allocation Fund Shares Value ($) ------------ ------------ COMMON STOCKS - (CONTINUED) FINANCIALS - (CONTINUED) COMMERCIAL BANKS - (CONTINUED) Riggs National Corp. 3,900 67,119 Royal Bank of Scotland Group PLC 27,887 852,488 Siam Commercial Bank Public Co., Ltd. 401,100 454,808 Simmons First National Corp., Class A 1,800 49,590 Societe Generale 3,000 256,580 Standard Chartered Ltd., PLC 16,680 280,167 Sterling Bancshares, Inc. 2,900 38,831 S.Y. Bancorp, Inc. 400 8,960 Trico Bancshares 2,500 93,450 UFJ Holdings 139 882,370 UMB Financial Corp. 200 10,140 U.S. Bancorp 79,735 2,204,673 Wells Fargo & Co. 37,559 2,128,469 Whitney Holding Corp. 1,400 58,436 ------------ Commercial Banks Total 17,661,949 CONSUMER FINANCE - 0.5% American Express Co. 9,600 497,760 Cash America International, Inc. 4,600 106,030 MBNA Corp. 67,653 1,869,252 ------------ Consumer Finance Total 2,473,042 DIVERSIFIED FINANCIAL SERVICES - 1.5% Citigroup, Inc. 113,661 5,876,274 Commercial Capital BanCorp, Inc. (a) 5,800 132,936 ING Groep NV 25,720 565,920 Metris Companies, Inc. 7,500 60,300 MFC Bancorp Ltd. 6,100 153,049 MTC Technologies, Inc. (a) 4,200 105,462 National Financial Partners Corp. 2,000 64,500 Nomura Holdings, Inc. 17,000 308,913 ------------ Diversified Financial Services Total 7,267,354 INSURANCE - 3.0% Aflac, Inc. 14,982 601,377 Allianz AG, Registered Shares 4,920 536,494 Ambac Financial Group, Inc. 18,799 1,386,990 American International Group, Inc. 38,512 2,747,831 AmerUs Group Co. 1,000 40,350 Berkshire Hathaway, Inc., Class A (a) 11 1,026,300 Cincinnati Financial Corp. 1,400 60,830 CNA Surety Corp. (a) 2,900 32,045 Commerce Group, Inc. 1,200 57,600 Daido Life Insurance Ltd. 55 224,145 Delphi Financial Group, Inc., Class A 2,550 107,151 Harleysville Group, Inc. 2,600 48,412 Horace Mann Educators Corp. 3,000 47,160 Infinity Property & Casualty Corp. 4,600 144,578 Irish Life & Permanent PLC 19,200 315,191 Kansas City Life Insurance Co. 200 8,558 Lincoln National Corp. 19,388 917,440 Loews Corp. 1,500 88,590 Millea Holdings, Inc. 70 1,087,405 Mitsui Sumitomo Insurance Co., Ltd. 39,000 414,364 Shares Value ($) ------------ ------------ Nationwide Financial Services, Inc., Class A 2,300 82,915 Navigators Group, Inc. (a) 1,200 34,536 Old Republic International Corp. 1,050 25,788 Philadelphia Consolidated Holding Co. (a) 2,200 127,600 Phoenix Companies, Inc. 6,200 83,142 Progressive Corp. 5,500 481,800 RLI Corp. 1,800 69,480 St. Paul Companies, Inc. 2,100 84,021 State Auto Financial Corp. 1,900 49,039 Travelers Property Casualty Corp., Class B 63,213 1,091,689 Universal American Financial Corp. (a) 2,600 31,200 Willis Group Holdings Ltd. 29,686 1,104,319 XL Capital Ltd., Class A 13,991 1,063,876 ------------ Insurance Total 14,222,216 REAL ESTATE - 1.9% Alexandria Real Estate Equities, Inc., REIT 3,230 203,490 American Financial Realty Trust, REIT 3,890 65,936 Apartment Investment & Management Co., Class A, REIT 1,580 49,122 Archstone-Smith Trust, REIT 20,771 612,952 AvalonBay Communities, Inc., REIT 1,580 84,656 Boston Properties, Inc., REIT 1,650 89,612 Boykin Lodging Co., REIT 5,100 47,328 Brookfield Properties Co., REIT 1,920 59,731 CarrAmerica Realty Corp., REIT 1,310 44,409 CenterPoint Properties Trust, REIT 1,150 94,875 Chelsea Property Group, Inc., REIT 1,000 62,940 Corporate Office Properties Trust 1,710 42,750 Cousins Properties, Inc., REIT 5,900 193,461 Duke Realty Corp., REIT 5,150 178,808 Eastgroup Properties, Inc., REIT 1,900 67,450 Equity Office Properties Trust, REIT 4,280 123,649 Equity One, Inc., REIT 2,900 55,738 Equity Residential, REIT 2,960 88,356 First Industrial Realty Trust, Inc., REIT 1,110 43,845 First Potomac Realty Trust, REIT 1,200 25,080 General Growth Properties, Inc., REIT 8,820 310,023 Getty Realty Corp., REIT 2,000 53,140 Gladstone Commercial Corp., REIT 2,400 41,040 iStar Financial, Inc., REIT 5,400 228,420 Keystone Property Trust Corp., REIT 2,000 48,620 Kimco Realty Corp., REIT 14,194 723,610 La Quinta Corp., REIT (a) 8,380 63,185 Liberty Property Trust, REIT 3,620 162,900 Manufactured Home Communities, Inc., REIT 880 31,064 Mid-America Apartment Communities, Inc., REIT 2,000 74,260 Mitsubishi Estate Co., REIT 86,000 1,163,600 Nationwide Health Properties, Inc., REIT 3,200 71,264 Newcastle Investment Corp., REIT 3,000 101,100 Pan Pacific Retail Properties, Inc., REIT 1,300 67,730 ProLogis, REIT 6,580 236,025 See Accompanying Notes to Financial Statements. 27 ________________________________________________________________________________ March 31, 2004 (Unaudited) Columbia Asset Allocation Fund Shares Value ($) ------------ ------------ COMMON STOCKS - (CONTINUED) FINANCIALS - (CONTINUED) REAL ESTATE - (CONTINUED) PS Business Parks, Inc., REIT 2,100 97,335 Public Storage, Inc., REIT 2,760 134,302 Regency Centers Corp., REIT 4,070 190,191 Rouse Co., REIT 3,680 197,248 Shurgard Storage Centers, Inc. 800 31,920 Simon Property Group, Inc., REIT 5,380 314,407 SL Green Realty Corp., REIT 1,730 82,521 St. Joe Co., REIT 3,240 131,836 Sumitomo Realty & Development Co., Ltd. 31,000 402,196 Sun Hung Kai Properties Ltd. 85,000 777,155 Tanger Factory Outlet Centers, Inc., REIT 1,400 63,448 United Dominion Realty Trust, Inc., REIT 3,000 58,860 Universal Health Realty Income Trust, REIT 1,300 43,810 Urstadt Biddle Properties, Inc., Class A, REIT 2,900 47,850 Vornado Realty Trust, REIT 11,131 673,203 ------------ Real Estate Total 8,856,451 THRIFTS & MORTGAGE FINANCE - 0.8% Countrywide Financial Corp. 9,544 915,270 Fannie Mae 6,600 490,710 Freddie Mac 17,660 1,043,000 Golden West Financial Corp. 3,200 358,240 Greenpoint Financial Corp. 4,050 177,026 PMI Group, Inc. 4,600 171,856 Radian Group, Inc. 3,300 140,580 Sovereign Bancorp, Inc. 9,300 199,206 Webster Financial Corp. 2,500 126,775 ------------ Thrifts & Mortgage Finance Total 3,622,663 ------------ FINANCIALS TOTAL 63,386,089 HEALTH CARE - 7.7% BIOTECHNOLOGY - 1.1% Affymetrix, Inc. (a) 1,900 64,125 Amgen, Inc. (a) 34,330 1,996,976 Amylin Pharmaceuticals, Inc. (a) 6,394 151,474 BioMarin Pharmaceuticals, Inc. (a) 11,100 83,472 Ciphergen Biosystems, Inc. (a) 7,100 59,143 Cytogen Corp. (a) 7,600 93,328 Exact Sciences Corp. (a) 7,900 61,383 Gilead Sciences, Inc. (a) 21,865 1,219,411 ICOS Corp. (a) 4,100 151,905 Ilex Oncology, Inc. (a) 4,900 117,208 Martek Biosciences Corp. (a) 8,100 461,700 Neopharm, Inc. (a) 3,210 60,220 Neurocrine Biosciences, Inc. (a) 2,000 118,200 Protein Design Labs, Inc. (a) 4,800 114,336 Shares Value ($) ------------ ------------ Serologicals Corp. (a) 1,600 32,640 Telik, Inc. (a) 4,900 131,516 ------------ Biotechnology Total 4,917,037 HEALTH CARE EQUIPMENT & SUPPLIES - 2.1% Alcon, Inc. 20,660 1,307,778 Analogic Corp. 1,300 59,137 Biomet, Inc. 3,700 141,932 Bio-Rad Laboratories, Inc., Class A (a) 2,300 129,651 Boston Scientific Corp. (a) 39,330 1,666,805 Cardiac Science, Inc. (a) 18,300 79,971 Conceptus, Inc. (a) 6,900 82,248 Cytyc Corp. (a) 6,200 137,950 Integra LifeSciences Holdings Corp. (a) 3,500 107,170 Kinetic Concepts, Inc. (a) 2,500 112,125 LCA-Vision, Inc. (a) 3,900 91,533 Medical Action Industries, Inc. (a) 7,500 153,300 Millipore Corp. (a) 2,700 138,726 Nobel Biocare Holdings AG 1,000 137,435 Ocular Sciences, Inc. (a) 400 11,660 Palomar Medical Technologies, Inc. (a) 2,200 39,688 Phonak Holdings AG 6,900 166,226 ResMed, Inc. (a) 2,100 94,899 Smith & Nephew PLC (a) 97,040 958,103 Sola International, Inc. (a) 1,800 41,850 SonoSite, Inc. (a) 4,600 98,118 St. Jude Medical, Inc. (a) 16,960 1,222,816 SurModics, Inc. (a) 3,200 63,712 Varian Medical Systems, Inc. (a) 18,540 1,600,187 Zimmer Holdings, Inc. (a) 15,650 1,154,657 ------------ Health Care Equipment & Supplies Total 9,797,677 HEALTH CARE PROVIDERS & SERVICES - 1.4% Advisory Board Co. (a) 3,300 120,615 Aetna, Inc. 24,190 2,170,327 America Service Group, Inc. (a) 2,259 77,484 Anthem, Inc. (a) 2,280 206,659 Capital Senior Living Corp. (a) 1,500 9,285 Caremark Rx, Inc. (a) 67,820 2,255,015 Chronimed, Inc. (a) 3,900 30,303 Community Health Systems, Inc. (a) 3,520 97,962 Cross Country Healthcare, Inc. (a) 2,500 41,625 DaVita, Inc. (a) 4,530 216,308 First Health Group Corp. (a) 7,400 161,764 Genesis HealthCare Corp. (a) 1,550 37,742 HCA, Inc. 2,900 117,798 Hooper Holmes, Inc. 4,300 26,832 Kindred Healthcare, Inc. (a) 1,700 85,510 LifePoint Hospitals, Inc. (a) 2,700 87,318 Manor Care, Inc. 4,000 141,160 McKesson Corp. 1,000 30,090 Orthodontic Centers of America, Inc. (a) 5,900 46,610 Parexel International Corp. (a) 4,100 73,267 Pediatrix Medical Group, Inc. (a) 1,400 88,200 Province Healthcare Co. (a) 2,000 31,800 Stewart Enterprises, Inc., Class A (a) 9,400 68,338 UnitedHealth Group, Inc. 2,310 148,856 U.S. Physical Therapy, Inc. (a) 2,900 40,020 See Accompanying Notes to Financial Statements. 28 ________________________________________________________________________________ March 31, 2004 (Unaudited) Columbia Asset Allocation Fund Shares Value ($) ------------ ------------ COMMON STOCKS - (CONTINUED) HEALTH CARE - (CONTINUED) HEALTH CARE PROVIDERS & SERVICES - (CONTINUED) WellPoint Health Networks (a) 2,410 274,065 ------------ Health Care Providers & Services Total 6,684,953 PHARMACEUTICALS - 3.1% Advancis Pharmaceutical Corp. (a) 9,500 86,830 AstraZeneca PLC 8,700 404,705 Atrix Labs, Inc. (a) 3,000 76,500 Barr Pharmaceuticals, Inc. (a) 3,375 154,912 Bristol-Myers Squibb Co. 18,310 443,651 Caraco Pharmaceutical Laboratories Ltd. (a) 2,600 26,416 Chugai Pharmaceutical Co. 40,200 638,358 DepoMed, Inc. (a) 12,400 97,092 DOV Pharmaceutical, Inc. (a) 7,000 108,640 Dr. Reddy's Laboratories Ltd., ADR 11,700 280,215 Elan Corp., PLC, ADR (a) 7,300 150,526 Endo Pharmaceuticals Holdings, Inc. (a) 4,200 102,564 GlaxoSmithKline PLC 47,230 930,018 IVAX Corp. (a) 5,740 130,700 Johnson & Johnson Co. 9,749 494,469 Medicis Pharmaceutical Corp., Class A 4,900 196,000 Merck & Co., Inc. 11,633 514,062 Nektar Therapeutics (a) 6,100 131,638 Novartis AG, Registered Shares 12,180 517,581 Noven Pharmaceuticals, Inc. (a) 5,700 122,379 Pfizer, Inc. 163,209 5,720,475 Renovis, Inc. (a) 6,800 69,020 Salix Pharmaceuticals Ltd. (a) 6,000 174,120 Takeda Chemical Industries Ltd. 7,600 338,150 Taro Pharmaceuticals Industries Ltd. (a) 2,400 139,176 Teva Pharmaceutical Industries Ltd., ADR 42,670 2,705,705 ------------ Pharmaceuticals Total 14,753,902 ------------ HEALTH CARE TOTAL 36,153,569 INDUSTRIALS - 7.3% AEROSPACE & DEFENSE - 1.2% AAR Corp. (a) 4,154 51,011 Alliant Techsystems, Inc. (a) 1,500 81,600 Armor Holdings, Inc. (a) 800 26,480 DRS Technologies, Inc. (a) 3,800 106,324 Esterline Technologies Corp. (a) 2,900 72,065 General Dynamics Corp. 12,520 1,118,412 Herley Industries, Inc. (a) 2,100 39,648 Honeywell International, Inc. 36,738 1,243,581 Kaman Corp., Class A 4,000 59,720 L-3 Communications Holdings, Inc. 400 23,792 Ladish Co., Inc. (a) 4,500 39,510 Northrop Grumman Corp. 600 59,052 Precision Castparts Corp. 1,700 74,851 Raytheon Co. 25,098 786,571 United Technologies Corp. 23,740 2,048,762 ------------ Aerospace & Defense Total 5,831,379 Shares Value ($) ------------ ------------ AIR FREIGHT & LOGISTICS - 0.1% CNF, Inc. 2,200 73,920 EGL, Inc. (a) 8,400 150,864 HUB Group, Inc., Class A (a) 2,665 80,030 Ryder System, Inc. 2,100 81,333 UTI Worldwide, Inc. 1,900 84,911 ------------ Air Freight & Logistics Total 471,058 AIRLINES - 0.1% AMR Corp. (a) 7,600 96,748 Atlantic Coast Airlines Holdings, Inc. (a) 2,600 18,902 MAIR Holdings, Inc. (a) 2,400 21,936 Skywest, Inc. 3,100 59,644 ------------ Airlines Total 197,230 BUILDING PRODUCTS - 0.1% Jacuzzi Brands, Inc. (a) 5,400 50,652 Masco Corp. 3,400 103,496 NCI Building Systems, Inc. (a) 2,200 51,612 Wienerberger AG 8,650 287,407 ------------ Building Products Total 493,167 COMMERCIAL SERVICES & SUPPLIES - 1.5% ActivCard Corp. (a) 4,900 31,703 Allied Waste Industries, Inc. (a) 11,400 151,734 Angelica Corp. 1,900 43,377 Arbitron, Inc. (a) 2,900 116,754 Avery Dennison Corp. 9,646 600,078 Brink's Co. 7,500 206,850 Capita Group PLC 48,131 276,874 Casella Waste Systems, Inc., Class A (a) 7,000 101,780 Cendant Corp. 64,900 1,582,911 Century Business Services, Inc. (a) 7,900 38,789 ChoicePoint, Inc. (a) 2,600 98,878 Consolidated Graphics, Inc. (a) 2,900 111,505 Corporate Executive Board Co. 5,090 239,230 Danka Business Systems PLC, ADR (a) 7,600 32,384 Education Management Corp. (a) 4,100 130,503 Electro Rent Corp. (a) 1,200 12,072 First Consulting Group, Inc. (a) 5,031 31,494 Healthcare Services Group, Inc. 3,750 61,688 Imagistics International, Inc. (a) 3,200 140,960 Ionics, Inc. (a) 1,800 51,120 Lightbridge, Inc. (a) 4,600 27,140 Manpower, Inc. 5,900 274,350 Monster Worldwide, Inc. (a) 6,650 174,230 Navigant Consulting, Inc. (a) 3,900 78,897 NCO Group, Inc. (a) 5,600 130,872 Randstad Holding NV 11,400 304,426 SOURCECORP, Inc. (a) 2,000 53,000 Sylvan Learning Systems, Inc. (a) 2,800 98,308 TeleTech Holdings, Inc. (a) 2,200 13,772 United Rentals, Inc. (a) 2,700 47,979 Waste Management, Inc. 64,158 1,936,288 ------------ Commercial Services & Supplies Total 7,199,946 See Accompanying Notes to Financial Statements. 29 ________________________________________________________________________________ March 31, 2004 (Unaudited) Columbia Asset Allocation Fund Shares Value ($) ------------ ------------ COMMON STOCKS - (CONTINUED) INDUSTRIALS - (CONTINUED) CONSTRUCTION & ENGINEERING - 0.2% Chicago Bridge & Iron Co. NV, N.Y. Registered Shares 4,000 111,320 Comfort Systems USA, Inc. (a) 6,700 48,374 EMCOR Group, Inc. (a) 1,000 36,700 Mastec, Inc. (a) 1,300 12,311 Quanta Services, Inc. (a) 2,000 14,160 Shimizu Corp. 63,000 343,137 Taisei Corp. 74,000 312,221 Washington Group International, Inc. (a) 1,900 69,559 ------------ Construction & Engineering Total 947,782 ELECTRICAL EQUIPMENT - 0.3% American Power Conversion 6,930 159,459 Ametek, Inc. 2,800 71,792 C&D Technologies, Inc. 2,900 48,459 Genlyte Group, Inc. (a) 1,100 61,644 Hubbell, Inc., Class B 1,000 40,130 Nitto Denko Corp. 5,500 301,673 Plug Power, Inc. (a) 8,500 65,620 Siemens AG 7,181 530,835 Woodward Governor Co. 1,100 70,114 ------------ Electrical Equipment Total 1,349,726 INDUSTRIAL CONGLOMERATES - 2.2% 3M Co. 14,900 1,219,863 Allete, Inc. 1,900 66,671 Burberry Group PLC 56,100 369,002 Carlisle Companies, Inc. 3,000 169,950 General Electric Co. 172,560 5,266,531 NIWS Co., Ltd. 65 198,830 Textron, Inc. 24,717 1,313,709 Tyco International Ltd. 69,640 1,995,186 ------------ Industrial Conglomerates Total 10,599,742 MACHINERY - 1.2% AGCO Corp. (a) 3,000 62,130 Alamo Group, Inc. 1,400 24,346 Atlas Copco AB, Class B 16,900 551,306 Briggs & Stratton Corp. 1,000 67,470 Cuno, Inc. (a) 2,300 103,224 Deere & Co. 16,351 1,133,288 Donaldson Co., Inc. 6,000 159,180 Dover Corp. 31,141 1,207,337 EnPro Industries, Inc. (a) 3,600 68,112 Federal Signal Corp. 1,461 29,001 Harsco Corp. 2,200 100,100 Ingersoll-Rand Co., Ltd., Class A 1,900 128,535 ITT Industries, Inc. 13,800 1,053,354 Kadant, Inc. (a) 2,900 60,465 Linde AG 7,400 392,396 Navistar International Corp. (a) 4,600 210,910 Parker Hannifin Corp. 1,600 90,400 RAE Systems, Inc. (a) 16,400 66,584 Robbins & Myers, Inc. 2,973 64,068 Shares Value ($) ------------ ------------ Tecumseh Products Co., Class A 1,300 54,730 UNOVA, Inc. (a) 1,700 36,737 ------------ Machinery Total 5,663,673 ROAD & RAIL - 0.2% Covenant Transport, Inc., Class A (a) 2,200 39,666 Dollar Thrifty Automotive Group, Inc. (a) 2,000 50,540 Genesee & Wyoming, Inc., Class A (a) 4,701 116,115 Heartland Express, Inc. 3,700 84,286 Old Dominion Freight Line, Inc. (a) 2,400 80,880 Sirva, Inc. (a) 4,100 98,892 Tokyu Corp. 52,000 325,109 U.S. Xpress Enterprises, Inc., Class A (a) 1,300 18,473 Werner Enterprises, Inc. 2,400 45,480 ------------ Road & Rail Total 859,441 TRADING COMPANIES & DISTRIBUTORS - 0.1% Aceto Corp. 3,200 50,272 Fastenal Co. 1,840 98,790 Hughes Supply, Inc. 1,502 78,705 Mitsubishi Corp. 22,000 259,481 Watsco., Inc. 3,500 101,500 ------------ Trading Companies & Distributors Total 588,748 TRANSPORTATION INFRASTRUCTURE - 0.1% BAA PLC 33,760 320,562 ------------ Transportation Infrastructure Total 320,562 ------------ INDUSTRIALS TOTAL 34,522,454 INFORMATION TECHNOLOGY - 11.8% COMMUNICATIONS EQUIPMENT - 1.9% 3Com Corp. (a) 14,040 99,122 Advanced Fibre Communications, Inc. (a) 24,400 537,532 Anaren, Inc. (a) 4,000 63,120 Andrew Corp. (a) 13,100 229,250 Avaya, Inc. (a) 8,300 131,804 Black Box Corp. 1,200 64,308 Cable Design Technologies Corp. (a) 3,800 36,024 Cisco Systems, Inc. (a) 148,965 3,503,657 Comverse Technology, Inc. (a) 13,840 251,058 F5 Networks, Inc. (a) 2,700 91,395 Finisar Corp. (a) 23,000 50,140 Foundry Networks, Inc. (a) 3,500 60,095 Inter-Tel, Inc. 2,045 61,473 Juniper Networks, Inc. (a) 11,500 299,115 Netopia, Inc. 6,000 73,560 NMS Communications Corp. (a) 9,500 68,020 Nokia Oyj, ADR 77,118 1,563,953 Nortel Networks Corp. (a) 36,370 213,672 Optical Communication Products, Inc. (a) 7,900 25,991 Polycom, Inc. (a) 8,420 178,757 QUALCOMM, Inc. 15,180 1,008,256 See Accompanying Notes to Financial Statements. 30 ________________________________________________________________________________ March 31, 2004 (Unaudited) Columbia Asset Allocation Fund Shares Value ($) ------------ ------------ COMMON STOCKS - (CONTINUED) INFORMATION TECHNOLOGY - (CONTINUED) COMMUNICATIONS EQUIPMENT - (CONTINUED) Tollgrade Communications, Inc. (a) 3,100 49,476 UTStarcom, Inc. (a) 5,840 167,958 ------------ Communications Equipment Total 8,827,736 COMPUTERS & PERIPHERALS - 1.2% Acer, Inc. 106,000 164,067 Advanced Digital Information Corp. (a) 800 9,104 Applied Films Corp. (a) 4,100 114,390 Cray, Inc. (a) 11,500 76,245 Dell, Inc. (a) 36,475 1,226,290 Electronics for Imaging (a) 1,900 46,683 EMC Corp. (a) 63,200 860,152 Hutchinson Technology, Inc. (a) 1,800 50,508 Imation Corp. 500 18,810 Innovex, Inc. (a) 3,800 25,802 Intergraph Corp. (a) 1,235 29,862 International Business Machines Corp. 19,293 1,771,869 Iomega Corp. (a) 5,400 30,186 Lexmark International, Inc. (a) 13,554 1,246,968 Pinnacle Systems, Inc. (a) 10,800 97,524 ------------ Computers & Peripherals Total 5,768,460 ELECTRONIC EQUIPMENT & INSTRUMENTS - 1.7% Agilent Technologies, Inc. (a) 33,670 1,064,982 Agilysys, Inc. 2,400 28,560 Amphenol Corp., Class A (a) 13,280 394,416 Anixter International, Inc. (a) 3,800 107,350 Arrow Electronics, Inc. (a) 4,700 119,662 AVX Corp. 6,800 112,132 Benchmark Electronics, Inc. (a) 1,150 36,202 CDW Corp. 2,840 192,012 Celestica, Inc. (a) 14,700 239,147 Checkpoint Systems, Inc. (a) 3,000 56,700 Coherent, Inc. (a) 3,000 78,870 Epcos AG (a) 11,500 260,961 Flextronics International Ltd. (a) 54,120 931,946 Global Imaging Systems, Inc. (a) 4,100 136,202 Hon Hai Precision Industry 37,000 160,015 Hoya Corp. 2,900 282,255 Identix, Inc. (a) 5,900 34,096 Itron, Inc. (a) 5,100 94,911 Keyence Corp. 1,600 389,088 Littelfuse, Inc. (a) 3,300 122,760 MTS Systems Corp. 3,300 91,311 NU Horizons Electronics Corp. (a) 5,000 52,600 OSI Systems, Inc. (a) 2,000 40,000 Planar Systems, Inc. (a) 4,700 66,881 Samsung Electronic Co., Ltd., GDR 4,400 1,089,000 Samsung Electronics Co., Ltd., GDR (b) 5,096 1,261,260 Symbol Technologies, Inc. 5,890 81,282 TDK Corp. 4,200 320,180 Varian, Inc. (a) 2,800 112,476 Vishay Intertechnology, Inc. (a) 13,840 295,346 ------------ Electronic Equipment & Instruments Total 8,252,603 Shares Value ($) ------------ ------------ INTERNET SOFTWARE & SERVICES - 0.4% Check Point Software Technologies Ltd. (a) 4,900 111,573 Corillian Corp. (a) 14,100 69,795 Digital River, Inc. (a) 4,900 114,709 Digitas, Inc. (a) 11,700 120,393 Equinix, Inc. (a) 5,500 199,160 Index Corp. 42 231,174 Internet Security Systems (a) 2,900 51,156 Keynote Systems, Inc. (a) 3,800 48,906 Modem Media, Inc. (a) 3,600 23,400 PEC Solutions, Inc. (a) 3,100 40,982 Quovadx, Inc. (a) 9,500 34,960 Stellent, Inc. (a) 300 2,241 Telecommunication Systems, Inc. (a) 5,800 41,760 Yahoo!, Inc. (a) 13,020 632,642 ------------ Internet Software & Services Total 1,722,851 IT SERVICES - 0.9% Accenture Ltd., Class A (a) 46,750 1,159,400 Acxiom Corp. 2,900 63,684 Affiliated Computer Services, Inc., Class A (a) 3,000 155,700 Cognizant Technology Solutions Corp. (a) 20,300 918,575 Computer Horizons Corp. (a) 5,500 23,650 DST Systems, Inc. (a) 3,540 160,539 Forrester Research, Inc. (a) 100 1,895 GRIC Communications, Inc. (a) 8,700 29,145 Indra Sistemas SA 23,100 301,893 Inforte Corp. (a) 3,800 38,000 Maximus, Inc. (a) 1,000 35,000 MPS Group, Inc. (a) 10,900 121,208 Paychex, Inc. 25,500 907,800 Tis, Inc. 4,300 195,445 ------------ IT Services Total 4,111,934 OFFICE ELECTRONICS - 0.4% Canon, Inc. 10,000 516,853 Xerox Corp. (a) 108,373 1,578,995 ------------ Office Electronics Total 2,095,848 SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 2.9% Altera Corp. (a) 4,480 91,616 Amkor Technology, Inc. (a) 7,920 115,870 Applied Micro Circuits Corp. (a) 41,700 239,775 ARM Holdings PLC 101,852 223,470 ARM Holdings PLC, ADR 11,200 73,024 Artisan Components, Inc. (a) 6,900 153,801 ASML Holding NV, N.Y. Registered Shares (a) 40,265 738,057 August Technology Corp. (a) 5,600 84,000 Broadcom Corp., Class A (a) 8,400 329,028 Brooks Automation, Inc. (a) 5,500 115,390 DSP Group, Inc. (a) 2,500 64,325 Dupont Photomasks, Inc. (a) 2,100 48,846 Entegris, Inc. (a) 13,300 168,378 Exar Corp. (a) 3,000 55,500 See Accompanying Notes to Financial Statements. 31 ________________________________________________________________________________ March 31, 2004 (Unaudited) Columbia Asset Allocation Fund Shares Value ($) ------------ ------------ COMMON STOCKS - (CONTINUED) INFORMATION TECHNOLOGY - (CONTINUED) SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - (CONTINUED) Fairchild Semiconductor International, Inc. (a) 5,980 143,699 FEI Co. (a) 4,000 87,400 FSI International, Inc. (a) 3,200 26,144 Integrated Circuit Systems, Inc. (a) 2,600 65,078 Intel Corp. (a) 134,160 3,649,152 IXYS Corp. (a) 12,400 116,560 Lam Research Corp. (a) 31,100 784,031 Lattice Semiconductor Corp. (a) 7,000 61,110 Linear Technology Corp. 11,500 425,730 Marvell Technology Group Ltd. (a) 9,375 422,344 Microchip Technology, Inc. 38,160 1,013,530 Mykrolis Corp. (a) 6,600 94,116 National Semiconductor Corp. (a) 2,600 115,518 NEC Electronics 1,900 145,754 Nikon Corp. 14,000 185,933 NVIDIA Corp. (a) 4,000 105,960 Pericom Semiconductor Corp. (a) 3,000 34,440 Silicon Image, Inc. (a) 15,500 159,650 Silicon Laboratories, Inc. (a) 12,200 645,136 Silicon Storage Technology, Inc. (a) 13,500 174,690 Skyworks Solutions, Inc. (a) 5,400 62,964 Taiwan Semiconductor Manufacturing Co., Ltd., ADR (a) 97,988 1,022,995 Teradyne, Inc. (a) 5,960 142,027 Texas Instruments, Inc. 22,500 657,450 Transmeta Corp. (a) 16,391 64,908 United Microelectronics Corp., ADR (a) 17,700 92,040 Xilinx, Inc. (a) 18,040 685,520 Zoran Corp. (a) 2,300 39,928 ------------ Semiconductors & Semiconductor Equipment Total 13,724,887 SOFTWARE - 2.4% Activision, Inc. (a) 6,700 105,994 Amdocs Ltd. (a) 26,230 728,932 BEA Systems, Inc. (a) 7,120 90,851 BMC Software, Inc. (a) 6,270 122,578 Captaris, Inc. (a) 8,100 44,550 Captiva Software Corp. (a) 8,200 113,488 Dassault Systemes SA 5,350 222,529 Electronic Arts, Inc. (a) 26,800 1,446,128 Epicor Software Corp. (a) 5,000 66,350 Fair Isaac Corp. 5,070 182,926 Group 1 Software, Inc. (a) 2,900 47,212 Hyperion Solutions Corp. (a) 1,600 66,292 Intuit, Inc. (a) 80 3,590 Lawson Software, Inc. (a) 3,800 31,540 Magma Design Automation, Inc. (a) 3,800 79,458 Manhattan Associates, Inc. (a) 5,100 141,780 Mercury Interactive Corp. (a) 14,520 650,496 Micromuse, Inc. (a) 12,300 95,940 Microsoft Corp. 149,787 3,740,181 Shares Value ($) ------------ ------------ MSC.Software Corp. (a) 5,000 44,050 Novell, Inc. (a) 9,930 113,003 OpenTV Corp. (a) 19,900 64,277 Oracle Corp. (a) 82,025 985,120 PeopleSoft, Inc. (a) 4,540 83,945 PLATO Learning, Inc. (a) 7,400 74,666 Reynolds & Reynolds Co., Class A 4,500 127,845 SAP AG, ADR 18,600 731,166 ScanSoft, Inc. (a) 6,100 34,099 Siebel Systems, Inc. (a) 9,250 106,468 Sybase, Inc. (a) 2,300 48,277 Symantec Corp. (a) 9,120 422,256 Synopsys, Inc. (a) 1,100 31,856 Take-Two Interactive Software, Inc. (a) 1,600 58,848 VERITAS Software Corp. (a) 12,845 345,659 Verity, Inc. (a) 4,200 57,414 ------------ Software Total 11,309,764 ------------ INFORMATION TECHNOLOGY TOTAL 55,814,083 MATERIALS - 2.9% CHEMICALS - 1.2% Air Products & Chemicals, Inc. 32,719 1,639,876 BASF AG 5,600 284,820 Cytec Industries, Inc. 1,500 53,355 Eastman Chemical Co. 3,100 132,308 Engelhard Corp. 3,200 95,648 H.B. Fuller Co. 1,700 48,348 Hercules, Inc. (a) 2,200 25,256 International Flavors & Fragrances, Inc. 5,800 205,900 Landec Corp. (a) 8,100 69,660 Lubrizol Corp. 4,900 154,301 MG Technologies AG 20,500 287,087 Minerals Technologies, Inc. 1,100 62,810 Potash Corp. of Saskatchewan, Inc. 800 66,536 PPG Industries, Inc. 1,900 110,770 Praxair, Inc. 41,200 1,529,344 Schulman (A.), Inc. 2,200 43,230 Sensient Technologies Corp. 2,200 41,074 Shin-Etsu Chemical Co., Ltd. 5,300 222,602 Stepan Co. 1,700 38,828 Syngenta AG 7,656 558,757 Yara International ASA (a) 28,500 206,952 ------------ Chemicals Total 5,877,462 CONSTRUCTION MATERIALS - 0.1% AMCOL International Corp. 4,200 73,290 Eagle Materials, Inc. 1,400 82,390 Siam Cement Public Co., Ltd., NVDR 88,850 511,660 ------------ Construction Materials Total 667,340 CONTAINERS & PACKAGING - 0.2% Aptargroup, Inc. 1,300 49,920 Crown Holdings, Inc. (a) 4,000 37,280 Greif, Inc., Class A 2,200 76,868 Jarden Corp. (a) 8,600 305,386 See Accompanying Notes to Financial Statements. 32 ________________________________________________________________________________ March 31, 2004 (Unaudited) Columbia Asset Allocation Fund Shares Value ($) ------------ ------------ COMMON STOCKS - (CONTINUED) MATERIALS - (CONTINUED) CONTAINERS & PACKAGING - (CONTINUED) Packaging Corp. of America 5,500 124,080 Pactiv Corp. (a) 3,000 66,750 Smurfit-Stone Container Corp. (a) 4,380 77,044 Temple-Inland, Inc. 610 38,637 ------------ Containers & Packaging Total 775,965 METALS & MINING - 0.7% Alcoa, Inc. 40,700 1,411,883 BHP Billiton Ltd. 30,900 289,903 Carpenter Technology Corp. 3,100 101,928 IMCO Recycling, Inc. (a) 1,600 15,072 Metal Management, Inc. (a) 1,900 69,692 Peabody Energy Corp. 3,700 172,087 Phelps Dodge Corp. (a) 11,940 975,020 RTI International Metals, Inc. (a) 3,900 61,737 Steel Technologies, Inc. 7,500 144,900 ------------ Metals & Mining Total 3,242,222 PAPER & FOREST PRODUCTS - 0.7% Bowater, Inc. 4,110 179,319 Georgia-Pacific Corp. 5,000 168,450 Glatfelter 1,600 17,984 International Paper Co. 3,220 136,077 MeadWestvaco Corp. 47,832 1,353,167 Mercer International, Inc. 4,400 41,800 Schweitzer-Mauduit International, Inc. 800 25,840 Stora Enso Oyj, Class R 20,800 262,108 UPM-Kymmene Oyj 12,850 235,617 Weyerhaeuser Co. 13,744 900,232 ------------ Paper & Forest Products Total 3,320,594 ------------ MATERIALS TOTAL 13,883,583 TELECOMMUNICATION SERVICES - 2.4% DIVERSIFIED TELECOMMUNICATION SERVICES - 1.7% BellSouth Corp. 61,879 1,713,430 CenturyTel, Inc. 6,900 189,681 France Telecom SA 15,900 407,375 Nippon Telegraph & Telephone Corp 42 237,618 North Pittsburgh Systems, Inc. 2,300 46,299 Portugal Telecom SGPS, SA 27,800 311,317 Qwest Communications International, Inc. (a) 1 4 SBC Communications, Inc. 66,292 1,626,806 Telecom Italia S.p.A. 204,000 640,158 Telefonaktiebolaget LM Ericsson, ADR 15,200 421,800 Telefonica SA (a) 39,407 596,964 Verizon Communications, Inc. 45,666 1,668,636 ------------ Diversified Telecommunication Services Total 7,860,088 WIRELESS TELECOMMUNICATION SERVICES - 0.7% American Tower Corp., Class A (a) 22,640 256,964 At Road, Inc. (a) 6,400 78,528 Crown Castle International Corp. (a) 28,405 358,755 Shares Value ($) ------------ ------------ Mobile Telesystems, ADR 2,000 263,000 Nextel Partners, Inc., Class A (a) 8,000 101,280 NTT DoCoMo, Inc. 295 650,621 Price Communications Corp. (a) 2,900 45,501 Telephone & Data Systems, Inc. 3,100 219,697 VimpelCom, ADR (a) 4,400 457,556 Vodafone Group PLC 452,250 1,073,564 ------------ Wireless Telecommunication Services Total 3,505,466 ------------ TELECOMMUNICATION SERVICES TOTAL 11,365,554 UTILITIES - 1.7% ELECTRIC UTILITIES - 1.7% American Electric Power Co., Inc. 33,351 1,097,915 Central Vermont Public Service Corp. 3,300 74,250 CH Energy Group, Inc. 2,200 107,998 Consolidated Edison, Inc. 38,174 1,683,473 E. ON AG 4,200 277,033 El Paso Electric Co. (a) 3,700 51,208 Entergy Corp. 16,046 954,737 Exelon Corp. 2,500 172,175 Maine & Maritimes Corp. 700 23,905 MGE Energy, Inc. 1,300 40,105 National Grid Transco PLC 56,600 448,732 Otter Tail Corp. 1,200 31,704 PPL Corp. 1,600 72,960 Progress Energy, Inc. 3,300 155,364 Public Power Corp. 11,100 279,203 Puget Energy, Inc. 2,600 58,162 Southern Co. 26,609 811,574 TXU Corp. 49,257 1,411,706 ------------ Electric Utilities Total 7,752,204 GAS UTILITIES - 0.0% Cascade Natural Gas Corp. 1,400 30,506 Northwest Natural Gas Co. 1,100 34,375 WGL Holdings, Inc. 1,200 36,120 ------------ Gas Utilities Total 101,001 MULTI-UTILITIES & UNREGULATED POWER - 0.0% Energy East Corp. 4,000 101,440 MDU Resources Group, Inc. 1,350 31,712 ------------ Multi-Utilities & Unregulated Power Total 133,152 ------------ UTILITIES TOTAL 7,986,357 TOTAL COMMON STOCKS (Cost of $256,794,400) 309,435,744 Par ($) ------------ CORPORATE NOTES AND BONDS - 14.6% Acetex Corp., Senior Notes, 10.875% 08/01/09 100,000 109,750 Airgas Inc., 9.125% 10/01/11 250,000 283,750 See Accompanying Notes to Financial Statements. 33 ________________________________________________________________________________ March 31, 2004 (Unaudited) Columbia Asset Allocation Fund Par ($) Value ($) ------------ ------------ CORPORATE NOTES AND BONDS - (CONTINUED) Allied Waste North America, Inc., Series B: 7.875% 01/01/09 29,000 30,160 9.250% 09/01/12 500,000 565,000 AmerisourceBergen Corp., Senior Note, 8.125% 09/01/08 300,000 334,500 Apogent Technologies, Inc., Senior Subordinate Note, 6.500% 05/15/13 (b) 200,000 212,500 Arch Western Finance, Senior Note, 6.750% 07/01/13 (b) 350,000 374,500 Autonation, Inc., 9.000% 08/01/08 (b) 205,000 239,337 Ball Corp., 6.875% 12/15/12 475,000 513,594 Bank One Corp., 6.500% 02/01/06 1,700,000 1,843,616 Cascades, Inc., Senior Note, 7.250% 02/15/13 (b) 200,000 209,500 Chesapeake Energy Corp., 8.125% 04/01/11 150,000 165,375 Chesapeake Energy Corp., Senior Note, 7.500% 09/15/13 (b) 300,000 330,000 Cinemark USA, Inc., Senior Subordinate Note, 9.000% 02/01/13 (b) 300,000 324,000 Citicorp Lease Pass Thru Certificates, Series 1999-1, Class A-2, 8.040% 12/15/19 (b) 1,900,000 2,299,570 Constellation Brands, Inc., Series B, 8.125% 01/15/12 450,000 497,250 Corrections Corporation of America, Senior Note, 7.500% 05/01/11 325,000 343,687 Cott Beverages USA, Inc., 8.000% 12/15/11 450,000 497,250 Couche Tard US Finance, 7.500% 12/15/13 (b) 160,000 170,800 Credit Suisse First Boston USA, Inc., 5.875% 08/01/06 1,500,000 1,623,495 Devon Financing Corp. ULC: 6.875% 09/30/11 1,150,000 1,326,801 7.875% 09/30/31 250,000 309,675 Dex Media East LLC/Dex Media East Finance Co., Senior Subordinate Note, 12.125% 11/15/12 (b) 300,000 350,250 DirecTV Holdings LLC, Senior Note, 8.375% 03/15/13 (b) 375,000 428,438 Dominion Resources, Inc., 6.300% 03/15/33 625,000 648,162 Echostar DBS Corp., Senior Note, 5.750% 10/01/08 (b) 400,000 412,000 Equistar Chemicals LP/Equistar Funding Corp.: 10.130% 09/01/08 25,000 26,875 10.625% 05/01/11 (b) 75,000 80,625 Par ($) Value ($) ------------ ------------ Ethyl Corp., Senior Note, 8.875% 05/01/10 (b) 155,000 167,400 Extended Stay America, Inc., Senior Subordinate Note, 9.150% 03/15/08 335,000 346,893 FirstEnergy Corp., Series A, 5.500% 11/15/06 1,850,000 1,967,401 Florida Windstorm Underwriting Association, Series 1999-A, 7.125% 02/25/19 (b) 1,400,000 1,713,236 Ford Motor Credit Co., 7.375% 02/01/11 2,125,000 2,318,779 Gannett Co., Inc., 5.500% 04/01/07 1,000,000 1,086,110 General Motors Corp., Senior Note: 6.875% 08/28/12 850,000 920,652 7.125% 07/15/13 250,000 272,755 Goldman Sachs Group, Inc., 6.600% 01/15/12 2,000,000 2,291,440 Grant Prideco, Inc., Series B, 9.625% 12/01/07 405,000 461,700 Group 1 Automotive, Inc., 8.250% 08/15/13 80,000 88,200 Harrah's Operating Co., Inc., 7.875% 12/15/05 350,000 378,000 Hasbro, Inc., 6.150% 07/15/08 150,000 160,500 HCA, Inc., 7.130% 06/01/06 1,450,000 1,567,972 Health Care, REIT Inc., 7.500% 08/15/07 200,000 224,866 Houghton Mifflin Co., Senior Note, 9.875% 02/01/13 (b) 105,000 107,888 Household Finance Corp., 5.875% 02/01/09 1,100,000 1,219,328 HSBC Capital Funding LP/Jersey Channel Islands, 9.547% 12/31/49 (b) 800,000 1,038,532 Illinois St. Taxable Pension, 5.100% 06/01/33 650,000 628,030 International Lease Finance Corp., 6.375% 03/15/09 2,250,000 2,537,528 Iron Mountain Inc., 8.625% 04/01/13 450,000 490,500 iStar Financial, Inc., Senior Note: 5.125% 04/01/11 (b) 25,000 25,062 7.000% 03/15/08 125,000 135,000 8.750% 08/15/08 120,000 136,050 Jefferson Smurfit Corp., 8.250% 10/01/12 200,000 217,000 K&F Industries, Inc., Series B, Senior Subordinate Note, 9.625% 12/15/10 215,000 239,725 KB Home, Senior Subordinate Note, 8.625% 12/15/08 325,000 365,625 Kennametal, Inc., Senior Note, 7.200% 06/15/12 400,000 444,648 See Accompanying Notes to Financial Statements. 34 ________________________________________________________________________________ March 31, 2004 (Unaudited) Columbia Asset Allocation Fund Par ($) Value ($) ------------ ------------ CORPORATE NOTES AND BONDS - (CONTINUED) Key Energy Services, Inc., Senior Note: 6.375% 05/01/13 160,000 164,000 8.375% 03/01/08 30,000 31,800 L-3 Communications Corp., 7.625% 06/15/12 450,000 495,000 Lamar Media Corp., Senior Subordinate Note, 7.250% 01/01/13 (b) 450,000 488,250 Lear Corp, Series B, 8.110% 05/15/09 400,000 475,000 Lin TV Corp., Senior Subordinate Note, 6.500% 05/15/13 (b) 275,000 283,594 MacDermid, Inc., 9.125% 07/15/11 130,000 146,250 MGM Grand, Inc., 9.750% 06/01/07 450,000 522,000 Nailco Co., 7.750% 11/15/11 (b) 115,000 119,600 Nexen, Inc., 7.875% 03/15/32 750,000 948,210 Nextel Communications, Inc., Senior Note: 7.375% 08/01/15 150,000 162,188 9.375% 11/15/09 300,000 325,875 Offshore Logistic, Inc., 6.125% 06/15/13 75,000 74,625 Omnicare Inc., Series B, 8.125% 03/15/11 375,000 418,125 Owens-Illinois, Inc., Senior Note, 7.350% 05/15/08 255,000 251,175 Park Place Entertainment Corp., Senior Subordinate Note, 9.375% 02/15/07 425,000 478,125 Peabody Energy Corp., Series B: 5.875% 04/15/16 75,000 75,375 6.875% 03/15/13 275,000 297,688 Pemex Project Fund Master Trust, 7.875% 02/01/09 550,000 632,500 Pride International, Inc., Senior Note, 10.000% 06/01/09 400,000 425,500 Procter & Gamble Co., 4.750% 06/15/07 1,100,000 1,178,430 Province Healthcare Co., Senior Subordinate Note, 7.500% 06/01/13 225,000 231,188 Prudential Insurance Company of America, 7.650% 07/01/07 (b) 2,000,000 2,281,960 Public Service Electric Gas Co., 4.000% 11/01/08 1,125,000 1,160,336 PSE&G Power LLC, 5.500% 12/01/15 650,000 664,632 R.H. Donnelley Finance Corp., Senior Subordinate Note, 10.875% 12/15/12 (b) 400,000 478,000 Par ($) Value ($) ------------ ------------ Rabobank Capital Fund II, 5.260% 12/31/49 (b) 1,425,000 1,479,235 Raytheon Co., 8.300% 03/01/10 1,750,000 2,135,175 Rogers Cable Inc., 7.875% 05/01/12 400,000 460,708 Royal Caribbean Cruises Ltd.: 6.875% 12/01/13 100,000 105,250 8.000% 05/15/10 15,000 16,838 8.750% 02/02/11 45,000 52,650 Russel Metals, Inc., 6.875% 03/01/14 (b) 50,000 51,250 Scotts Co., 6.625% 11/15/13 (b) 150,000 157,500 Select Medical Corp., Senior Subordinate Note, 9.500% 06/15/09 350,000 385,875 Silgan Corp., Senior Subordinate Debenture, 6.750% 11/15/13 350,000 361,375 Sinclair Broadcast Group, Inc., 8.750% 12/15/11 245,000 269,500 Six Flags, Inc.: 9.500% 02/01/09 25,000 26,375 9.625% 06/01/14 100,000 105,000 Speedway Motorsports, Inc., Senior Subordinate Note, 6.750% 06/01/13 (b) 235,000 249,100 Sprint Capital Corp., 6.125% 11/15/08 1,025,000 1,130,298 Southern Power Co., 6.250% 06/15/12 665,000 737,911 Starwood Hotels & Resorts Worldwide, Inc., 7.875% 05/01/12 225,000 253,688 Station Casinos, Inc., Senior Subordinate Note, 6.500% 02/01/14 (b) 500,000 500,625 Stone Container Corp., Senior Note, 8.375% 07/01/12 125,000 136,250 Suburban Propane Partners, 6.875% 12/15/13 (b) 145,000 150,800 Sun International Hotels Ltd., 8.875% 08/15/11 30,000 33,300 Synagro Technologies, Inc., Senior Subordinate Note, 9.500% 04/01/09 125,000 136,250 Teekay Shipping Corp., Senior Note, 8.875% 07/15/11 135,000 156,600 Tenet Healthcare Corp., Senior Note, 5.375% 11/15/06 785,000 741,825 Toll Corp., 8.250% 12/01/11 365,000 412,450 Transdigm, Inc., 8.375% 07/15/11 250,000 265,000 Triad Hospitals, Inc., Series B, 8.750% 05/01/09 350,000 382,375 See Accompanying Notes to Financial Statements. 35 ________________________________________________________________________________ March 31, 2004 (Unaudited) Columbia Asset Allocation Fund Par ($) Value ($) ------------ ------------ CORPORATE NOTES AND BONDS - (CONTINUED) Tricon Global Restaurants, Inc., 8.875% 04/15/11 105,000 131,512 United Rentals North America, Inc.: 7.000% 02/15/14 150,000 141,000 7.750% 11/15/13 250,000 245,000 Universal Compression, Inc., Senior Note, 7.250% 05/15/10 180,000 193,500 Verizon Global Funding Corp., 7.750% 12/01/30 1,300,000 1,569,295 Verizon Wireless Capital LLC, 5.375% 12/15/06 500,000 538,765 Vintage Petroleum, Inc., 7.875% 05/15/11 250,000 269,375 Washington Mutual Financial Corp., 6.250% 05/15/06 1,000,000 1,088,130 Wells Fargo Financial, Inc., 6.125% 02/15/06 830,000 895,047 Westinghouse Air Brake, Senior Note, 6.875% 07/31/13 (b) 145,000 155,150 Westport Resources Corp., 8.250% 11/01/11 475,000 528,437 Westvaco Corp., 8.200% 01/15/30 1,290,000 1,581,566 WorldCom, Inc., 8.250% 05/15/31 (c) 400,000 136,000 Wyeth, 6.500% 02/01/34 650,000 688,370 XTO Energy, Inc., Senior Note, 7.500% 04/15/12 420,000 498,313 Yum! Brands, Inc., Senior Note, 7.700% 07/01/12 305,000 363,712 ------------ TOTAL CORPORATE NOTES AND BONDS (Cost of $65,153,320) 68,827,081 MORTGAGE-BACKED SECURITIES - 11.3% FEDERAL NATIONAL MORTGAGE ASSOCIATION - 7.4% 5.000% 01/01/18-08/01/33 12,233,051 12,490,980 5.500% 05/01/16-10/01/33 12,887,834 13,248,433 6.000% 01/01/09-06/01/14 554,886 585,376 6.120% 10/01/08 2,339,965 2,361,013 6.500% 03/01/11-10/01/32 3,649,898 3,835,345 7.000% 03/01/15-07/01/32 1,263,959 1,343,906 7.500% 06/01/15-08/01/31 583,292 625,186 8.000% 12/01/29-07/01/31 304,400 329,634 ------------ Federal National Mortgage Association Total 34,819,873 GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 1.1% 6.000% 04/15/13-01/15/29 877,207 919,299 6.500% 05/15/13-07/15/31 2,195,247 2,327,408 7.000% 11/15/13-06/15/31 1,113,400 1,194,040 7.500% 06/15/23-09/15/29 401,156 431,861 8.000% 07/15/25 99,052 108,734 Par ($) Value ($) ------------ ------------ 8.500% 12/15/30 17,833 19,514 9.000% 12/15/17 85,227 95,318 ------------ Government National Mortgage Association Total 5,096,174 FEDERAL HOME LOAN MORTGAGE CORPORATION - 0.7% 6.500% 02/01/11-07/01/31 2,122,895 2,243,803 7.000% 07/01/28-08/01/31 905,114 960,167 7.500% 07/01/15-01/01/30 261,706 281,309 8.000% 09/01/15 121,016 130,153 ------------ Federal Home Loan Mortgage Corporation Total 3,615,432 OTHER MORTGAGE-BACKED SECURITIES - 2.1% American Mortgage Trust, 8.445% 09/27/22 28,885 25,996 Federal National Mortgage Association, Series 2003-24, Class LC, 5.000% 12/25/15 1,200,000 1,241,080 First Union Chase Mortgage, Series 1999-C2, Class A-2, 6.645% 06/15/31 450,000 511,595 GS Mortgage Securities Corp. II, Series 1998-C1, Class A-2, 6.620% 10/18/30 2,000,000 2,247,236 J.P. Morgan Commercial Mortgage Finance Corp., Series 1999-C7, Class A-2, 6.507% 10/15/35 1,600,000 1,810,941 LB-UBS Commercial Mortgage Trust, Series 2000-C5, Class A-2, 6.510% 12/15/26 1,000,000 1,149,896 Rural Housing Trust, Series 1987-1, Class D, CMO, 6.330% 04/01/26 154,932 155,122 Wachovia Bank Commercial Mortgage Trust, Series 2003-C5, Class A-2, 3.989% 06/15/35 3,000,000 2,940,120 ------------ Other Mortgage-Backed Securities Total 10,081,986 ------------ TOTAL MORTGAGE-BACKED SECURITIES (Cost of $51,558,712) 53,613,465 ASSET-BACKED SECURITIES - 3.1% California Infrastructure, Series 1997-1, Class A-7, 6.420% 12/26/09 2,000,000 2,230,160 Chase Manhattan Auto Owner Trust, Series 2001-B, Class A-4, 3.800% 05/15/08 1,200,000 1,225,308 Chemical Bank Master Credit Card Trust I, Series 1996-2, Class A, 5.980% 09/15/08 1,550,000 1,641,435 Citibank Credit Card Issuance Trust, Series 2002-A, Class A-1, 4.950% 02/09/09 225,000 240,741 See Accompanying Notes to Financial Statements. 36 ________________________________________________________________________________ March 31, 2004 (Unaudited) Columbia Asset Allocation Fund Par ($) Value ($) ------------ ------------ ASSET-BACKED SECURITIES - (CONTINUED) Continental Airlines, Inc., Pass Thru Certificates, 7.461% 04/01/15 831,352 814,725 Federal Express Corp., Pass Thru Certificates, 7.530% 09/15/09 532,002 577,983 Honda Auto Receivables Owner Trust, Series 2002-3, Class A-3, 3.000% 05/18/06 843,189 850,929 MBNA Master Credit Card Trust, Series 1999-M, Class A, 6.600% 04/16/07 1,200,000 1,237,776 Origen Manufactured Housing, Series 2004-A, Class A-2, 3.380% 08/15/17 870,000 874,440 Standard Credit Card Master Trust, Series 1995-9, Class A, 6.550% 10/07/07 2,595,000 2,772,420 United Airlines Pass Thru Certificates: Series 1991, Class A-1 9.200% 03/22/08 (c) 1,014,043 446,178 Series 2000-2, Class A-1 7.032% 10/01/10 588,020 532,159 Wells Fargo Auto Trust, Series 2001-A, Class A-4, 5.070% 03/15/08 1,353,616 1,367,409 ------------ TOTAL ASSET-BACKED SECURITIES (Cost of $15,290,146) 14,811,663 U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 2.8% FEDERAL NATIONAL MORTGAGE ASSOCIATION - 1.1% 6.625% 09/15/09 4,325,000 5,045,286 ------------ Federal National Mortgage Association Total 5,045,286 U.S. TREASURY BONDS - 1.7% 5.000% 02/15/11 730,000 805,851 5.375% 02/15/31 3,240,000 3,531,600 6.125% 08/15/29 425,000 503,791 6.250% 08/15/23 1,200,000 1,426,828 7.500% 11/15/16 950,000 1,252,441 8.875% 08/15/17 420,000 615,431 ------------ U.S. Treasury Bonds Total 8,135,942 TOTAL U.S. GOVERNMENT AND AGENCY OBLIGATIONS (Cost of $12,140,177) 13,181,228 ------------ Shares ------------ PREFERRED STOCK - 0.2% CONSUMER DISCRETIONARY - 0.2% MEDIA - 0.2% News Corp., Ltd. (Cost of $928,356) 28,100 891,051 ------------ Shares Value ($) ------------ ------------ INVESTMENT MANAGEMENT COMPANIES - 0.1% iShares MSCI Japan Index Fund 13,430 145,984 iShares Russell 1000 Value Index Fund 7,550 452,320 ------------ TOTAL INVESTMENT MANAGEMENT COMPANIES (Cost of $565,789) 598,304 INCOME DEPOSIT SECURITY - 0.0% CONSUMER DISCRETIONARY - 0.0% HOTELS, RESTAURANTS & LEISURE - 0.0% Volume Services America Holdings, Inc. (Cost of $58,530) 3,900 64,350 ------------ Par ($) ------------ SHORT-TERM OBLIGATIONS - 2.2% Repurchase agreement with State Street Bank & Trust Co., dated 03/31/04, due 04/01/04 at 0.930%, collateralized by U.S. Treasury Notes with various maturities to 05/15/08, market value $1,829,262 (repurchase proceeds $1,780,046) (Cost of $1,780,000) 1,780,000 1,780,000 ------------ Repurchase agreement with State Street Bank & Trust Co., dated 03/31/04, due 04/01/04 at 0.960%, collateralized by U.S. Treasury Bonds with various maturities to 02/15/31, market value $8,593,904 (repurchase proceeds $8,411,224) (Cost of $8,411,000) 8,411,000 8,411,000 ------------ TOTAL INVESTMENTS - 99.8% (COST OF $412,680,430) (D) 471,613,886 OTHER ASSETS & LIABILITIES, NET - 0.2% 784,225 NET ASSETS - 100.0% 472,398,111 NOTES TO INVESTMENT PORTFOLIO: (a) Non-income producing. (b) This security is exempt from registration under Rule 144A of the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. At March 31, 2004, the value of these securities amounted to $16,139,962 which represents 3.4% of net assets. (c) This issuer is in default of certain debt covenants. Income is not being accrued. (d) Cost for federal income tax is $413,230,555. ACRONYM NAME ------- ----- ADR American Depositary Receipt CMO Collateralized Mortgage Obligation GDR Global Depositary Receipt NVDR Non-Voting Depositary Receipt REIT Real Estate Investment Trust See Accompanying Notes to Financial Statements. 37 INVESTMENT PORTFOLIO____________________________________________________________ March 31, 2004 (Unaudited) Columbia Large Cap Growth Fund Shares Value ($) ------------ ------------ COMMON STOCKS - 99.6% CONSUMER DISCRETIONARY - 14.1% HOTELS, RESTAURANTS & LEISURE - 0.4% Yum! Brands, Inc. (a) 114,200 4,338,458 ------------ Hotels, Restaurants & Leisure Total 4,338,458 INTERNET & CATALOG RETAIL - 0.8% eBay, Inc. (a) 116,400 8,070,012 ------------ Internet & Catalog Retail Total 8,070,012 MEDIA - 3.1% Clear Channel Communications, Inc. 116,100 4,916,835 Omnicom Group, Inc. 117,900 9,461,475 Viacom, Inc., Class A 252,100 9,884,841 Walt Disney Co. 156,200 3,903,438 XM Satellite Radio Holdings, Inc., Class A (a) 110,000 3,080,000 ------------ Media Total 31,246,589 MULTILINE RETAIL - 2.3% Kohl's Corp. (a) 234,000 11,309,220 Target Corp. 247,300 11,138,392 ------------ Multiline Retail Total 22,447,612 SPECIALTY RETAIL - 6.7% Bed Bath & Beyond, Inc. (a) 287,500 12,006,000 Best Buy Co., Inc. 186,830 9,662,848 Chico's FAS, Inc. (a) 198,100 9,191,840 Home Depot, Inc. 268,600 10,034,896 Lowe's Companies, Inc. 287,600 16,142,988 Staples, Inc. (a) 379,300 9,630,427 ------------ Specialty Retail Total 66,668,999 TEXTILES, APPAREL & LUXURY GOODS - 0.8% Coach, Inc. (a) 203,500 8,341,465 ------------ Textiles, Apparel & Luxury Goods Total 8,341,465 ------------ CONSUMER DISCRETIONARY TOTAL 141,113,135 CONSUMER STAPLES - 11.6% BEVERAGES - 3.3% Coca-Cola Co. 355,100 17,861,530 PepsiCo, Inc. 277,600 14,948,760 ------------ Beverages Total 32,810,290 FOOD & STAPLES RETAILING - 3.7% Costco Wholesale Corp. (a) 216,700 8,139,252 Sysco Corp. 216,400 8,450,420 Wal-Mart Stores, Inc. 341,800 20,402,042 ------------ Food & Staples Retailing 36,991,714 FOOD PRODUCTS - 0.8% Bunge Ltd. 189,500 7,621,690 ------------ Food Products Total 7,621,690 Shares Value ($) ------------ ------------ HOUSEHOLD PRODUCTS - 1.3% Procter & Gamble Co. 125,000 13,110,000 ------------ Household Products Total 13,110,000 PERSONAL PRODUCTS - 1.4% Alberto-Culver Co., Inc., Class B 331,200 14,529,744 ------------ Personal Products Total 14,529,744 TOBACCO - 1.1% Altria Group, Inc. 194,700 10,601,415 ------------ Tobacco Total 10,601,415 ------------ CONSUMER STAPLES TOTAL 115,664,853 ENERGY - 0.5% ENERGY EQUIPMENT & SERVICES - 0.5% Noble Corp. (a) 19,800 760,716 Schlumberger Ltd. 62,900 4,016,165 ------------ Energy Equipment & Services Total 4,776,881 ------------ ENERGY TOTAL 4,776,881 FINANCIALS - 4.9% CAPITAL MARKETS - 0.8% Merrill Lynch & Co., Inc. 139,500 8,308,620 ------------ Capital Markets Total 8,308,620 COMMERCIAL BANKS - 0.7% Charter One Financial, Inc. 213,200 7,538,752 ------------ Commercial Banks Total 7,538,752 CONSUMER FINANCE - 1.4% American Express Co. 100,300 5,200,555 MBNA Corp. 303,600 8,388,468 ------------ Consumer Finance Total 13,589,023 DIVERSIFIED FINANCIAL SERVICES - 0.5% Citigroup, Inc. 101,100 5,226,870 ------------ Diversified Financial Services Total 5,226,870 INSURANCE - 1.0% American International Group, Inc. 69,100 4,930,285 Progressive Corp. 55,800 4,888,080 ------------ Insurance Total 9,818,365 THRIFTS & MORTGAGE FINANCE - 0.5% Fannie Mae 67,500 5,018,625 ------------ Thrifts & Mortgage Finance Total 5,018,625 ------------ FINANCIALS TOTAL 49,500,255 HEALTH CARE - 19.3% BIOTECHNOLOGY - 3.6% Amgen, Inc. (a) 330,800 19,242,636 Gilead Sciences, Inc. (a) 225,700 12,587,289 Martek Biosciences Corp. (a) 83,700 4,770,900 ------------ Biotechnology Total 36,600,825 See Accompanying Notes to Financial Statements. 38 ________________________________________________________________________________ March 31, 2004 (Unaudited) Columbia Large Cap Growth Fund Shares Value ($) ------------ ------------ COMMON STOCKS - (CONTINUED) HEALTH CARE - (CONTINUED) HEALTH CARE EQUIPMENT & SUPPLIES - 6.6% Alcon, Inc. 175,300 11,096,490 Boston Scientific Corp. (a) 370,600 15,706,028 St. Jude Medical, Inc. (a) 176,100 12,696,810 Varian Medical Systems, Inc. (a) 170,800 14,741,748 Zimmer Holdings, Inc. (a) 156,400 11,539,192 ------------ Health Care Equipment & Supplies Total 65,780,268 HEALTH CARE PROVIDERS & SERVICES - 2.1% Caremark Rx, Inc. (a) 636,200 21,153,650 ------------ Health Care Providers & Services Total 21,153,650 PHARMACEUTICALS - 7.0% Pfizer, Inc. 1,311,900 45,982,095 Teva Pharmaceutical Industries Ltd., ADR 378,600 24,007,026 ------------ Pharmaceuticals Total 69,989,121 ------------ HEALTH CARE TOTAL 193,523,864 INDUSTRIALS - 12.0% AEROSPACE & DEFENSE - 0.9% United Technologies Corp. 103,800 8,957,940 ------------ Aerospace & Defense Total 8,957,940 COMMERCIAL SERVICES & SUPPLIES - 1.3% Cendant Corp. 547,700 13,358,403 ------------ Commerical Services & Supplies Total 13,358,403 INDUSTRIAL CONGLOMERATES - 8.7% 3M Co. 154,000 12,607,980 General Electric Co. 1,765,900 53,895,268 Tyco International Ltd. 711,140 20,374,161 ------------ Industrial Conglomerates Total 86,877,409 MACHINERY - 1.1% ITT Industries, Inc. 148,100 11,304,473 ------------ Machinery Total 11,304,473 ------------ INDUSTRIALS TOTAL 120,498,225 INFORMATION TECHNOLOGY - 32.2% COMMUNICATIONS EQUIPMENT - 5.4% Advanced Fibre Communications, Inc. (a) 189,000 4,163,670 Cisco Systems, Inc. (a) 1,567,400 36,865,248 Juniper Networks, Inc. (a) 117,500 3,056,175 QUALCOMM, Inc. 154,500 10,261,890 ------------ Communications Equipment Total 54,346,983 COMPUTERS & PERIPHERALS - 2.9% Dell, Inc. (a) 373,600 12,560,432 EMC Corp. (a) 643,400 8,756,674 International Business Machines Corp. 80,200 7,365,568 ------------ Computers & Peripherals Total 28,682,674 Shares Value ($) ------------ ------------ ELECTRONIC EQUIPMENT & INSTRUMENTS - 1.5% Agilent Technologies, Inc. (a) 280,300 8,865,889 Flextronics International Ltd. (a) 346,000 5,958,120 ------------ Electronic Equipment & Instruments Total 14,824,009 INTERNET SOFTWARE & SERVICES - 0.7% Yahoo!, Inc. (a) 138,600 6,734,574 ------------ Internet Software & Services Total 6,734,574 IT SERVICES - 1.9% Cognizant Technology Solutions Corp. (a) 208,500 9,434,625 Paychex, Inc. 272,900 9,715,240 ------------ IT Services Total 19,149,865 SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 11.5% Applied Micro Circuits Corp. (a) 424,600 2,441,450 ASML Holding NV, N.Y. Registered Shares (a) 340,200 6,235,866 Broadcom Corp., Class A (a) 87,300 3,419,541 Intel Corp. 1,419,400 38,607,680 Lam Research Corp. (a) 317,000 7,991,570 Linear Technology Corp. 121,200 4,486,824 Marvell Technology Group Ltd. (a) 97,300 4,383,365 Microchip Technology, Inc. 352,500 9,362,400 Samsung Electronics Co., Ltd., GDR (b) 53,500 13,241,250 Silicon Laboratories, Inc. (a) 124,000 6,557,120 Taiwan Semiconductor Manufacturing Co., Ltd., ADR (a) 509,800 5,322,312 Texas Instruments, Inc. 229,200 6,697,224 Xilinx, Inc. (a) 183,800 6,984,400 ------------ Semiconductors & Semiconductor Equipment Total 115,731,002 SOFTWARE - 8.3% Amdocs Ltd. (a) 200,300 5,566,337 Electronic Arts, Inc. (a) 278,100 15,006,276 Mercury Interactive Corp. (a) 119,000 5,331,200 Microsoft Corp. 1,361,700 34,001,649 Oracle Corp. (a) 839,500 10,082,395 SAP AG, ADR 191,900 7,543,589 Symantec Corp. (a) 67,400 3,120,620 VERITAS Software Corp. (a) 84,700 2,279,277 ------------ Software Total 82,931,343 ------------ INFORMATION TECHNOLOGY TOTAL 322,400,450 MATERIALS - 3.9% CHEMICALS - 1.4% Praxair, Inc. 379,300 14,079,616 ------------ Chemicals Total 14,079,616 METALS & MINING - 2.5% Alcoa, Inc. 437,800 15,187,282 Phelps Dodge Corp. (a) 121,960 9,959,253 ------------ Metals & Mining Total 25,146,535 ------------ MATERIALS TOTAL 39,226,151 See Accompanying Notes to Financial Statements. 39 ________________________________________________________________________________ March 31, 2004 (Unaudited) Columbia Large Cap Growth Fund Shares Value ($) ------------ ------------ COMMON STOCKS - (CONTINUED) TELECOMMUNICATION SERVICES - 1.1% WIRELESS TELECOMMUNICATION SERVICES - 1.1% American Tower Corp., Class A (a) 232,500 2,638,875 Crown Castle International Corp. (a) 290,200 3,665,226 Mobile Telesystems, ADR 21,700 2,853,550 VimpelCom, ADR (a) 13,200 1,372,668 ------------ Wireless Telecommunication Services Total 10,530,319 ------------ TELECOMMUNICATION SERVICES TOTAL 10,530,319 TOTAL COMMON STOCKS (Cost of $832,080,059) 997,234,133 PREFERRED STOCK - 0.5% CONSUMER DISCRETIONARY - 0.5% MEDIA - 0.5% News Corp., Ltd., ADR (Cost of $5,259,996) 159,800 5,067,258 ------------ Par ($) ------------ Short-Term Obligation - 0.6% Repurchase agreement with State Street Bank & Trust Co., dated 03/31/04, due 04/01/04 at 0.960%, collateralized by a U.S. Treasury Note maturing 05/15/08, market value of $6,022,974 (repurchase proceeds $5,900,157) (Cost of $5,900,000) 5,900,000 5,900,000 ------------ TOTAL INVESTMENTS - 100.7% (COST OF $843,240,055) (c) 1,008,201,391 OTHER ASSETS & LIABILITIES, NET - (0.7%) (7,363,421) NET ASSETS - 100.0% 1,000,837,970 NOTES TO INVESTMENT PORTFOLIO: (a) Non-income producing. (b) This security is exempt from registration under Rule 144A of the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. At March 31, 2004, the value of this security amounted to $13,241,250 which represents 1.3% of net assets. (c) Cost for both financial statement and federal income tax purposes is the same. ACRONYM NAME ------- ---- ADR American Depositary Receipt GDR Global Depositary Receipt See Accompanying Notes to Financial Statements. 40 INVESTMENT PORTFOLIO____________________________________________________________ March 31, 2004 (Unaudited) Columbia Disciplined Value Fund Shares Value ($) ------------ ------------ COMMON STOCKS - 99.2% CONSUMER DISCRETIONARY - 12.4% AUTOMOBILES - 3.6% Ford Motor Co. 407,400 5,528,418 General Motors Corp. 208,300 9,810,930 ------------ Automobiles Total 15,339,348 LEISURE EQUIPMENT & PRODUCTS - 2.3% Brunswick Corp. 139,000 5,675,370 Mattel, Inc. 226,500 4,176,660 ------------ Leisure Equipment & Products Total 9,852,030 MEDIA - 3.2% Comcast Corp., Class A (a) 144,900 4,164,426 Regal Entertainment Group, Class A 155,700 3,422,286 Time Warner, Inc. (a) 356,300 6,007,218 ------------ Media Total 13,593,930 MULTILINE RETAIL - 1.7% Saks, Inc. (a) 186,500 3,282,400 Sears Roebuck and Co. 90,400 3,883,584 ------------ Multiline Retail Total 7,165,984 SPECIALTY RETAIL - 0.9% Toys `R' US, Inc. (a) 238,000 3,998,400 ------------ Specialty Retail Total 3,998,400 TEXTILES, APPAREL & LUXURY GOODS - 0.7% Jones Apparel Group, Inc. 84,200 3,043,830 ------------ Textiles, Apparel & Luxury Goods Total 3,043,830 ------------ CONSUMER DISCRETIONARY TOTAL 52,993,522 CONSUMER STAPLES - 8.8% BEVERAGES - 2.8% Coca-Cola Co. 239,900 12,066,970 ------------ Beverages Total 12,066,970 FOOD & STAPLES RETAILING - 1.3% Costco Wholesale Corp. (a) 58,800 2,208,528 Kroger Co. (a) 192,700 3,206,528 ------------ Food & Staples Retailing Total 5,415,056 FOOD PRODUCTS - 1.0% H.J. Heinz Co. 111,300 4,150,377 ------------ Food Products Total 4,150,377 HOUSEHOLD PRODUCTS - 0.9% Procter & Gamble Co. 38,300 4,016,904 ------------ Household Products Total 4,016,904 PERSONAL PRODUCTS - 2.8% Gillette Co. 307,700 12,031,070 ------------ Personal Products Total 12,031,070 ------------ CONSUMER STAPLES TOTAL 37,680,377 Shares Value ($) ------------ ------------ ENERGY - 10.9% OIL & GAS - 10.9% ChevronTexaco Corp. 203,000 17,819,340 Devon Energy Corp. 91,700 5,332,355 Exxon Mobil Corp. 505,400 21,019,586 Valero Energy Corp. 43,900 2,632,244 ------------ Oil & Gas Total 46,803,525 ------------ ENERGY TOTAL 46,803,525 FINANCIALS - 31.4% CAPITAL MARKETS - 5.4% A.G. Edwards, Inc. 100,000 3,912,000 J.P. Morgan Chase & Co. 344,300 14,443,385 Lehman Brothers Holdings, Inc. 55,400 4,590,998 ------------ Capital Markets Total 22,946,383 COMMERCIAL BANKS - 9.2% City National Corp. 55,300 3,312,470 Comerica, Inc. 160,400 8,712,928 Commerce Bancorp, Inc. 36,300 2,391,444 PNC Financial Services Group, Inc. 108,800 6,029,696 U.S. Bancorp 311,200 8,604,680 Wachovia Corp. 219,500 10,316,500 ------------ Commercial Banks Total 39,367,718 CONSUMER FINANCE - 0.9% MBNA Corp. 139,000 3,840,570 ------------ Consumer Finance Total 3,840,570 DIVERSIFIED FINANCIAL SERVICES - 5.0% Citigroup, Inc. 417,600 21,589,920 ------------ Diversified Financial Services Total 21,589,920 INSURANCE - 7.5% Allstate Corp. 51,200 2,327,552 Ambac Financial Group, Inc. 106,700 7,872,326 Chubb Corp. 152,800 10,625,712 First American Corp. 70,700 2,150,694 John Hancock Financial Services, Inc. 166,000 7,252,540 MBIA, Inc. 32,600 2,044,020 ------------ Insurance Total 32,272,844 REAL ESTATE - 1.4% Rayonier, Inc., REIT 133,697 5,843,896 ------------ Real Estate Total 5,843,896 THRIFTS & MORTGAGE FINANCE - 2.0% Freddie Mac 36,500 2,155,690 Washington Mutual, Inc. 147,200 6,286,912 ------------ Thrifts & Mortgage Finance 8,442,602 ------------ FINANCIALS TOTAL 134,303,933 See Accompanying Notes to Financial Statements. 41 ________________________________________________________________________________ March 31, 2004 (Unaudited) Columbia Disciplined Value Fund Shares Value ($) ------------ ------------ COMMON STOCKS - (CONTINUED) HEALTH CARE - 4.1% HEALTH CARE PROVIDERS & SERVICES - 1.3% CIGNA Corp. 94,400 5,571,488 ------------ Health Care Providers & Services Total 5,571,488 PHARMACEUTICALS - 2.8% Merck & Co., Inc. 220,900 9,761,571 Watson Pharmaceuticals, Inc. (a) 54,100 2,314,939 ------------ Pharmaceuticals Total 12,076,510 ------------ HEALTH CARE TOTAL 17,647,998 INDUSTRIALS - 7.1% AEROSPACE & DEFENSE - 2.8% Northrop Grumman Corp. 81,200 7,991,704 United Technologies Corp. 47,300 4,081,990 ------------ Aerospace & Defense Total 12,073,694 AIR FREIGHT & LOGISTICS - 1.2% FedEx Corp. 69,100 5,193,556 ------------ Air Freight & Logistics Total 5,193,556 COMMERCIAL SERVICES & SUPPLIES - 2.2% Cendant Corp. 386,600 9,429,174 ------------ Commerical Services & Supplies Total 9,429,174 INDUSTRIAL CONGLOMERATES - 0.9% Textron, Inc. 68,500 3,640,775 ------------ Industrial Conglomerates Total 3,640,775 ------------ INDUSTRIALS TOTAL 30,337,199 INFORMATION TECHNOLOGY - 5.8% COMPUTERS & PERIPHERALS - 4.0% Hewlett-Packard Co. 273,700 6,251,308 International Business Machines Corp. 118,500 10,883,040 ------------ Computers & Peripherals Total 17,134,348 ELECTRONIC EQUIPMENT & INSTRUMENTS - 0.6% Flextronics International Ltd. (a) 136,000 2,341,920 ------------ Electronic Equipment & Instruments Total 2,341,920 IT SERVICES - 0.6% Convergys Corp. (a) 161,700 2,457,840 ------------ IT Services Total 2,457,840 SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 0.6% Fairchild Semiconductor International, Inc. (a) 111,600 2,681,748 ------------ Semiconductors & Semiconductor Equipment Total 2,681,748 ------------ INFORMATION TECHNOLOGY TOTAL 24,615,856 Shares Value ($) ------------ ------------ MATERIALS - 6.4% CHEMICALS - 2.9% Monsanto Co. 230,400 8,448,768 Sigma-Aldrich Corp. 65,800 3,641,372 ------------ Chemicals Total 12,090,140 CONTAINERS & PACKAGING - 2.5% Smurfit-Stone Container Corp. (a) 175,700 3,090,563 Temple-Inland, Inc. 121,500 7,695,810 ------------ Containers & Packaging Total 10,786,373 METALS & MINING - 1.0% Southern Peru Copper Corp. 107,100 4,332,195 ------------ Metals & Mining Total 4,332,195 ------------ MATERIALS TOTAL 27,208,708 TELECOMMUNICATION SERVICES - 7.2% DIVERSIFIED TELECOMMUNICATION SERVICES - 7.2% BellSouth Corp. 509,600 14,110,824 SBC Communications, Inc. 687,800 16,878,612 ------------ Diversified Telecommunication Services Total 30,989,436 ------------ TELECOMMUNICATION SERVICES TOTAL 30,989,436 UTILITIES - 5.1% ELECTRIC UTILITIES - 5.1% American Electric Power Co., Inc. 67,900 2,235,268 Exelon Corp. 43,100 2,968,297 TECO Energy, Inc. 496,700 7,266,721 TXU Corp. 320,100 9,174,066 ------------ Electric Utilities Total 21,644,352 ------------ UTILITIES TOTAL 21,644,352 TOTAL COMMON STOCKS (Cost of $372,427,542) 424,224,906 Par ($) ------------ SHORT-TERM OBLIGATION - 0.7% Repurchase agreement with State Street Bank & Trust Co., dated 03/31/04, due 04/01/04 at 0.960%, collateralized by a U.S. Treasury Bond maturing 08/15/27, market value of $3,146,850 (repurchase proceeds $3,080,082) (Cost of $3,080,000) 3,080,000 3,080,000 ------------ See Accompanying Notes to Financial Statements. 42 ________________________________________________________________________________ March 31, 2004 (Unaudited) Columbia Disciplined Value Fund Value ($) ------------ TOTAL INVESTMENTS - 99.9% (COST OF $375,507,542) (b) 427,304,906 OTHER ASSETS & LIABILITIES, NET - 0.1% 272,004 NET ASSETS - 100.0% 427,576,910 NOTES TO INVESTMENT PORTFOLIO: (a) Non-income producing. (b) Cost for both financial statement and federal income tax purposes is the same. ACRONYM NAME ------- ---- REIT Real Estate Investment Trust See Accompanying Notes to Financial Statements. 43 INVESTMENT PORTFOLIO____________________________________________________________ March 31, 2004 (Unaudited) Columbia International Equity Fund Shares Value ($) ------------ ------------ COMMON STOCKS - 97.6% CONSUMER DISCRETIONARY - 16.0% AUTO COMPONENTS - 0.5% Continental AG 66,500 2,620,353 ------------ Auto Components Total 2,620,353 AUTOMOBILES - 2.7% Nissan Motor Co., Ltd. 372,000 4,155,727 Renault SA 55,941 3,879,189 Toyota Motor Corp. 144,800 5,387,390 ------------ Automobiles Total 13,422,306 HOTELS, RESTAURANTS & LEISURE - 2.8% Accor SA 103,140 4,184,686 Carnival Corp. 39,300 1,764,963 Compass Group PLC 728,550 4,815,601 InterContinental Hotels Group PLC 387,220 3,548,265 ------------ Hotels, Restaurants & Leisure Total 14,313,515 HOUSEHOLD DURABLES - 3.3% Koninklijke (Royal) Philips Electronics NV 254,021 7,355,434 Matsushita Electric Industrial Co., Ltd. 434,000 6,691,969 Sony Corp. 60,500 2,529,415 ------------ Household Durables Total 16,576,818 MEDIA - 3.8% Dentsu, Inc. 346 1,055,070 Dentsu, Inc. (a) 346 1,028,528 JC Decaux SA (a) 164,500 3,682,268 News Corp., Ltd. 262,200 2,363,641 Pearson PLC 314,500 3,586,429 Reuters Group PLC 382,300 2,727,829 United Business Media PLC 261,400 2,385,683 WPP Group PLC 219,000 2,222,815 ------------ Media Total 19,052,263 MULTILINE RETAIL - 1.1% Big C Supercenter Public Co., Ltd. 1,169,300 512,472 Seiyu Ltd. (a) 499,000 1,976,190 Takashimaya Co., Ltd. 260,000 2,907,034 ------------ Multiline Retail Total 5,395,696 SPECIALTY RETAIL - 1.5% Aoyama Trading Co., Ltd. 117,500 2,890,037 Nitori Co., Ltd. 38,150 2,564,429 USS Co., Ltd. 25,610 2,126,697 ------------ Specialty Retail Total 7,581,163 TEXTILES, APPAREL & LUXURY GOODS - 0.3% Sanyo Shokai Ltd. 165,000 1,257,851 ------------ Textiles, Apparel & Luxury Goods Total 1,257,851 ------------ CONSUMER DISCRETIONARY TOTAL 80,219,965 Shares Value ($) ------------ ------------ CONSUMER STAPLES - 5.9% BEVERAGES - 1.2% Diageo PLC 181,900 2,377,830 Pernod-Ricard SA 31,425 3,828,488 ------------ Beverages Total 6,206,318 FOOD & STAPLES RETAILING - 0.9% Casino Guichard-Perrachon SA 22,300 2,141,877 William Morrison Supermarkets PLC 526,742 2,430,379 ------------ Food & Staples Retailing Total 4,572,256 FOOD PRODUCTS - 1.4% Nestle SA, Registered Shares 26,915 6,866,668 ------------ Food Products Total 6,866,668 HOUSEHOLD PRODUCTS - 1.5% Reckitt Benckiser PLC 308,200 7,642,877 ------------ Household Products Total 7,642,877 PERSONAL PRODUCTS - 0.3% Oriflame Cosmetics SA, SDR (a) 44,100 1,242,707 ------------ Personal Products Total 1,242,707 TOBACCO - 0.6% Imperial Tobacco Group PLC 130,633 2,856,535 ------------ Tobacco Total 2,856,535 ------------ CONSUMER STAPLES TOTAL 29,387,361 ENERGY - 8.8% OIL & GAS - 8.8% BP PLC 1,788,890 15,040,089 EnCana Corp. 137,600 5,943,951 ENI S.p.A. 584,681 11,771,154 Norsk Hydro ASA 34,100 2,148,000 PTT Public Co., Ltd. 949,400 3,386,826 Total SA 32,680 6,008,270 ------------ Oil & Gas Total 44,298,290 ------------ ENERGY TOTAL 44,298,290 FINANCIALS - 23.9% COMMERCIAL BANKS - 12.6% Alpha Bank A.E. 121,600 3,744,016 Anglo Irish Bank Corp. PLC 149,600 2,360,132 Banco Popular di Verona e Novara 164,400 2,678,592 Banco Santander Central Hispano SA 311,400 3,391,397 Barclays PLC 644,100 5,691,377 Chinatrust Financial Holding Co., Ltd. 1,262,000 1,512,868 Credit Agricole SA 225,670 5,901,325 Credit Suisse Group 100,150 3,472,679 Erste Bank der oesterreichen Sparkassen AG 27,830 4,171,356 Hansabank Ltd. 86,849 2,757,410 Kookmin Bank, ADR 89,900 3,637,354 See Accompanying Notes to Financial Statements. 44 ________________________________________________________________________________ March 31, 2004 (Unaudited) Columbia International Equity Fund Shares Value ($) ------------ ------------ COMMON STOCKS - (CONTINUED) FINANCIALS - (CONTINUED) COMMERCIAL BANKS - (CONTINUED) Royal Bank of Scotland Group PLC 243,545 7,445,017 Siam Commercial Bank Public Co., Ltd. 3,656,200 4,145,774 Societe Generale 26,000 2,223,693 Standard Chartered Ltd., PLC 145,098 2,437,147 UFJ Holdings, Inc. 1,248 7,922,290 ------------ Commercial Banks Total 63,492,427 DIVERSIFIED FINANCIAL SERVICES - 1.9% ING Groep NV 236,900 5,212,539 Nomura Holdings, Inc. 238,000 4,324,783 ------------ Diversified Financial Services Total 9,537,322 INSURANCE - 4.8% Allianz AG, Registered Shares 61,210 6,674,548 Daido Life Insurance Co., Ltd. 605 2,465,599 Irish Life & Permanent PLC 204,800 3,362,037 Millea Holdings, Inc. 571 8,870,115 Mitsui Sumitomo Insurance Co., Ltd. 235,000 2,496,812 ------------ Insurance Total 23,869,111 REAL ESTATE - 4.6% Land and Houses Public Co., Ltd., NVDR 7,799,500 2,305,369 Mitsubishi Estates Co., Ltd. 775,000 10,485,928 Sumitomo Realty & Development Co., Ltd. 281,000 3,645,711 Sun Hung Kai Properties Ltd. 755,000 6,902,962 ------------ Real Estate Total 23,339,970 ------------ FINANCIALS TOTAL 120,238,830 HEALTH CARE - 8.4% HEALTH CARE EQUIPMENT & SUPPLIES - 2.3% Nobel Biocare AG 8,965 1,232,108 Phonak Holding AG, Registered Shares 60,300 1,452,668 ResMed, Inc. (a) 16,500 745,635 Smith & Nephew PLC 847,092 8,363,576 ------------ Health Care Equipment & Supplies Total 11,793,987 PHARMACEUTICALS - 6.1% AstraZeneca PLC 77,700 3,614,433 Chugai Pharmaceutical Co., Ltd. 337,100 5,353,000 Dr. Reddy's Laboratories Ltd., ADR 117,900 2,823,705 GlaxoSmithKline PLC 390,284 7,685,178 Novartis AG, Registered Shares 106,340 4,518,852 Takeda Chemical Industries Ltd. 68,600 3,052,251 Teva Pharmaceutical Industries Ltd., ADR 53,900 3,417,799 ------------ Pharmaceuticals Total 30,465,218 ------------ HEALTH CARE TOTAL 42,259,205 Shares Value ($) ------------ ------------ INDUSTRIALS - 8.4% BUILDING PRODUCTS - 0.5% Wienerberger AG 78,200 2,598,288 ------------ Building Products Total 2,598,288 COMMERCIAL SERVICES & SUPPLIES - 1.2% Capital Group PLC 443,800 2,552,959 Randstad Holding NV 134,400 3,589,019 ------------ Commercial Services & Supplies Total 6,141,978 CONSTRUCTION & ENGINEERING - 1.1% Shimizu Corp. 551,000 3,001,084 Taisei Corp. 646,000 2,725,608 ------------ Construction & Engineering Total 5,726,692 ELECTRICAL EQUIPMENT - 1.5% Nitto Denko Corp. 44,800 2,457,266 Siemens AG, Registered Shares 64,463 4,765,241 ------------ Electrical Equipment Total 7,222,507 INDUSTRIAL CONGLOMERATES - 0.9% Burberry Group PLC 468,900 3,084,226 NIWS Co., Ltd. 420 1,284,749 ------------ Industrial Conglomerates Total 4,368,975 MACHINERY - 1.0% Atlas Copco AB, Class B 79,000 2,577,112 Linde AG 48,500 2,571,787 ------------ Machinery Total 5,148,899 ROAD & RAIL - 0.6% Tokyu Corp. 456,000 2,850,957 ------------ Road & Rail Total 2,850,957 TRADING COMPANIES & DISTRIBUTORS - 0.8% Mitsubishi Corp. 351,000 4,139,905 ------------ Trading Companies & Distributors Total 4,139,905 TRANSPORTATION INFRASTRUCTURE - 0.8% BAA PLC 413,199 3,923,453 ------------ Transportation Infrastructure Total 3,923,453 ------------ INDUSTRIALS TOTAL 42,121,654 INFORMATION TECHNOLOGY - 10.3% COMMUNICATIONS EQUIPMENT - 0.4% Nortel Networks Corp. (a) 325,500 1,912,299 ------------ Communications Equipment Total 1,912,299 COMPUTERS & PERIPHERALS - 0.3% Acer, Inc. 977,000 1,512,200 ------------ Computers & Peripherals Total 1,512,200 ELECTRONIC EQUIPMENT & INSTRUMENTS - 3.7% Celestica, Inc. (a) 128,200 2,085,625 Epcos AG (a) 98,500 2,235,187 Flextronics International Ltd. (a) 126,800 2,183,496 See Accompanying Notes to Financial Statements. 45 ________________________________________________________________________________ March 31, 2004 (Unaudited) Columbia International Equity Fund Shares Value ($) ------------ ------------ COMMON STOCKS - (CONTINUED) INFORMATION TECHNOLOGY - (CONTINUED) ELECTRONIC EQUIPMENT & INSTRUMENTS - (CONTINUED) Hon Hai Precision Industry Co., Ltd. 340,000 1,470,410 Hoya Corp. 25,700 2,501,366 Keyence Corp. 18,800 4,571,779 TDK Corp. 49,400 3,765,930 ------------ Electronic Equipment & Instruments Total 18,813,793 INTERNET SOFTWARE & SERVICES - 0.4% Index Corp. 368 2,025,526 ------------ Internet Software & Services Total 2,025,526 IT SERVICES - 0.8% Indra Sistemas SA 194,900 2,547,142 TIS, Inc. 27,300 1,240,850 ------------ IT Services Total 3,787,992 OFFICE ELECTRONICS - 0.9% Canon, Inc. 88,000 4,548,305 ------------ Office Electronics Total 4,548,305 SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 3.2% ARM Holdings PLC 930,800 2,042,233 Nikon Corp. 124,000 1,646,833 Samsung Electronics Co., Ltd. 18,891 9,453,764 Taiwan Semiconductor Manufacturing Co., Ltd., ADR (a) 281,640 2,940,322 ------------ Semiconductors & Semiconductor Equipment Total 16,083,152 SOFTWARE - 0.6% Dassault Systemes SA 74,900 3,115,410 ------------ Software Total 3,115,410 ------------ INFORMATION TECHNOLOGY TOTAL 51,798,677 MATERIALS - 6.3% CHEMICALS - 3.1% BASF AG 70,200 3,570,420 MG Technologies AG 171,500 2,401,724 Shin-Etsu Chemical Co., Ltd. 57,700 2,423,417 Syngenta AG 68,702 5,014,071 Yara International ASA (a) 261,600 1,899,605 ------------ Chemicals Total 15,309,237 CONSTRUCTION MATERIALS - 1.4% Siam Cement Public Co., Ltd., NVDR (a) 1,186,350 6,831,828 ------------ Construction Materials Total 6,831,828 Shares Value ($) ------------ ------------ METALS & MINING - 0.5% BHP Billiton Ltd. 273,166 2,562,835 ------------ Metals & Mining Total 2,562,835 PAPER & FOREST PRODUCTS - 1.3% Stora Enso Oyj, Class R 330,450 4,164,113 UPM Kymmene Oyj 139,800 2,563,363 ------------ Paper & Forest Products Total 6,727,476 ------------ MATERIALS TOTAL 31,431,376 TELECOMMUNICATION SERVICES - 7.7% DIVERSIFIED TELECOMMUNICATION SERVICES - 3.7% France Telecom SA (a) 142,800 3,658,691 Nippon Telegraph & Telephone Corp. 459 2,596,826 Portugal Telecom SGPS SA, Registered Shares 239,280 2,679,567 Telecom Italia S.p.A. (a) 1,453,703 4,561,762 Telefonica SA 326,620 4,947,862 ------------ Diversified Telecommunication Services Total 18,444,708 WIRELESS TELECOMMUNICATION SERVICES - 4.0% NTT DoCoMo, Inc. 1,872 4,128,686 Telefonaktiebolaget LM Ericsson SP, ADR (a) 136,700 3,793,425 VimpelCom, ADR (a) 27,800 2,890,922 Vodafone Group PLC 4,059,800 9,637,265 ------------ Wireless Telecommunication Services Total 20,450,298 ------------ TELECOMMUNICATION SERVICES TOTAL 38,895,006 UTILITIES - 1.9% ELECTRIC UTILITIES - 1.9% E.ON AG 36,600 2,414,141 National Grid Transco PLC 609,600 4,832,984 Public Power Corp. 96,400 2,424,793 ------------ Electric Utilities Total 9,671,918 ------------ UTILITIES TOTAL 9,671,918 TOTAL COMMON STOCKS (Cost of $402,423,529) 490,322,282 PREFERRED STOCK - 0.5% CONSUMER DISCRETIONARY - 0.5% MEDIA - 0.5% Prosieben SAT.1 Media AG (Cost of $2,229,174) 137,500 2,724,240 ------------ See Accompanying Notes to Financial Statements. 46 ________________________________________________________________________________ March 31, 2004 (Unaudited) Columbia International Equity Fund Par ($) Value ($) ------------ ------------ SHORT-TERM OBLIGATION - 1.6% Repurchase agreement with State Street Bank & Trust Co., dated 03/31/04, due 04/01/04 at 0.960%, collateralized by a U.S. Treasury Bond maturing 11/15/26, market value of $8,050,573 (repurchase proceeds $7,889,210) (Cost of $7,889,000) 7,889,000 7,889,000 ------------ TOTAL INVESTMENTS - 99.7% (COST OF $412,541,703) (b) 500,935,522 OTHER ASSETS & LIABILITIES, NET - 0.3% 1,540,779 NET ASSETS - 100.0% 502,476,301 NOTES TO INVESTMENT PORTFOLIO: (a) Non-income producing. (b) Cost for both financial statement and federal income tax purposes is the same. SUMMARY OF SECURITIES % OF TOTAL BY COUNTRY VALUE INVESTMENTS ------------------------ ------------ ----------- Japan $129,095,913 25.8% United Kingdom 110,944,180 22.1 France 38,623,897 7.7 Germany 29,977,641 6.0 Switzerland 22,557,046 4.5 Italy 19,011,508 3.8 Thailand 17,182,269 3.4 Netherlands 16,156,992 3.2 South Korea 13,091,118 2.6 Spain 10,886,401 2.2 Canada 9,941,875 2.0 United States 8,634,635 1.7 Taiwan 7,435,800 1.5 Hong Kong 6,902,962 1.4 Austria 6,769,644 1.4 Finland 6,727,476 1.3 Sweden 6,370,537 1.3 Greece 6,168,809 1.2 Ireland 5,722,169 1.1 Australia 4,926,476 1.0 Norway 4,047,605 0.8 Israel 3,417,799 0.7 Russia 2,890,922 0.6 India 2,823,705 0.6 Estonia 2,757,410 0.6 Portugal 2,679,567 0.5 Singapore 2,183,496 0.4 Panama 1,764,963 0.4 Luxembourg 1,242,707 0.2 ------------ ----------- Total $500,935,522 100.0% ============ =========== Certain securities are listed by country of underlying exposure but may trade predominately on other exchanges. ACRONYM NAME ------- ---- ADR American Depositary Receipt NVDR Non-Voting Depositary Receipt SDR Swedish Depositary Receipt See Accompanying Notes to Financial Statements. 47 INVESTMENT PORTFOLIO____________________________________________________________ March 31, 2004 (Unaudited) Columbia Large Cap Core Fund Shares Value ($) ------------ ------------ COMMON STOCKS - 99.1% CONSUMER DISCRETIONARY - 13.9% HOTELS, RESTAURANTS & LEISURE - 1.0% Yum! Brands, Inc. (a) 114,600 4,353,654 ------------ Hotels, Restaurants & Leisure Total 4,353,654 HOUSEHOLD DURABLES - 1.2% Sony Corp., ADR 120,000 5,017,200 ------------ Household Durables Total 5,017,200 MEDIA - 6.6% Comcast Corp., Class A (a) 186,500 5,360,010 Fox Entertainment Group, Inc., Class A (a) 198,700 5,384,770 Liberty Media Corp., Class A (a) 541,908 5,933,893 Viacom, Inc., Class A 305,500 11,978,655 ------------ Media Total 28,657,328 MULTILINE RETAIL - 1.2% Family Dollar Stores, Inc. 144,500 5,194,775 ------------ Multiline Retail Total 5,194,775 SPECIALTY RETAIL - 3.9% Abercrombie & Fitch Co., Class A 185,000 6,260,400 Best Buy Co, Inc. 112,000 5,792,640 Staples, Inc. (a) 199,800 5,072,922 ------------ Specialty Retail Total 17,125,962 ------------ CONSUMER DISCRETIONARY TOTAL 60,348,919 CONSUMER STAPLES - 8.6% BEVERAGES - 2.9% PepsiCo, Inc. 232,000 12,493,200 ------------ Beverages Total 12,493,200 FOOD & STAPLES RETAILING - 2.0% Costco Wholesale Corp. (a) 87,400 3,282,744 Wal-Mart Stores, Inc. 93,190 5,562,511 ------------ Food & Staples Retailing Total 8,845,255 HOUSEHOLD PRODUCTS - 3.2% Colgate-Palmolive Co. 79,900 4,402,490 Procter & Gamble Co. 89,000 9,334,320 ------------ Household Products Total 13,736,810 PERSONAL PRODUCTS - 0.5% Avon Products, Inc. 27,900 2,116,773 ------------ Personal Products Total 2,116,773 ------------ CONSUMER STAPLES TOTAL 37,192,038 ENERGY - 5.6% ENERGY EQUIPMENT & SERVICES - 1.1% Baker Hughes, Inc. 134,074 4,891,019 ------------ Energy Equipment & Services Total 4,891,019 Shares Value ($) ------------ ------------ OIL & GAS - 4.5% ConocoPhillips 119,000 8,307,390 Exxon Mobil Corp. 217,000 9,025,030 Royal Dutch Petroleum Co., N.Y. Registered Shares 45,660 2,172,503 ------------ Oil & Gas Total 19,504,923 ------------ ENERGY TOTAL 24,395,942 FINANCIALS - 20.0% CAPITAL MARKETS - 3.6% Bank of New York Co., Inc. 101,900 3,209,850 E*TRADE Financial Corp. (a) 255,200 3,406,920 Merrill Lynch & Co., Inc. 148,070 8,819,049 ------------ Capital Markets Total 15,435,819 COMMERCIAL BANKS - 5.6% Fifth Third Bancorp 39,200 2,170,504 SouthTrust Corp. 68,760 2,280,082 U.S. Bancorp 148,200 4,097,730 Wachovia Corp. 157,100 7,383,700 Wells Fargo & Co. 143,000 8,103,810 ------------ Commercial Banks Total 24,035,826 CONSUMER FINANCE - 1.5% MBNA Corp. 241,100 6,661,593 ------------ Consumer Finance Total 6,661,593 DIVERSIFIED FINANCIAL SERVICES - 2.0% Citigroup, Inc. 169,600 8,768,320 ------------ Diversified Financial Services Total 8,768,320 INSURANCE - 5.9% AFLAC, Inc. 124,173 4,984,304 Hartford Financial Services Group, Inc. 74,000 4,713,800 MetLife, Inc. 126,770 4,523,154 Travelers Property Casualty Corp., Class A 207,080 3,551,422 Willis Group Holdings Ltd. 64,000 2,380,800 XL Capital Ltd. 71,000 5,398,840 ------------ Insurance Total 25,552,320 THRIFTS & MORTGAGE FINANCE - 1.4% Fannie Mae 81,400 6,052,090 ------------ Thrifts & Mortgage Finance Total 6,052,090 ------------ FINANCIALS TOTAL 86,505,968 HEALTH CARE - 14.3% BIOTECHNOLOGY - 0.7% Gilead Sciences, Inc. (a) 38,000 2,119,260 Invitrogen Corp. (a) 17,075 1,224,107 ------------ Biotechnology Total 3,343,367 See Accompanying Notes to Financial Statements. 48 ________________________________________________________________________________ March 31, 2004 (Unaudited) Columbia Large Cap Core Fund Shares Value ($) ------------ ------------ COMMON STOCKS - (CONTINUED) HEALTH CARE - (CONTINUED) HEALTH CARE EQUIPMENT & SUPPLIES - 1.9% Alcon, Inc. 34,900 2,209,170 Medtronic, Inc. 125,000 5,968,750 ------------ Health Care Equipment & Supplies Total 8,177,920 HEALTH CARE PROVIDERS & SERVICES - 3.2% Anthem, Inc. (a) 74,600 6,761,744 Caremark Rx, Inc. (a) 213,100 7,085,575 ------------ Health Care Providers & Services Total 13,847,319 PHARMACEUTICALS - 8.5% Allergan, Inc. 49,600 4,174,336 GlaxoSmithKline PLC, ADR 68,160 2,722,992 Johnson & Johnson Co. 82,980 4,208,746 Pfizer, Inc. 505,000 17,700,250 Teva Pharmaceutical Industries Ltd., ADR 77,000 4,882,570 Watson Pharmaceuticals, Inc. (a) 71,300 3,050,927 ------------ Pharmaceuticals Total 36,739,821 ------------ HEALTH CARE TOTAL 62,108,427 INDUSTRIALS - 11.6% AEROSPACE & DEFENSE - 2.2% United Technologies Corp. 111,860 9,653,518 ------------ Aerospace & Defense Total 9,653,518 AIR FREIGHT & LOGISTICS - 1.1% FedEx Corp. 64,300 4,832,788 ------------ Air Freight & Logistics Total 4,832,788 BUILDING PRODUCTS - 1.1% Masco Corp. 154,900 4,715,156 ------------ Building Products Total 4,715,156 COMMERCIAL SERVICES & SUPPLIES - 1.3% Avery Dennison Corp. 35,000 2,177,350 Cendant Corp. 142,500 3,475,575 ------------ Commerical Services & Supplies Total 5,652,925 INDUSTRIAL CONGLOMERATES - 1.5% General Electric Co. 211,404 6,452,050 ------------ Industrial Conglomerates Total 6,452,050 MACHINERY - 3.8% Federal Signal Corp. 139,757 2,774,176 Flowserve Corp. (a) 70,000 1,466,500 Ingersoll-Rand Co., Class A 66,620 4,506,843 PACCAR, Inc. 91,200 5,129,088 Timken Co. 109,753 2,549,562 ------------ Machinery Total 16,426,169 Shares Value ($) ------------ ------------ TRADING COMPANIES & DISTRIBUTORS - 0.6% MSC Industrial Direct Co., Inc., Class A 85,287 2,554,346 ------------ Trading Companies & Distributors Total 2,554,346 ------------ INDUSTRIALS TOTAL 50,286,952 INFORMATION TECHNOLOGY - 20.1% COMMUNICATIONS EQUIPMENT - 2.6% Avaya, Inc. (a) 139,900 2,221,612 Cisco Systems, Inc. (a) 389,100 9,151,632 ------------ Communications Equipment Total 11,373,244 COMPUTERS & PERIPHERALS - 2.1% Lexmark International, Inc. (a) 99,781 9,179,852 ------------ Computers & Peripherals Total 9,179,852 ELECTRONIC EQUIPMENT & INSTRUMENTS - 1.5% Agilent Technologies, Inc. (a) 63,200 1,999,016 Flextronics International Ltd. (a) 246,130 4,238,359 ------------ Electronic Equipment & Instruments Total 6,237,375 IT SERVICES - 1.7% Accenture Ltd. (a) 287,600 7,132,480 ------------ IT Services Total 7,132,480 SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 6.5% Altera Corp. (a) 85,300 1,744,385 Analog Devices, Inc. 164,045 7,875,800 KLA-Tencor Corp. (a) 58,800 2,960,580 Marvell Technology Group Ltd. (a) 85,100 3,833,755 Maxim Integrated Products, Inc. 104,005 4,897,595 Taiwan Semiconductor Manufacturing Co., Ltd., ADR (a) 654,600 6,834,024 ------------ Semiconductors & Semiconductor Equipment Total 28,146,139 SOFTWARE - 5.7% Microsoft Corp. 645,000 16,105,650 Symantec Corp. (a) 109,725 5,080,267 VERITAS Software Corp. (a) 132,100 3,554,811 ------------ Software Total 24,740,728 ------------ INFORMATION TECHNOLOGY TOTAL 86,809,818 MATERIALS - 4.0% CONTAINERS & PACKAGING - 0.5% Smurfit-Stone Container Corp. (a) 124,400 2,188,196 ------------ Containers & Packaging Total 2,188,196 METALS & MINING - 1.9% Companhia Vale do Rio Doce, ADR 105,152 4,926,371 Rio Tinto PLC, ADR 31,000 3,117,980 ------------ Metals & Mining Total 8,044,351 See Accompanying Notes to Financial Statements. 49 ________________________________________________________________________________ March 31, 2004 (Unaudited) Columbia Large Cap Core Fund Shares Value ($) ------------ ------------ COMMON STOCKS - (CONTINUED) MATERIALS - (CONTINUED) PAPER & FOREST PRODUCTS - 1.6% Aracruz Celulose SA, ADR 35,000 1,338,750 Weyerhaeuser Co. 86,000 5,633,000 ------------ Paper & Forest Products Total 6,971,750 ------------ MATERIALS TOTAL 17,204,297 UTILITIES - 1.0% ELECTRIC UTILITIES - 1.0% FirstEnergy Corp. 114,860 4,488,729 ------------ Electric Utilities Total 4,488,729 ------------ UTILITIES TOTAL 4,488,729 TOTAL COMMON STOCKS (Cost of $395,445,570) 429,341,090 TOTAL INVESTMENTS - 99.1% (COST OF $395,445,570) (b) 429,341,090 OTHER ASSETS & LIABILITIES, NET - 0.9% 3,739,754 NET ASSETS - 100.0% 433,080,844 NOTES TO INVESTMENT PORTFOLIO: (a) Non-income producing. (b) Cost for both financial statement and federal income tax purposes is the same. ACRONYM NAME ------- ---- ADR American Depositary Receipt See Accompanying Notes to Financial Statements. 50 INVESTMENT PORTFOLIO____________________________________________________________ March 31, 2004 (Unaudited) Columbia Small Cap Fund Shares Value ($) ------------ ------------ COMMON STOCKS - 88.1% CONSUMER DISCRETIONARY - 21.9% AUTO COMPONENTS - 1.2% Cooper Tire & Rubber Co. 300,670 6,058,501 Keystone Automotive Industries, Inc. (a) 225,000 6,156,000 R&B, Inc. (a) 203,883 3,751,447 Sauer-Danfoss, Inc. 271,900 3,716,873 ------------ Auto Components Total 19,682,821 HOTELS, RESTAURANTS & LEISURE - 5.2% Buca, Inc. (a) 450,000 2,812,500 CEC Entertainment, Inc. (a) 217,230 7,537,881 Checkers Drive-In Restaurant, Inc. (a)(b) 607,900 7,385,985 Famous Dave's of America, Inc. (a) 397,500 3,092,152 Friendly Ice Cream Corp. (a) 230,000 3,553,500 Gaylord Entertainment Co. (a) 253,000 7,817,700 Jack in the Box, Inc. (a) 353,900 8,836,883 Navigant International, Inc. (a) 325,000 5,850,000 O'Charleys, Inc. (a) 627,005 11,442,841 Rare Hospitality International, Inc. (a) 125,000 3,468,750 Ruby Tuesday, Inc. 210,500 6,767,575 Ryan's Family Steak Houses, Inc. (a) 418,650 7,163,102 Steak N Shake Co. (a) 96,200 1,851,850 Entertainment Restaurant Corp. (a) 313,336 4,371,037 ------------ Hotels, Restaurants & Leisure Total 81,951,756 HOUSEHOLD DURABLES - 1.5% Bassett Furniture Industries, Inc. 138,850 2,753,396 Kimball International, Inc., Class B 127,400 1,996,358 Rayovac Corp. (a) 316,100 9,040,460 Topps Co., Inc. 268,900 2,567,995 Yankee Candle Co., Inc. (a) 275,400 7,595,532 ------------ Household Durables Total 23,953,741 INTERNET & CATALOG RETAIL - 0.5% Alloy, Inc. (a) 1,227,100 5,890,080 Valuevision Media, Inc., Class A (a) 98,600 1,513,510 ------------ Internet & Catalog Retail Total 7,403,590 LEISURE EQUIPMENT & PRODUCTS -0.9% Callaway Golf Co. 252,400 4,790,552 RC2 Corp. (a) 346,400 9,526,000 ------------ Leisure Equipment & Products Total 14,316,552 MEDIA - 3.6% ADVO, Inc. 360,699 11,621,722 Catalina Marketing Corp. (a) 341,800 6,627,502 Journal Communications, Inc., Class A 179,400 3,588,000 Journal Register Co., (a) 367,500 7,680,750 Paxson Communications Corp. (a) 1,275,400 4,974,060 Pulitzer, Inc. 144,200 6,957,650 Regent Communications, Inc. (a) 401,600 2,614,416 Scholastic Corp. (a) 221,000 6,022,250 Sinclair Broadcast Group, Inc., Class A (a) 263,100 3,288,750 Young Broadcasting, Inc., Class A (a) 209,400 3,790,140 ------------ Media Total 57,165,240 Shares Value ($) ------------ ------------ SPECIALTY RETAIL - 6.4% AC Moore Arts & Crafts, Inc. (a) 175,000 4,725,000 American Eagle Outfitters (a) 308,800 8,325,248 Blue Rhino Corp. (a) 306,700 5,195,498 Buckle, Inc. 349,900 10,133,104 Dress Barn, Inc. (a) 246,400 4,321,856 Gaiam, Inc. (a) 159,100 886,187 Gymboree Corp. (a) 499,500 8,376,615 Hancock Fabrics, Inc. 303,800 4,827,382 InterTAN, Inc. (a) 623,850 8,715,184 Lithia Motors, Inc., Class A 314,300 8,690,395 Monro Muffler Brake, Inc. (a) 198,200 4,953,018 Party City Corp. (a) 276,800 4,121,552 Regis Corp. 150,000 6,666,000 Rent-A-Center, Inc. (a) 167,750 5,534,072 Rush Enterprises, Inc., Class A (a) 150,000 1,740,000 Rush Enterprises, Inc., Class B (a) 150,000 1,725,000 Stage Stores, Inc. (a) 83,000 3,211,270 Stein Mart, Inc. (a) 303,900 4,193,820 Wet Seal, Inc., Class A (a) 458,700 3,784,275 Wilsons The Leather Experts, Inc. (a) 359,900 1,004,121 ------------ Specialty Retail Total 101,129,597 TEXTILES, APPAREL & LUXURY GOODS - 2.6% Phillips-Van Heusen Corp. 311,900 5,770,150 Quiksilver, Inc. (a) 407,200 8,897,320 Rocky Shoes & Boots, Inc. (a) 68,500 1,657,700 Tommy Hilfiger Corp. (a) 400,900 6,815,300 Unifirst Corp. (b) 472,800 13,039,824 Vans, Inc. (a) 320,700 4,746,360 ------------ Textiles, Apparel & Luxury Goods Total 40,926,654 ------------ CONSUMER DISCRETIONARY TOTAL 346,529,951 CONSUMER STAPLES - 1.6% FOOD & STAPLES RETAILING - 0.7% Casey's General Stores, Inc. 316,570 5,255,062 Ingles Markets, Inc., Class A 81,100 868,338 United Natural Foods, Inc. (a) 55,900 2,688,231 Wild Oats Markets, Inc. (a) 239,100 2,828,553 ------------ Food & Staples Retailing Total 11,640,184 FOOD PRODUCTS - 0.9% Corn Products International, Inc. 145,800 5,832,000 Delta & Pine Land Co. 318,200 7,939,090 ------------ Food Products Total 13,771,090 ------------ CONSUMER STAPLES TOTAL 25,411,274 ENERGY - 5.1% ENERGY EQUIPMENT & SERVICES - 2.2% Atwood Oceanics, Inc. (a) 181,500 6,459,585 Core Laboratories NV (a) 130,300 2,762,360 Gulfmark Offshore, Inc. (a) 541,200 8,502,252 Newpark Resources, Inc. (a) 831,000 4,321,200 Oceaneering International, Inc. (a) 201,100 6,123,495 See Accompanying Notes to Financial Statements. 51 ________________________________________________________________________________ March 31, 2004 (Unaudited) Columbia Small Cap Fund Shares Value ($) ------------ ------------ COMMON STOCKS - (CONTINUED) ENERGY - (CONTINUED) ENERGY EQUIPMENT & SERVICES - (CONTINUED) Offshore Logistics, Inc. (a) 100,000 2,305,000 Oil States International, Inc. (a) 194,500 2,614,080 Pride International, Inc. (a) 100,200 1,709,412 ------------ Energy Equipment & Services Total 34,797,384 OIL & GAS - 2.9% Brown (Tom), Inc. (a) 258,100 9,704,560 Cimarex Energy Co. (a) 184,900 5,343,610 Houston Exploration Co. (a) 235,400 10,529,442 Plains Exploration & Production Co. (a) 84,245 1,570,327 Southwestern Energy Co. (a) 282,400 6,811,488 Vintage Petroleum, Inc. 263,600 3,864,376 Whiting Petroleum Corp. (a) 320,200 7,553,518 ------------ Oil & Gas Total 45,377,321 ------------ ENERGY TOTAL 80,174,705 FINANCIALS - 8.0% COMMERCIAL BANKS - 2.2% First Niagara Financial Group, Inc. 465,500 6,354,075 Hanmi Financial Corp. 32,398 861,463 Matrix Bancorp, Inc. (a) 227,400 2,580,990 Oriental Financial Group 360,537 11,483,103 Republic Bancorp, Inc. 269,937 3,795,314 Riggs National Corp. 61,300 1,054,973 Taylor Capital Group, Inc. 129,628 2,987,925 Willow Grove Bancorp, Inc. 272,000 4,868,800 ------------ Commercial Banks Total 33,986,643 CONSUMER FINANCE - 0.3% Rewards Network, Inc. (a) 440,100 4,401,000 ------------ Consumer Finance Total 4,401,000 DIVERSIFIED FINANCIAL SERVICES - 0.5% Jefferson Bancshares, Inc. 216,400 3,018,780 Kirkland's, Inc. (a) 335,000 5,470,550 ------------ Diversified Financial Services Total 8,489,330 INSURANCE - 2.6% AmerUs Group Co. 158,320 6,388,212 Bristol West Holdings, Inc. (a) 256,100 5,224,440 Direct General Corp. 150,100 5,433,620 Horace Mann Educators Corp. 251,200 3,948,864 Hub International Ltd. 49,500 908,325 Navigators Group, Inc. (a) 152,800 4,397,584 NYMAGIC, Inc. 105,000 2,656,500 Ohio Casualty Corp. (a) 295,600 5,909,044 Phoenix Companies, Inc. 199,900 2,680,659 PICO Holdings, Inc. (a) 38,300 629,269 Presidential Life Corp. 140,100 2,098,698 United Fire & Casualty Co. (a) 38,038 1,607,828 ------------ Insurance Total 41,883,043 Shares Value ($) ------------ ------------ REAL ESTATE - 1.3% Corporate Office Properties Trust, Inc., REIT 79,200 1,980,000 First Potomac Realty Trust 330,500 6,907,450 Healthcare Realty Trust, Inc., REIT 43,050 1,838,235 Innkeepers USA Trust, Inc., REIT 326,500 2,984,210 Kilroy Realty Corp., REIT 59,000 2,094,500 Medical Office Properties, Inc. (a)(c) 277,825 4,695,242 ------------ Real Estate Total 20,499,637 THRIFTS & MORTGAGE FINANCE - 1.1% Anchor BanCorp Wisconsin, Inc. 157,400 4,021,570 Dime Community Bancshares 283,200 5,763,120 Webster Financial Corp. 145,900 7,398,589 ------------ Thrifts & Mortgage Finance Total 17,183,279 ------------ FINANCIALS TOTAL 126,442,932 HEALTH CARE - 12.4% BIOTECHNOLOGY - 1.5% BioMarin Pharmaceuticals, Inc. (a) 227,950 1,714,184 CV Therapeutics, Inc. (a) 184,200 2,786,946 Lifecell Corp. (a) 600,000 4,920,000 PRAECIS Pharmaceuticals, Inc. (a) 507,100 2,996,961 Serologicals Corp. (a) 437,100 8,916,840 Strategic Diagnostics, Inc. (a) 700,000 2,765,000 ------------ Biotechnology Total 24,099,931 HEALTH CARE EQUIPMENT & SUPPLIES - 5.3% Analogic Corp. 158,700 7,219,263 Cytyc Corp. (a) 322,500 7,175,625 Datascope Corp. 163,250 5,736,605 Haemonetics Corp. (a) 197,000 6,195,650 Immucor, Inc. (a) 336,950 6,105,534 Invacare Corp. 453,300 20,461,962 Lifecore Biomedical, Inc. (a) 300,300 2,252,250 STAAR Surgical Co. (a) 530,600 4,759,482 SurModics, Inc. (a) 100,000 1,991,000 Thoratec Corp. (a) 749,200 9,357,508 West Pharmaceutical Services, Inc. 316,000 11,818,400 ------------ Health Care Equipment & Supplies Total 83,073,279 HEALTH CARE PROVIDERS & SERVICES - 4.6% Amsurg Corp. (a) 150,000 3,406,500 Beverly Enterprises, Inc. (a) 628,500 4,022,400 LabOne, Inc. (a) 182,300 5,541,920 Pediatrix Medical Group, Inc. (a) 134,200 8,454,600 Priority Healthcare Corp. (a) 316,975 6,748,398 Proxymed, Inc. (a) 100,000 1,904,000 PSS World Medical, Inc. (a) 590,700 6,609,933 Psychiatric Solutions, Inc. (a) 215,700 4,044,375 Res-Care, Inc. (a) 899,125 11,490,818 Select Medical Corp. 470,000 7,849,000 Symbion, Inc. (a) 17,700 321,432 Triad Hospitals, Inc. (a) 297,400 9,165,868 U.S. Physical Therapy, Inc. (a) 273,200 3,770,160 ------------ Health Care Providers & Services Total 73,329,404 See Accompanying Notes to Financial Statements. 52 ________________________________________________________________________________ March 31, 2004 (Unaudited) Columbia Small Cap Fund Shares Value ($) ------------ ------------ COMMON STOCKS - (CONTINUED) HEALTH CARE - (CONTINUED) PHARMACEUTICALS - 1.0% Acusphere, Inc. (a) 344,500 2,876,575 Valeant Pharmaceuticals International 517,226 12,346,185 ------------ Pharmaceuticals Total 15,222,760 ------------ HEALTH CARE TOTAL 195,725,374 INDUSTRIALS - 17.3% AEROSPACE & DEFENSE - 1.5% Armor Holdings, Inc. (a) 473,765 15,681,622 Kaman Corp., Class A 45,700 682,301 Ladish Co., Inc. (a) 276,300 2,425,914 Moog, Inc., Class A (a) 156,000 5,322,720 ------------ Aerospace & Defense Total 24,112,557 AIR FREIGHT & LOGISTICS - 0.8% AirNet Systems, Inc. (a) 365,100 1,803,594 J.B. Hunt Transport Services, Inc. (a) 139,200 3,921,264 Ryder System, Inc. 187,000 7,242,510 ------------ Air Freight & Logistics Total 12,967,368 BUILDING PRODUCTS - 1.2% Jacuzzi Brands, Inc. (a) 757,500 7,105,350 NCI Building Systems, Inc. (a) 338,200 7,934,172 Trex Co., Inc. (a) 121,100 4,130,721 ------------ Building Products Total 19,170,243 COMMERCIAL SERVICES & SUPPLIES - 5.1% Capital Environmental Resource, Inc. (a) 98,800 528,481 Cornell Companies, Inc. (a)(b) 765,600 8,857,992 Danka Business Systems PLC, ADR (a) 1,600,000 6,817,600 FTI Consulting, Inc. (a) 620,000 10,329,200 G&K Services, Inc., Class A 180,900 6,733,098 HMS Holdings Corp. (a) 194,400 1,290,816 infoUSA, Inc. (a) 333,100 3,500,881 Kforce, Inc. (a) 915,884 8,700,898 Layne Christensen Co. (a) 85,400 1,251,110 Mobile Mini, Inc. (a) 111,000 1,920,300 MPW Industrial Services Group, Inc. (a) 188,100 496,584 Nashua Corp. (a) 169,600 1,455,168 NCO Group, Inc. (a) 368,330 8,607,872 RemedyTemp, Inc., Class A (a) 125,210 1,659,032 School Specialty, Inc. (a) 194,200 6,907,694 Sotheby's Holdings, Inc., Class A (a) 163,800 2,104,830 Spherion Corp. (a) 499,200 5,106,816 Tetra Tech, Inc. (a) 177,000 3,798,420 Westaff, Inc. (a) 138,400 283,720 Willis Lease Finance Corp. (a) 87,100 779,632 ------------ Commercial Services & Supplies Total 81,130,144 Shares Value ($) ------------ ------------ CONSTRUCTION & ENGINEERING - 1.6% Chicago Bridge & Iron Co. NV, N.Y. Registered Shares 359,500 10,004,885 EMCOR Group, Inc. (a) 261,500 9,597,050 Mastec, Inc. (a) 216,700 2,052,149 Shaw Group, Inc. (a) 343,200 3,720,288 ------------ Construction & Engineering Total 25,374,372 ELECTRICAL EQUIPMENT - 0.3% Powell Industries, Inc. (a) 172,700 3,067,152 Wood's (T.B.) Corp. 108,207 941,401 ------------ Electrical Equipment Total 4,008,553 INDUSTRIAL CONGLOMERATES - 0.1% Gerber Scientific, Inc. (a) 287,400 1,954,320 ------------ Industrial Conglomerates Total 1,954,320 MACHINERY - 5.1% AGCO Corp. (a) 226,300 4,686,673 Albany International Corp., Class A 600,005 16,134,134 CIRCOR International, Inc. 248,900 5,625,140 Flowserve Corp. (a) 155,635 3,260,553 Key Technology, Inc. (a) 189,265 3,032,025 Lydall, Inc. (a) 188,600 1,923,720 Oshkosh Truck Corp. 64,500 3,592,650 Pentair, Inc. 149,600 8,826,400 Reliance Steel & Aluminum Co. 328,100 11,532,715 Terex Corp. (a) 193,944 7,170,110 Thomas Industries, Inc. 241,585 7,609,928 Watts Water Technologies, Inc. 283,400 6,628,726 ------------ Machinery Total 80,022,774 ROAD & RAIL - 1.6% Arkansas Best Corp. 391,600 10,490,964 Kansas City Southern (a) 403,845 5,613,446 P.A.M. Transportation Services, Inc., (a) 101,400 1,754,220 USF Corp. 106,600 3,647,852 Werner Enterprises, Inc. 185,125 3,508,119 ------------ Road & Rail Total 25,014,601 ------------ INDUSTRIALS TOTAL 273,754,932 INFORMATION TECHNOLOGY - 11.8% COMMUNICATIONS EQUIPMENT - 0.6% NMS Communications Corp. (a) 204,190 1,462,000 Paradyne Networks Corp. (a) 1,050,000 3,916,500 Performance Technologies, Inc. (a) 236,400 3,992,796 ------------ Communications Equipment Total 9,371,296 COMPUTERS & PERIPHERALS - 1.8% Cray, Inc. (a) 814,500 5,400,135 Hypercom Corp. (a) 475,800 3,777,852 Imation Corp. 249,500 9,386,190 Intergraph Corp. (a) 83,383 2,016,201 Maxtor Corp. (a) 334,600 2,726,990 See Accompanying Notes to Financial Statements. 53 ________________________________________________________________________________ March 31, 2004 (Unaudited) Columbia Small Cap Fund Shares Value ($) ------------ ------------ COMMON STOCKS - (CONTINUED) INFORMATION TECHNOLOGY - (CONTINUED) COMPUTERS & PERIPHERALS - (CONTINUED) Presstek, Inc. (a) 12,200 132,736 Rimage Corp. (a) 162,900 2,521,692 Storage Technology Corp. (a) 100,000 2,783,000 ------------ Computers & Peripherals Total 28,744,796 ELECTRONIC EQUIPMENT & INSTRUMENTS - 3.3% Agilysys, Inc. 289,600 3,446,240 Benchmark Electronics, Inc. (a) 554,750 17,463,530 Itron, Inc. (a) 300,300 5,588,583 K-Tron International, Inc. (a) 47,710 1,016,223 Keithley Instruments, Inc. 293,640 6,081,284 LeCroy Corp. (a) 139,500 2,897,415 LSI Industries, Inc. 575,965 7,003,734 Merix Corp. (a) 135,400 2,498,130 Technitrol, Inc. (a) 313,010 5,884,588 ------------ Electronic Equipment & Instruments Total 51,879,727 INTERNET SOFTWARE & SERVICES - 0.3% Allscripts Healthcare Solutions, Inc. (a) 200,000 1,940,000 Selectica, Inc. (a) 516,400 2,819,544 ------------ Internet Software & Services Total 4,759,544 IT SERVICES - 2.1% Acxiom Corp. 142,060 3,119,638 Analysts International Corp. (a) 523,900 1,545,505 Computer Task Group, Inc. (a) 792,500 4,192,325 Gartner, Inc., Class A (a) 232,000 2,702,800 Inforte Corp. (a) 450,000 4,500,000 Integral Systems, Inc. (a) 168,100 3,193,900 ProQuest Co. (a) 394,230 11,499,689 Startek, Inc. 59,700 2,169,498 ------------ IT Services Total 32,923,355 SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 1.1% Anadigics, Inc. (a) 364,300 2,265,946 Asyst Technologies, Inc. (a) 155,700 1,281,411 ChipPAC, Inc., Class A (a) 323,200 2,556,512 Fairchild Semiconductor International, Inc., Class A (a) 293,200 7,045,596 Pericom Semiconductor Corp. (a) 343,260 3,940,625 ------------ Semiconductors & Semiconductor Equipment Total 17,090,090 SOFTWARE - 2.6% BindView Development Corp. (a) 1,338,700 4,551,580 MAPICS, Inc. (a) 159,400 1,287,952 Mapinfo Corp. (a) 249,000 3,177,240 Mediware Information Systems, Inc. (a) 158,300 2,803,493 MSC.Software Corp. (a) 460,515 4,057,137 PLATO Learning, Inc. (a) 419,100 4,228,719 Shares Value ($) ------------ ------------ Progress Software Corp. (a) 253,400 6,079,066 Sybase, Inc. (a) 465,600 9,772,944 THQ, Inc. (a) 288,000 5,826,240 ------------ Software Total 41,784,371 ------------ INFORMATION TECHNOLOGY TOTAL 186,553,179 MATERIALS - 7.0% CHEMICALS - 4.0% Airgas, Inc. 251,900 5,365,470 Albemarle Corp. 221,360 6,419,440 Cambrex Corp. 259,200 6,972,480 Fuller (H.B.) Co. 330,860 9,409,658 MacDermid, Inc. 308,000 10,838,520 Millennium Chemicals, Inc. (a) 356,600 5,327,604 Olin Corp. 176,900 3,157,665 Sensient Technologies Corp. 307,800 5,746,626 Spartech Corp. 392,800 9,780,720 ------------ Chemicals Total 63,018,183 CONTAINERS & PACKAGING - 1.3% Greif, Inc., Class A 359,600 12,564,424 Jarden Corp. (a) 124,050 4,405,016 Longview Fibre Co. 204,800 2,285,568 Peak International Ltd. (a) 244,650 1,712,550 ------------ Containers & Packaging Total 20,967,558 METALS & MINING - 1.0% GrafTech International Ltd. (a) 254,900 3,810,755 Hecla Mining Co. (a) 298,300 2,508,703 Northwest Pipe Co. (a) 276,650 4,011,425 Steel Dynamics, Inc. (a) 214,700 5,320,266 ------------ Metals & Mining Total 15,651,149 PAPER & FOREST PRODUCTS - 0.7% Buckeye Technologies, Inc. (a) 208,200 2,156,952 Glatfelter 331,440 3,725,386 Louisiana-Pacific Corp. 206,600 5,330,280 ------------ Paper & Forest Products Total 11,212,618 ------------ MATERIALS TOTAL 110,849,508 TELECOMMUNICATION SERVICES - 0.5% DIVERSIFIED TELECOMMUNICATION SERVICES - 0.4% CT Communications, Inc. 208,400 2,882,172 General Communication, Inc., Class A (a) 397,300 3,615,430 ------------ Diversified Telecommunication Services Total 6,497,602 WIRELESS TELECOMMUNICATION SERVICES - 0.1% LCC International, Inc., Class A (a) 323,100 1,938,600 ------------ Wireless Telecommunication Services Total 1,938,600 ------------ TELECOMMUNICATION SERVICES TOTAL 8,436,202 See Accompanying Notes to Financial Statements. 54 ________________________________________________________________________________ March 31, 2004 (Unaudited) Columbia Small Cap Fund Shares Value ($) ------------ ------------ COMMON STOCKS - (CONTINUED) UTILITIES - 2.5% ELECTRIC UTILITIES - 0.2% Idacorp, Inc. 102,800 3,073,720 ------------ Electric Utilities Total 3,073,720 GAS UTILITIES - 2.0% Cascade Natural Gas Corp. 92,550 2,016,665 New Jersey Resources Corp. 158,750 6,000,750 Northwest Natural Gas Co. 154,700 4,834,375 NUI Corp. 443,100 7,492,821 South Jersey Industries, Inc. 105,500 4,316,005 Southwest Gas Corp. 301,500 7,055,100 ------------ Gas Utilities Total 31,715,716 WATER UTILITIES - 0.3% American States Water Co. 85,150 2,077,660 Aqua America, Inc. 124,468 2,698,466 ------------ Water Utilities Total 4,776,126 ------------ UTILITIES TOTAL 39,565,562 TOTAL COMMON STOCKS (Cost of $1,145,131,602) 1,393,443,619 INVESTMENT MANAGEMENT COMPANIES - 3.2% iShares Russell 2000 Index Fund 385,000 45,276,000 iShares Russell 2000 Value Index Fund 30,000 5,134,500 ------------ TOTAL INVESTMENT MANAGEMENT COMPANIES (Cost of $47,255,978) 50,410,500 CONVERTIBLE PREFERRED STOCK - 0.2% FINANCIALS - 0.2% INSURANCE - 0.2% United Fire & Casualty Co. Series A, 6.380% (Cost of $3,425,000) 137,000 4,108,630 ------------ Par ($) Value ($) ------------ ------------ SHORT-TERM OBLIGATION - 8.5% Repurchase agreement with State Street Bank & Trust Co., dated 03/31/04, due 04/01/04 at 0.960%, collateralized by a U.S. Treasury Bond maturing 08/15/19, market value of $136,841,441 (repurchase proceeds $134,151,577) (Cost of $134,148,000) 134,148,000 134,148,000 ------------ TOTAL INVESTMENTS - 100.0% (COST OF $1,329,960,580) (D) 1,582,110,749 OTHER ASSETS & LIABILITIES, NET - 0.0% (639,716) NET ASSETS - 100.0% 1,581,471,033 NOTES TO INVESTMENT PORTFOLIO: (a) Non-income producing. (b) Investments in affiliated companies at March 31, 2004: An affiliated company is a company in which the Fund has ownership of at least 5% of the voting shares outstanding Security Name: Checkers Drive-In Restaurant, Inc. Shares as of 09/30/03: 319,000 Shares purchased: 288,900 Shares as of 03/31/04: 607,900 Net realized gain or loss: $ -- Dividend income earned: $ -- Value at end of period: $ 7,385,985 Security Name: Cornell Companies, Inc. Shares as of 09/30/03: 343,100 Shares purchased: 422,500 Shares as of 03/31/04: 765,600 Net realized gain or loss: $ -- Dividend income earned: $ -- Value at end of period: $ 8,857,992 Security Name: Unifirst Corp. Shares as of 09/30/03: 422,800 Shares purchased: 50,000 Shares as of 03/31/04: 472,800 Net realized gain or loss: $ -- Dividend income earned: $ 33,960 Value at end of period: $13,039,824 (c) Represents fair value as determined in good faith under the direction of the Board of Trustees. (d) Cost for both financial statement and federal income tax purposes is the same. ACRONYM NAME ------- ---- ADR American Depositary Receipt See Accompanying Notes to Financial Statements. 55 INVESTMENT PORTFOLIO____________________________________________________________ March 31, 2004 (Unaudited) Columbia Small Company Equity Fund Shares Value ($) ------------ ------------ COMMON STOCKS - 99.5% CONSUMER DISCRETIONARY - 16.8% HOTELS, RESTAURANTS & LEISURE - 5.2% Alliance Gaming Corp. (a) 151,600 4,870,908 Gaylord Entertainment Co. (a) 109,300 3,377,370 Pinnacle Entertainment, Inc. (a) 91,800 1,266,840 Scientific Games Corp., Class A (a) 234,600 4,391,712 Station Casinos, Inc. 190,400 8,409,968 ------------ Hotels, Restaurants & Leisure Total 22,316,798 MEDIA - 4.3% Cumulus Media, Inc., Class A (a) 116,000 2,318,840 Journal Communications, Inc. 62,400 1,248,000 Lin TV Corp., Class A (a) 171,000 4,071,510 Radio One, Inc., Class D (a) 142,700 2,639,950 Sinclair Broadcast Group, Inc., Class A (a) 397,800 4,972,500 TiVo, Inc. (a) 316,600 2,814,574 ------------ Media Total 18,065,374 SPECIALTY RETAIL - 7.3% Bombay Co., Inc. (a) 416,000 3,265,600 Cost Plus, Inc. (a) 128,700 5,373,225 Jarden Corp. (a) 291,750 10,360,042 Party City Corp. (a) 99,900 1,487,511 PETCO Animal Supplies, Inc. (a) 185,300 5,221,754 Sharper Image Corp. (a) 161,900 5,274,702 ------------ Specialty Retail Total 30,982,834 ------------ CONSUMER DISCRETIONARY TOTAL 71,365,006 CONSUMER STAPLES - 1.3% FOOD & STAPLES RETAILING - 0.5% Performance Food Group Co. (a) 58,700 2,016,345 ------------ Food & Staples Retailing Total 2,016,345 FOOD PRODUCTS - 0.8% American Italian Pasta Co., Class A 81,300 3,246,309 ------------ Food Products Total 3,246,309 ------------ CONSUMER STAPLES TOTAL 5,262,654 ENERGY - 4.1% ENERGY EQUIPMENT & SERVICES - 2.0% Key Energy Services, Inc. (a) 235,000 2,585,000 Maverick Tube Corp. (a) 128,200 3,019,110 Unit Corp. (a) 105,000 2,879,100 ------------ Energy Equipment & Services Total 8,483,210 OIL & GAS - 2.1% Patina Oil & Gas Corp. 136,900 3,593,625 Tom Brown, Inc. (a) 64,100 2,410,160 Western Gas Resources, Inc. 57,200 2,908,620 ------------ Oil & Gas Total 8,912,405 ------------ ENERGY TOTAL 17,395,615 Shares Value ($) ------------ ------------ FINANCIALS - 10.2% CAPITAL MARKETS - 2.3% Investors Financial Services Corp. 132,500 5,474,900 Jefferies Group, Inc. 128,300 4,532,839 ------------ Capital Markets Total 10,007,739 COMMERCIAL BANKS - 3.6% Boston Private Financial Holdings, Inc. 125,800 3,522,400 East West Bancorp, Inc. 84,400 4,726,400 Mercantile Bank Corp. 97,300 3,454,150 Prosperity Bancshares, Inc. 148,000 3,486,880 ------------ Commercial Banks Total 15,189,830 DIVERSIFIED FINANCIAL SERVICES - 2.3% Commercial Capital Bancorp, Inc. (a) 186,900 4,283,748 MTC Technologies, Inc. (a) 135,700 3,407,427 National Financial Partners Corp. 59,900 1,931,775 ------------ Diversified Financial Services Total 9,622,950 INSURANCE - 2.0% Infinity Property & Casualty Corp. 154,200 4,846,506 Philadelphia Consolidated Holding Co. (a) 66,900 3,880,200 ------------ Insurance Total 8,726,706 ------------ FINANCIALS TOTAL 43,547,225 HEALTH CARE - 23.5% BIOTECHNOLOGY - 6.3% BioMarin Pharmaceuticals, Inc. (a) 374,100 2,813,232 Ciphergen Biosystems, Inc. (a) 190,000 1,582,700 Cytogen Corp. (a) 161,300 1,980,764 Exact Sciences Corp. (a) 228,800 1,777,776 Ilex Oncology, Inc. (a) 146,000 3,492,320 NeoPharm, Inc. (a) 96,200 1,804,712 Neurocrine Biosciences, Inc. (a) 67,400 3,983,340 Protein Design Labs, Inc. (a) 157,900 3,761,178 Serologicals Corp. (a) 50,400 1,028,160 Telik, Inc. (a) 164,300 4,409,812 ------------ Biotechnology Total 26,633,994 HEALTH CARE EQUIPMENT & SUPPLIES - 7.2% Bio-Rad Laboratories, Inc., Class A (a) 50,050 2,821,319 Cardiac Science, Inc. (a) 542,700 2,371,599 Conceptus, Inc. (a) 227,400 2,710,608 Cytyc Corp. (a) 209,800 4,668,050 Integra LifeSciences Holdings Corp. (a) 118,400 3,625,408 LCA-Vision, Inc. (a) 120,000 2,816,400 Medical Action Industries, Inc. (a) 238,000 4,864,720 Palomar Medical Technologies, Inc. (a) 67,900 1,224,916 SonoSite, Inc. (a) 155,600 3,318,948 SurModics, Inc. (a) 103,900 2,068,649 ------------ Health Care Equipment & Supplies Total 30,490,617 See Accompanying Notes to Financial Statements. 56 ________________________________________________________________________________ March 31, 2004 (Unaudited) Columbia Small Company Equity Fund Shares Value ($) ------------ ------------ COMMON STOCKS - (CONTINUED) HEALTH CARE - (CONTINUED) HEALTH CARE PROVIDERS & SERVICES - 2.4% Advisory Board Co. (a) 108,800 3,976,640 America Service Group, Inc. (a) 63,700 2,184,910 LifePoint Hospitals, Inc. (a) 90,800 2,936,472 U.S. Physical Therapy, Inc. (a) 86,500 1,193,700 ------------ Health Care Providers & Services Total 10,291,722 PHARMACEUTICALS - 7.6% Advancis Pharmaceutical Corp. (a) 253,863 2,320,308 Atrix Laboratories, Inc. (a) 100,800 2,570,400 Caraco Pharmaceutical Laboratories Ltd. (a) 88,800 902,208 DepoMed, Inc. (a) 372,700 2,918,241 DOV Pharmaceutical, Inc. (a) 208,100 3,229,712 Nektar Therapeutics (a) 207,200 4,471,376 Noven Pharmaceuticals, Inc. (a) 187,700 4,029,919 Renovis, Inc. (a) 214,400 2,176,160 Salix Pharmaceuticals Ltd. (a) 184,200 5,345,484 Taro Pharmaceuticals Industries (a) 78,600 4,558,014 ------------ Pharmaceuticals Total 32,521,822 ------------ HEALTH CARE TOTAL 99,938,155 INDUSTRIALS - 12.0% AEROSPACE & DEFENSE - 0.8% DRS Technologies, Inc. (a) 129,700 3,629,006 ------------ Aerospace & Defense Total 3,629,006 AIR FREIGHT & LOGISTICS - 1.9% EGL, Inc. (a) 284,000 5,100,640 UTI Worldwide, Inc. 64,300 2,873,567 ------------ Air Freight & Logistics Total 7,974,207 COMMERCIAL SERVICES & SUPPLIES - 3.6% Arbitron, Inc. (a) 98,200 3,953,532 Corporate Executive Board Co. 66,600 3,130,200 Navigant Consulting, Inc. (a) 130,100 2,631,923 NCO Group, Inc. (a) 124,100 2,900,217 Sylvan Learning Systems, Inc. (a) 76,500 2,685,915 ------------ Commercial Services & Supplies Total 15,301,787 CONSTRUCTION & ENGINEERING - 0.8% Chicago Bridge & Iron Co. NV, N.Y. Registered Shares 119,000 3,311,770 ------------ Construction & Engineering Total 3,311,770 ELECTRICAL EQUIPMENT - 0.6% Plug Power, Inc. (a) 320,000 2,470,400 ------------ Electrical Equipment Total 2,470,400 MACHINERY - 1.1% Cuno, Inc. (a) 63,875 2,866,710 RAE Systems, Inc. (a) 486,600 1,975,596 ------------ Machinery Total 4,842,306 Shares Value ($) ------------ ------------ ROAD & RAIL - 2.8% Genesee & Wyoming, Inc., Class A (a) 149,550 3,693,885 Heartland Express, Inc. 126,700 2,886,226 Old Dominion Freight Line, Inc. (a) 74,000 2,493,800 Sirva, Inc. (a) 122,000 2,942,640 ------------ Road & Rail Total 12,016,551 TRADING COMPANIES & DISTRIBUTORS - 0.4% Aceto Corp. 100,900 1,585,139 ------------ Trading Companies & Distributors Total 1,585,139 ------------ INDUSTRIALS TOTAL 51,131,166 INFORMATION TECHNOLOGY - 29.9% COMMUNICATIONS EQUIPMENT - 2.7% F5 Networks, Inc. (a) 92,500 3,131,125 Finisar Corp. (a) 773,000 1,685,140 Inter-Tel, Inc. 66,200 1,989,972 Netopia, Inc. (a) 195,100 2,391,926 NMS Communications Corp. (a) 306,100 2,191,676 ------------ Communications Equipment Total 11,389,839 COMPUTERS & PERIPHERALS - 2.1% Applied Films Corp. (a) 120,300 3,356,370 Cray, Inc. (a) 321,900 2,134,197 Pinnacle Systems, Inc. (a) 361,200 3,261,636 ------------ Computers & Peripherals Total 8,752,203 ELECTRONIC EQUIPMENT & INSTRUMENTS - 3.3% Anixter International, Inc. (a) 89,400 2,525,550 Coherent, Inc. (a) 103,000 2,707,870 Global Imaging Systems, Inc. (a) 131,200 4,358,464 Itron, Inc. (a) 170,000 3,163,700 Planar Systems, Inc. (a) 82,300 1,171,129 ------------ Electronic Equipment & Instruments Total 13,926,713 INTERNET SOFTWARE & SERVICES - 3.7% Corillian Corp. (a) 439,500 2,175,525 Digital River, Inc. (a) 154,700 3,621,527 Digitas, Inc. (a) 395,000 4,064,550 Equinix, Inc. (a) 68,700 2,487,696 PEC Solutions, Inc. (a) 93,700 1,238,714 Quovadx, Inc. (a) 281,200 1,034,816 Telecommunication Systems, Inc., Class A (a) 181,400 1,306,080 ------------ Internet Software & Services Total 15,928,908 IT SERVICES - 0.2% GRIC Communications, Inc. (a) 257,100 861,285 ------------ IT Services Total 861,285 See Accompanying Notes to Financial Statements. 57 ________________________________________________________________________________ March 31, 2004 (Unaudited) Columbia Small Company Equity Fund Shares Value ($) ------------ ------------ COMMON STOCKS - (CONTINUED) INFORMATION TECHNOLOGY - (CONTINUED) SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 11.6% Artisan Components, Inc. (a) 235,700 5,253,753 August Technology Corp. (a) 172,200 2,583,000 Brooks Automation, Inc. (a) 185,600 3,893,888 DSP Group, Inc. (a) 87,100 2,241,083 Entegris, Inc. (a) 443,800 5,618,508 FEI Co. (a) 136,400 2,980,340 Integrated Circuit Systems, Inc. (a) 78,900 1,974,867 IXYS Corp. (a) 425,300 3,997,820 Lattice Semiconductor Corp. (a) 201,100 1,755,603 Mykrolis Corp. (a) 221,700 3,161,442 Silicon Image, Inc. (a) 427,300 4,401,190 Silicon Storage Technology, Inc. (a) 439,500 5,687,130 Skyworks Solutions, Inc. (a) 183,100 2,134,946 Transmeta Corp. (a) 621,300 2,460,348 Zoran Corp. (a) 80,000 1,388,800 ------------ Semiconductors & Semiconductor Equipment Total 49,532,718 SOFTWARE - 6.3% Activision, Inc. (a) 197,850 3,129,987 Captiva Software Corp. (a) 276,200 3,822,608 Epicor Software Corp. (a) 165,700 2,198,839 Magma Design Automation, Inc. (a) 128,900 2,695,299 Manhattan Associates, Inc. (a) 151,500 4,211,700 Micromuse, Inc. (a) 412,700 3,219,060 OpenTV Corp., Class A (a) 669,100 2,161,193 ScanSoft, Inc. (a) 205,600 1,149,304 Take-Two Interactive Software, Inc. (a) 58,200 2,140,596 Verity, Inc. (a) 143,600 1,963,012 ------------ Software Total 26,691,598 ------------ INFORMATION TECHNOLOGY TOTAL 127,083,264 MATERIALS - 1.2% CHEMICALS - 0.5% Landec Corp. (a) 254,500 2,188,700 ------------ Chemicals Total 2,188,700 CONSTRUCTION MATERIALS - 0.3% AMCOL International Corp. 69,100 1,205,795 ------------ Construction Materials Total 1,205,795 METALS & MINING - 0.4% Steel Technologies, Inc. 95,400 1,843,128 ------------ Metals & Mining Total 1,843,128 ------------ MATERIALS TOTAL 5,237,623 Shares Value ($) ------------ ------------ TELECOMMUNICATION SERVICES - 0.5% WIRELESS TELECOMMUNICATION SERVICES - 0.5% At Road, Inc. (a) 190,300 2,334,981 ------------ Wireless Telecommunication Services Total 2,334,981 ------------ TELECOMMUNICATION SERVICES TOTAL 2,334,981 TOTAL COMMON STOCKS (Cost of $327,410,125) 423,295,689 TOTAL INVESTMENTS - 99.5% (COST OF $327,410,125) (B) 423,295,689 OTHER ASSETS & LIABILITIES, NET - 0.5% 2,246,230 NET ASSETS - 100.0% 425,541,919 NOTES TO INVESTMENT PORTFOLIO: (a) Non-income producing. (b) Cost for both financial statement and federal income tax purposes is the same. ACRONYM NAME ------- ---- ADR American Depositary Receipt See Accompanying Notes to Financial Statements. 58 This page intentionally left blank. STATEMENTS OF ASSETS AND LIABILITIES____________________________________________ March 31, 2004 (Unaudited) Columbia Equity Funds
COLUMBIA COLUMBIA COLUMBIA ASSET LARGE CAP DISCIPLINED ALLOCATION GROWTH VALUE FUND ($) FUND ($) FUND ($) - ------------------------------------------------------------------------------------------- ASSETS Unaffiliated investments, at cost 412,680,430 843,240,055 375,507,542 Affiliated investments, at cost -- -- -- ------------ -------------- ------------ Unaffiliated investments, at value 471,613,886 1,008,201,391 427,304,906 Affiliated investments, at value -- -- -- Cash -- 315 -- Foreign currency (cost of $554,763) -- -- -- Receivable for: Investments sold 1,365,244 4,636,420 -- Fund shares sold 584,815 1,182,867 674,488 Dividends 479,068 906,900 612,085 Interest 1,566,775 157 82 Foreign tax reclaim 23,774 -- -- Deferred compensation plan 24,326 46,992 19,192 Other assets -- -- 10,190 ------------ -------------- ------------ Total assets 475,657,888 1,014,975,042 428,620,943 - ------------------------------------------------------------------------------------------- LIABILITIES Payable to custodian bank 87,093 -- 10,210 Payable for: Investments purchased 1,796,364 9,776,103 553,360 Fund shares repurchased 589,469 3,228,010 -- Investment advisory fee 300,627 610,398 266,756 Administration fee 26,982 56,522 23,830 Transfer agent fee 238,002 303,970 121,735 Pricing and bookkeeping fees 14,200 87 3,681 Trustees' fees 621 -- -- Custody fee -- -- -- Distribution and service fees 96,259 109,988 45,269 Deferred compensation plan 24,326 46,992 19,192 Foreign capital gains tax 78,132 -- -- Other liabilities 7,702 5,002 -- ------------ -------------- ------------ Total liabilities 3,259,777 14,137,072 1,044,033 NET ASSETS 472,398,111 1,000,837,970 427,576,910 - ------------------------------------------------------------------------------------------- NET ASSETS CONSIST OF Paid-in capital 434,325,241 978,318,527 418,123,682 Undistributed (overdistributed) net investment income (1,233,098) -- (643,460) Accumulated net investment loss -- (1,549,717) -- Accumulated net realized gain (loss) (19,552,406) (140,892,176) (41,700,676) Unrealized appreciation (depreciation) on: Investments 58,933,456 164,961,336 51,797,364 Foreign currency translations 3,050 -- -- Foreign capital gains tax (78,132) -- -- ------------ -------------- ------------ NET ASSETS 472,398,111 1,000,837,970 427,576,910 COLUMBIA COLUMBIA INTER COLUMBIA COLUMBIA SMALL NATIONAL LARGE CAP SMALL COMPANY EQUITY CORE CAP EQUITY FUND ($) FUND ($) FUND ($) FUND ($) - ----------------------------------------------------------------------------------------------------------- ASSETS Unaffiliated investments, at cost 412,541,703 395,445,570 1,306,960,544 327,410,125 Affiliated investments, at cost -- -- 23,000,036 ------------ ------------ -------------- ------------ Unaffiliated investments, at value 500,935,522 429,341,090 1,552,826,948 423,295,689 Affiliated investments, at value -- -- 29,283,801 -- Cash 80,019 -- 1,357,558 -- Foreign currency (cost of $554,763) 557,892 -- -- -- Receivable for: Investments sold 3,841,066 5,384,903 4,845,948 5,561,031 Fund shares sold 1,368,107 250,519 1,952,756 1,230,444 Dividends 1,808,874 329,745 777,325 36,186 Interest 210 -- 3,577 -- Foreign tax reclaim 390,900 -- -- -- Deferred compensation plan 19,639 22,760 19,210 17,211 Other assets -- 2,100 39,158 8,489 ------------ ------------ -------------- ------------ Total assets 509,002,229 435,331,117 1,591,106,281 430,149,050 - ----------------------------------------------------------------------------------------------------------- LIABILITIES Payable to custodian bank -- 625,438 -- 665,505 Payable for: Investments purchased 3,195,112 -- 7,254,587 2,201,476 Fund shares repurchased 1,763,506 973,149 1,147,601 1,289,235 Investment advisory fee 262,146 274,909 905,672 265,668 Administration fee 25,914 25,512 86,067 23,733 Transfer agent fee 116,997 243,439 42,295 114,291 Pricing and bookkeeping fees 9,772 3,591 -- 3,679 Trustees' fees 603 -- -- -- Custody fee 11,771 -- -- -- Distribution and service fees 16,935 75,502 179,816 26,333 Deferred compensation plan 19,639 22,760 19,210 17,211 Foreign capital gains tax 1,056,547 -- -- -- Other liabilities 46,986 5,973 -- -- ------------ ------------ -------------- ------------ Total liabilities 6,525,928 2,250,273 9,635,248 4,607,131 NET ASSETS 502,476,301 433,080,844 1,581,471,033 425,541,919 - ----------------------------------------------------------------------------------------------------------- NET ASSETS CONSIST OF Paid-in capital 743,381,471 382,972,806 1,302,123,224 392,605,558 Undistributed (overdistributed) net investment income 1,298,611 -- -- -- Accumulated net investment loss -- (282,499) (1,308,760) (1,985,793) Accumulated net realized gain (loss) (329,608,093) 16,495,017 28,506,400 (60,963,410) Unrealized appreciation (depreciation) on: Investments 88,393,819 33,895,520 252,150,169 95,885,564 Foreign currency translations 67,040 -- -- -- Foreign capital gains tax (1,056,547) -- -- -- ------------ ------------ -------------- ------------ NET ASSETS 502,476,301 433,080,844 1,581,471,033 425,541,919
See Accompanying Notes to Financial Statements. 60 STATEMENTS OF ASSETS AND LIABILITIES____________________________________________ Columbia Equity Funds
COLUMBIA COLUMBIA COLUMBIA COLUMBIA INTER ASSET LARGE CAP DISCIPLINED NATIONAL ALLOCATION GROWTH VALUE EQUITY FUND ($) FUND ($) FUND ($) FUND ($) - -------------------------------------------------------------------------------------------------- NET ASSETS Class A 2,134,336 3,644,250 1,819,706 742,597 Class B 4,164,011 2,539,339 1,504,047 739,017 Class C 416,735 603,826 254,579 95,675 Class G 51,547,206 54,427,906 9,686,466 5,556,803 Class T 197,475,373 244,261,783 139,988,117 46,484,118 Class Z 216,660,450 695,360,866 274,323,995 448,858,091 - -------------------------------------------------------------------------------------------------- SHARES OF BENEFICIAL INTEREST OUTSTANDING Class A 138,797 187,421 144,565 57,617 Class B 270,883 136,011 124,883 57,727 Class C 27,104 32,302 21,172 7,518 Class G 3,353,675 3,009,748 803,817 437,555 Class T 12,837,662 12,632,231 11,119,059 3,613,330 Class Z 14,095,496 35,232,477 21,399,717 34,300,006 - -------------------------------------------------------------------------------------------------- CLASS A Net asset value per share (a) 15.38 19.44 12.59 12.89 Maximum sales charge 5.75% 5.75% 5.75% 5.75% Maximum offering price per share (b) 16.32 20.63 13.36 13.68 - -------------------------------------------------------------------------------------------------- CLASS B Net asset value and offering price per share (a) 15.37 18.67 12.04 12.80 - -------------------------------------------------------------------------------------------------- CLASS C Net asset value and offering price per share (a) 15.38 18.69 12.02 12.73 - -------------------------------------------------------------------------------------------------- CLASS G Net asset value and offering price per share (a) 15.37 18.08 12.05 12.70 - -------------------------------------------------------------------------------------------------- CLASS T Net asset value per share (a) 15.38 19.34 12.59 12.86 Maximum sales charge 5.75% 5.75% 5.75% 5.75% Maximum offering price per share(b) 16.32 20.52 13.36 13.64 - -------------------------------------------------------------------------------------------------- CLASS Z Net asset value, offering and redemption price per share (c) 15.37 19.74 12.82 13.09 COLUMBIA COLUMBIA COLUMBIA SMALL LARGE CAP SMALL COMPANY CORE CAP EQUITY FUND ($) FUND ($) FUND ($) - ------------------------------------------------------------------------------------- NET ASSETS Class A 10,044,122 205,439,050 1,692,586 Class B 3,632,804 41,976,101 1,130,858 Class C 391,714 65,384,472 447,453 Class G 24,544,603 11,610,765 6,348,457 Class T 195,825,419 157,954,286 78,839,634 Class Z 198,642,182 1,099,106,359 337,082,931 - ------------------------------------------------------------------------------------- SHARES OF BENEFICIAL INTEREST OUTSTANDING Class A 807,801 11,628,388 96,939 Class B 299,193 2,457,762 69,138 Class C 32,257 3,825,236 27,418 Class G 2,040,985 685,762 388,783 Class T 15,811,218 9,011,413 4,518,971 Class Z 15,931,887 61,637,296 18,294,704 - ------------------------------------------------------------------------------------- CLASS A Net asset value per share (a) 12.43 17.67 17.46 Maximum sales charge 5.75% 5.75% 5.75% Maximum offering price per share (b) 13.19 18.75 18.53 - ------------------------------------------------------------------------------------- CLASS B Net asset value and offering price per share (a) 12.14 17.08 16.36 - ------------------------------------------------------------------------------------- CLASS C Net asset value and offering price per share (a) 12.14 17.09 16.32 - ------------------------------------------------------------------------------------- CLASS G Net asset value and offering price per share (a) 12.03 16.93 16.33 - ------------------------------------------------------------------------------------- CLASS T Net asset value per share (a) 12.39 17.53 17.45 Maximum sales charge 5.75% 5.75% 5.75% Maximum offering price per share (b) 13.15 18.60 18.51 - ------------------------------------------------------------------------------------- CLASS Z Net asset value, offering and redemption price per share (c) 12.47 17.83 18.43
(a) Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge and redemption fees. (b) On sales of $50,000 or more the offering price is reduced. (c) Redemption price per share is equal to net asset value less any applicable redemption fees. See Accompanying Notes to Financial Statements. 61 STATEMENTS OF OPERATIONS________________________________________________________ For the Six Months Ended March 31, 2004 (Unaudited) Columbia Equity Funds
COLUMBIA COLUMBIA COLUMBIA COLUMBIA INTER ASSET LARGE CAP DISCIPLINED NATIONAL ALLOCATION GROWTH VALUE EQUITY FUND ($) FUND ($) FUND ($) FUND ($) - ---------------------------------------------------------------------------------------------- NET INVESTMENT INCOME INCOME Dividends 2,420,960 4,363,906 5,134,994 3,753,158 Dividends from affiliates -- -- -- -- Interest 4,326,189 18,175 17,813 75,148 Foreign withholding tax (47,715) (21,070) -- (368,147) ---------- ---------- ----------- ---------- Total income 6,699,434 4,361,011 5,152,807 3,460,159 - ---------------------------------------------------------------------------------------------- EXPENSES Investment advisory fee 1,797,494 3,681,374 1,522,159 2,059,163 Administration fee 160,576 338,705 135,979 154,428 Distribution fee: Class B 12,506 6,957 3,286 1,842 Class C 1,125 2,372 564 315 Class G 177,827 184,016 34,931 17,695 Service fee: Class A 2,167 3,578 1,793 585 Class B 4,158 2,308 1,096 614 Class C 373 791 188 105 Class G 82,074 84,931 16,122 8,167 Shareholder services fee - Class T 295,518 372,604 206,800 68,710 Transfer agent fee: Class A 2,195 2,802 1,314 498 Class B 4,241 1,925 835 391 Class C 404 620 156 99 Class G 75,920 73,250 13,870 10,482 Class T 257,670 272,832 139,788 58,347 Class Z 282,939 680,189 233,832 171,017 Pricing and bookkeeping fees 73,654 56,203 28,887 41,695 Trustees' fees 6,751 6,385 6,249 6,249 Custody fee 96,886 15,983 6,077 92,789 Other expenses 67,398 112,771 81,570 78,756 Non-recurring costs (See Note 8) 3,215 6,792 2,895 3,341 Costs assumed by Investment Advisor (See Note 8) (3,215) (6,792) (2,895) (3,341) ---------- ---------- ----------- ---------- Total expenses 3,401,876 5,900,596 2,435,496 2,771,947 Expenses waived or reimbursed by Investment Advisor (12,117) (21,381) -- (576,380) Fees waived by Transfer Agent: Class A -- -- -- (20) Class B -- -- -- (20) Class C -- -- -- (4) Class G -- -- -- (3,506) Class T -- -- -- (13,850) Class Z -- -- -- (13,970) Custody earnings credit (242) -- (1) (321) ---------- ---------- ----------- ---------- Net expenses 3,389,517 5,879,215 2,435,495 2,163,876 ---------- ---------- ----------- ---------- Net Investment Income (Loss) 3,309,917 (1,518,204) 2,717,312 1,296,283 COLUMBIA COLUMBIA COLUMBIA SMALL LARGE CAP SMALL COMPANY CORE CAP EQUITY FUND ($) FUND ($) FUND ($) - ------------------------------------------------------------------------------- NET INVESTMENT INCOME INCOME Dividends 2,760,083 4,457,996 389,588 Dividends from affiliates -- 33,960 -- Interest 10,908 614,357 28,153 Foreign withholding tax (14,790) (13,029) (1,428) ---------- ---------- ---------- Total income 2,756,201 5,093,284 416,313 - ------------------------------------------------------------------------------- EXPENSES Investment advisory fee 1,634,154 4,743,535 1,549,211 Administration fee 145,984 446,547 138,396 Distribution fee: Class B 10,907 95,605 2,018 Class C 1,421 149,253 760 Class G 90,471 36,850 21,759 Service fee: Class A 11,380 164,830 1,017 Class B 3,625 31,777 669 Class C 473 49,615 252 Class G 41,756 17,007 10,043 Shareholder services fee - Class T 295,274 228,020 113,748 Transfer agent fee: Class A 12,427 47,145 1,002 Class B 3,679 9,831 610 Class C 475 14,610 216 Class G 49,173 5,797 14,111 Class T 271,998 65,783 104,578 Class Z 204,213 337,132 314,084 Pricing and bookkeeping fees 28,788 57,968 29,280 Trustees' fees 6,500 5,882 6,001 Custody fee 7,831 21,109 9,914 Other expenses 54,592 121,384 94,879 Non-recurring costs (See Note 8) 2,945 10,616 2,876 Costs assumed by Investment Advisor (See Note 8) (2,945) (10,616) (2,876) ---------- ---------- ---------- Total expenses 2,875,121 6,649,680 2,412,548 Expenses waived or reimbursed by Investment Advisor -- (28,816) -- Fees waived by Transfer Agent: Class A (101) -- (24) Class B (35) -- (17) Class C (4) -- (6) Class G (4,614) -- (139) Class T (2,030) -- (10,884) Class Z (2,048) -- (7,211) Custody earnings credit -- (4,518) (1,049) ---------- ---------- ---------- Net expenses 2,866,289 6,616,346 2,393,218 ---------- ---------- ---------- Net Investment Income (Loss) (110,088) (1,523,062) (1,976,905)
See Accompanying Notes to Financial Statements. 62 STATEMENTS OF OPERATIONS________________________________________________________ Columbia Equity Funds
COLUMBIA COLUMBIA COLUMBIA COLUMBIA INTER ASSET LARGE CAP DISCIPLINED NATIONAL ALLOCATION GROWTH VALUE EQUITY FUND ($) FUND ($) FUND ($) FUND ($) - -------------------------------------------------------------------------------------------------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, FOREIGN CURRENCY AND FOREIGN CAPITAL GAINS TAX Net realized gain (loss) on: Investments 20,830,646 36,310,506 25,762,769 37,056,770 Foreign currency transactions (83,613) -- -- (634,755) ----------- ----------- ----------- ----------- Net realized gain 20,747,033 36,310,506 25,762,769 36,422,015 ----------- ----------- ----------- ----------- Net change in unrealized appreciation/depreciation on: Investments 26,013,957 66,107,564 28,674,684 41,733,134 Foreign currency translations 2,569 -- -- 3,109 Foreign capital gains tax (4,030) -- -- 138,588 ----------- ----------- ----------- ----------- Net change in unrealized appreciation/depreciation 26,012,496 66,107,564 28,674,684 41,874,831 ----------- ----------- ----------- ----------- Net Gain 46,759,529 102,418,070 54,437,453 78,296,846 ----------- ----------- ----------- ----------- Net Increase Resulting from Operations 50,069,446 100,899,866 57,154,765 79,593,129 COLUMBIA COLUMBIA COLUMBIA SMALL LARGE CAP SMALL COMPANY CORE CAP EQUITY FUND ($) FUND ($) FUND ($) - --------------------------------------------------------------------------------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, FOREIGN CURRENCY AND FOREIGN CAPITAL GAINS TAX Net realized gain (loss) on: Investments 36,084,486 30,448,594 40,694,292 Foreign currency transactions -- -- -- ---------- ----------- ---------- Net realized gain 36,084,486 30,448,594 40,694,292 ---------- ----------- ---------- Net change in unrealized appreciation/depreciation on: Investments 8,540,235 179,829,229 47,683,562 Foreign currency translations -- -- -- Foreign capital gains tax -- -- -- ---------- ----------- ---------- Net change in unrealized appreciation/depreciation 8,540,235 179,829,229 47,683,562 ---------- ----------- ---------- Net Gain 44,624,721 210,277,823 88,377,854 ---------- ----------- ---------- Net Increase Resulting from Operations 44,514,633 208,754,761 86,400,949
See Accompanying Notes to Financial Statements. 63 STATEMENTS OF CHANGES IN NET ASSETS_____________________________________________ March 31, 2004 Columbia Equity Funds
COLUMBIA ASSET ALLOCATION FUND -------------------------------------------- (UNAUDITED) SIX MONTHS PERIOD YEAR ENDED ENDED ENDED MARCH 31, SEPTEMBER 30, OCTOBER 31, INCREASE (DECREASE) IN NET ASSETS: 2004 ($) 2003 (a)($) 2002 ($) - --------------------------------------------------------------------------------------------------------- OPERATIONS Net investment income (loss) 3,309,917 8,020,538 9,550,438 Net realized gain (loss) on investments sold, futures contracts, foreign currency transactions and foreign capital gains tax 20,747,033 (10,461,088) (26,364,880) Net change in unrealized appreciation/depreciation of investments, futures contracts, foreign currency translations and foreign capital gains tax 26,012,496 46,417,019 (54,121,169) ------------ ------------ ------------ Net increase (decrease) resulting from operations 50,069,446 43,976,469 (70,935,611) - --------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS From net investment income: Class A (20,536) (4,595) (817) Class B (25,109) (9,663) (3,249) Class C (2,220) (640) -- Class G (389,601) (666,378) (903,651) Class T (2,148,565) (3,230,558) (4,182,650) Class Z (2,778,574) (4,391,025) (3,849,053) From net realized gains: Class G -- -- -- Class T -- -- -- Class Z -- -- -- ------------ ------------ ------------ Total distributions to shareholders (5,364,605) (8,302,859) (8,939,420) - --------------------------------------------------------------------------------------------------------- NET CAPITAL SHARE TRANSACTIONS (40,142,549) (3,427,997) (111,502,479) Redemption Fees -- -- -- Net increase (decrease) in net assets 4,562,292 32,245,613 (191,377,510) - --------------------------------------------------------------------------------------------------------- NET ASSETS Beginning of period 467,835,819 435,590,206 626,967,716 End of period 472,398,111 467,835,819 435,590,206 ------------ ------------ ------------ Undistributed (overdistributed) net investment income at end of period (1,233,098) 821,590 1,115,554 Accumulated net investment loss at end of period -- -- -- COLUMBIA LARGE CAP GROWTH FUND -------------------------------------------------- (UNAUDITED) SIX MONTHS PERIOD YEAR ENDED ENDED ENDED MARCH 31, SEPTEMBER 30, OCTOBER 31, INCREASE (DECREASE) IN NET ASSETS: 2004 ($) 2003 (a)($) 2002 ($) - --------------------------------------------------------------------------------------------------------------- OPERATIONS Net investment income (loss) (1,518,204) 831,687 1,842,652 Net realized gain (loss) on investments sold, futures contracts, foreign currency transactions and foreign capital gains tax 36,310,506 (33,599,244) (95,984,198) Net change in unrealized appreciation/depreciation of investments, futures contracts, foreign currency translations and foreign capital gains tax 66,107,564 118,125,297 (145,463,165) -------------- -------------- -------------- Net increase (decrease) resulting from operations 100,899,866 85,357,740 (239,604,711) - --------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS From net investment income: Class A -- (123) -- Class B -- -- -- Class C -- -- -- Class G -- -- -- Class T -- (2,326,221) -- Class Z (344,225) -- -- From net realized gains: Class G -- -- -- Class T -- -- -- Class Z -- -- -- -------------- -------------- -------------- Total distributions to shareholders (344,225) (2,326,344) -- - --------------------------------------------------------------------------------------------------------------- NET CAPITAL SHARE TRANSACTIONS (64,489,195) (121,172,860) (42,855,520) Redemption Fees -- -- -- Net increase (decrease) in net assets 36,066,446 (38,141,464) (282,460,231) - --------------------------------------------------------------------------------------------------------------- NET ASSETS Beginning of period 964,771,524 1,002,912,988 1,285,373,219 End of period 1,000,837,970 964,771,524 1,002,912,988 -------------- -------------- -------------- Undistributed (overdistributed) net investment income at end of period -- 312,712 1,807,369 Accumulated net investment loss at end of period (1,549,717) -- -- COLUMBIA DISCIPLINED VALUE FUND --------------------------------------------- (UNAUDITED) SIX MONTHS PERIOD YEAR ENDED ENDED ENDED MARCH 31, SEPTEMBER 30, OCTOBER 31, INCREASE (DECREASE) IN NET ASSETS: 2004 ($) 2003 (a)($) 2002 ($) - ----------------------------------------------------------------------------------------------------------- OPERATIONS Net investment income (loss) 2,717,312 1,773,200 (831,035) Net realized gain (loss) on investments sold, futures contracts, foreign currency transactions and foreign capital gains tax 25,762,769 3,691,251 (68,065,195) Net change in unrealized appreciation/depreciation of investments, futures contracts, foreign currency translations and foreign capital gains tax 28,674,684 41,060,980 (16,740,050) ------------ ------------- ------------ Net increase (decrease) resulting from operations 57,154,765 46,525,431 (85,636,280) - ----------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS From net investment income: Class A (18,185) -- -- Class B (3,958) -- -- Class C (695) -- -- Class G (30,213) -- -- Class T (1,327,341) -- -- Class Z (3,747,192) -- -- From net realized gains: Class G -- -- (732,810) Class T -- -- (4,986,255) Class Z -- -- (4,800,214) ------------ ------------- ------------ Total distributions to shareholders (5,127,584) -- (10,519,279) - ----------------------------------------------------------------------------------------------------------- NET CAPITAL SHARE TRANSACTIONS 11,080,926 10,199,956 45,686,823 Redemption Fees -- -- -- Net increase (decrease) in net assets 63,108,107 56,725,387 (50,468,736) - ----------------------------------------------------------------------------------------------------------- NET ASSETS Beginning of period 364,468,803 307,743,416 358,212,152 End of period 427,576,910 364,468,803 307,743,416 ------------ ------------- ------------ Undistributed (overdistributed) net investment income at end of period (643,460) 1,766,812 -- Accumulated net investment loss at end of period -- -- (8,463) COLUMBIA INTERNATIONAL EQUITY FUND --------------------------------------------- (UNAUDITED) SIX MONTHS PERIOD YEAR ENDED ENDED ENDED MARCH 31, SEPTEMBER 30, OCTOBER 31, INCREASE (DECREASE) IN NET ASSETS: 2004 ($) 2003 (a)($) 2002 ($) - ---------------------------------------------------------------------------------------------------------- OPERATIONS Net investment income (loss) 1,296,283 3,710,010 2,732,183 Net realized gain (loss) on investments sold, futures contracts, foreign currency transactions and foreign capital gains tax 36,422,015 (36,657,573) (215,475,392) Net change in unrealized appreciation/depreciation of investments, futures contracts, foreign currency translations and foreign capital gains tax 41,874,831 95,365,607 143,822,027 ------------ ------------- ------------ Net increase (decrease) resulting from operations 79,593,129 62,418,044 (68,921,182) - ---------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS From net investment income: Class A (1,624) (309) (158) Class B -- (51) (3,271) Class C -- (1) -- Class G -- -- (46,997) Class T (33,041) (276,228) (1,161,415) Class Z (2,868,268) (4,085,135) (10,992,572) From net realized gains: Class G -- -- -- Class T -- -- -- Class Z -- -- -- ------------ ------------- ------------ Total distributions to shareholders (2,902,933) (4,361,724) (12,204,413) - ---------------------------------------------------------------------------------------------------------- NET CAPITAL SHARE TRANSACTIONS 31,173,184 (85,708,897) (94,416,667) Redemption Fees 28,437 47,802 -- Net increase (decrease) in net assets 107,891,817 (27,604,775) (175,542,262) - ---------------------------------------------------------------------------------------------------------- NET ASSETS Beginning of period 394,584,484 422,189,259 597,731,521 End of period 502,476,301 394,584,484 422,189,259 ------------ ------------- ------------ Undistributed (overdistributed) net investment income at end of period 1,298,611 2,905,261 4,356,476 Accumulated net investment loss at end of period -- -- --
(a) The Fund changed its fiscal year end from October 31 to September 30. See Accompanying Notes to Financial Statements. 64-65 Spread STATEMENTS OF CHANGES IN NET ASSETS_____________________________________________ March 31, 2004 Columbia Equity Funds
COLUMBIA LARGE CAP CORE FUND -------------------------------------------- (UNAUDITED) SIX MONTHS PERIOD YEAR ENDED ENDED ENDED MARCH 31, SEPTEMBER 30, OCTOBER 31, INCREASE (DECREASE) IN NET ASSETS: 2004 ($) 2003 (a)($) 2002 ($) - ------------------------------------------------------------------------------------------------------- OPERATIONS Net investment income (loss) (110,088) 2,795,356 2,673,116 Net realized gain (loss) on investments sold, futures contracts and foreign currency transactions 36,084,486 (16,524,653) (2,843,956) Net change in unrealized appreciation/depreciation of investments, futures contracts and foreign currency translations 8,540,235 50,850,870 (132,810,615) ------------ ------------ ------------ Net increase (decrease) resulting from operations 44,514,633 37,121,573 (132,981,455) - ------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS From net investment income: Class A (3,718) (17,426) (64) Class B -- (86) -- Class C -- (41) -- Class G -- (34,472) -- Class T (53,896) (811,898) (264,222) Class Z (307,876) (2,057,027) (2,074,328) From net realized gains: Class A -- -- (2,049) Class B -- -- (3,781) Class C -- -- -- Class G -- -- (1,681,983) Class T -- -- (8,851,728) Class Z -- -- (15,146,836) ------------ ------------ ------------ Total distributions to shareholders (365,490) (2,920,950) (28,024,991) - ------------------------------------------------------------------------------------------------------- NET CAPITAL SHARE TRANSACTIONS (25,666,194) (171,845,720) (55,616,582) Net increase (decrease) in net assets 18,482,949 (137,645,097) (216,623,028) - ------------------------------------------------------------------------------------------------------- NET ASSETS Beginning of period 414,597,895 552,242,992 768,866,020 End of period 433,080,844 414,597,895 552,242,992 ------------ ------------ ------------ Undistributed (overdistributed) net investment income at end of period -- 193,079 319,232 Accumulated net investment loss at end of period (282,499) -- -- COLUMBIA SMALL CAP FUND ------------------------------------------------ (UNAUDITED) SIX MONTHS PERIOD YEAR ENDED ENDED ENDED MARCH 31, SEPTEMBER 30, OCTOBER 31, INCREASE (DECREASE) IN NET ASSETS: 2004 ($) 2003 (a)($) 2002 ($) - ----------------------------------------------------------------------------------------------------------- OPERATIONS Net investment income (loss) (1,523,062) 279,754 648,758 Net realized gain (loss) on investments sold, futures contracts and foreign currency transactions 30,448,594 36,226,379 37,781,019 Net change in unrealized appreciation/depreciation of investments, futures contracts and foreign currency translations 179,829,229 154,698,131 (69,887,913) -------------- -------------- ------------ Net increase (decrease) resulting from operations 208,754,761 191,204,264 (31,458,136) - ----------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS From net investment income: Class A -- -- -- Class B -- -- -- Class C -- -- -- Class G -- -- -- Class T -- -- -- Class Z -- (450,747) (445,097) From net realized gains: Class A (2,842,592) (23,427) (12,287) Class B (388,822) (27,700) (17,051) Class C (673,375) (2,462) -- Class G (236,658) (479,909) (532,460) Class T (3,762,956) (5,982,965) (9,651,542) Class Z (26,575,680) (25,553,703) (37,414,810) -------------- -------------- ------------ Total distributions to shareholders (34,480,083) (32,520,913) (48,073,247) - ----------------------------------------------------------------------------------------------------------- NET CAPITAL SHARE TRANSACTIONS 391,468,218 246,841,891 158,244,656 Net increase (decrease) in net assets 565,742,896 405,525,242 78,713,273 - ----------------------------------------------------------------------------------------------------------- NET ASSETS Beginning of period 1,015,728,137 610,202,895 531,489,622 End of period 1,581,471,033 1,015,728,137 610,202,895 -------------- -------------- ------------ Undistributed (overdistributed) net investment income at end of period -- 214,302 80,108 Accumulated net investment loss at end of period (1,308,760) -- -- COLUMBIA SMALL COMPANY EQUITY FUND -------------------------------------------- (UNAUDITED) SIX MONTHS PERIOD YEAR ENDED ENDED ENDED MARCH 31, SEPTEMBER 30, OCTOBER 31, INCREASE (DECREASE) IN NET ASSETS: 2004 ($) 2003 (A)($) 2002 ($) - ------------------------------------------------------------------------------------------------------- OPERATIONS Net investment income (loss) (1,976,905) (3,035,547) (3,342,769) Net realized gain (loss) on investments sold, futures contracts and foreign currency transactions 40,694,292 (200,156) (93,471,017) Net change in unrealized appreciation/depreciation of investments, futures contracts and foreign currency translations 47,683,562 77,738,196 (2,618,304) ------------ ------------ ------------ Net increase (decrease) resulting from operations 86,400,949 74,502,493 (99,432,090) - ------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS From net investment income: Class A -- -- -- Class B -- -- -- Class C -- -- -- Class G -- -- -- Class T -- -- -- Class Z -- -- -- From net realized gains: Class A -- -- -- Class B -- -- -- Class C -- -- -- Class G -- -- -- Class T -- -- -- Class Z -- -- -- ------------ ------------ ------------ Total distributions to shareholders -- -- -- - ------------------------------------------------------------------------------------------------------- NET CAPITAL SHARE TRANSACTIONS (28,536,543) 9,112,934 (34,442,508) Net increase (decrease) in net assets 57,864,406 83,615,427 (133,874,598) - ------------------------------------------------------------------------------------------------------- NET ASSETS Beginning of period 367,677,513 284,062,086 417,936,684 End of period 425,541,919 367,677,513 284,062,086 ------------ ------------ ------------ Undistributed (overdistributed) net investment income at end of period -- -- -- Accumulated net investment loss at end of period (1,985,793) (8,888) (7,647)
(a) The Fund changed its fiscal year end from October 31 to September 30. See Accompanying Notes to Financial Statements. 66-67 Spread STATEMENTS OF CHANGES IN NET ASSETS -- CAPITAL STOCK ACTIVITY___________________ March 31, 2004 Columbia Equity Funds
COLUMBIA ASSET ALLOCATION FUND ------------------------------------------------------------------------------------ (UNAUDITED) SIX MONTHS ENDED PERIOD ENDED YEAR ENDED MARCH 31, 2004 SEPTEMBER 30, 2003 (a)(b) OCTOBER 31, 2002 ------------------------- -------------------------- ------------------------- SHARES DOLLARS ($) SHARES DOLLARS ($) SHARES DOLLARS ($) ---------- ----------- ---------- ------------ ---------- ----------- CLASS A Subscriptions 68,167 1,016,501 90,623 1,246,966 153 1,942 Distributions reinvested 1,342 19,935 313 4,381 46 643 Redemptions (17,175) (260,029) (7,781) (105,877) (877) (12,593) ---------- ----------- ---------- ------------ ---------- ----------- Net increase (decrease) 52,334 776,407 83,155 1,145,470 (678) (10,008) CLASS B Subscriptions 104,967 1,564,617 175,332 2,371,280 132 2,002 Distributions reinvested 1,525 22,613 641 8,683 226 3,147 Redemptions (16,999) (254,686) (16,090) (219,790) (4,930) (69,201) ---------- ----------- ---------- ------------ ---------- ----------- Net increase (decrease) 89,493 1,332,544 159,883 2,160,173 (4,572) (64,052) CLASS C Subscriptions 14,102 211,163 15,733 208,308 -- -- Distributions reinvested 127 1,886 38 520 -- -- Redemptions (492) (7,328) (2,404) (32,872) -- -- ---------- ----------- ---------- ------------ ---------- ----------- Net increase 13,737 205,721 13,367 175,956 -- -- CLASS G Subscriptions 28,505 424,965 60,925 796,644 280,333 4,078,242 Distributions reinvested 25,701 380,632 49,383 643,841 63,424 882,934 Redemptions (729,149) (10,840,228) (1,779,909) (23,798,027) (1,754,424) (24,005,581) ---------- ----------- ---------- ------------ ---------- ----------- Net decrease (674,943) (10,034,631) (1,669,601) (22,357,542) (1,410,667) (19,044,405) CLASS T Subscriptions 506,459 7,550,827 948,459 12,980,478 1,681,657 23,448,832 Distributions reinvested 140,599 2,084,072 238,021 3,138,892 287,807 4,060,095 Redemptions (1,339,307) (20,003,339) (3,052,027) (39,894,205) (5,963,835) (82,540,616) ---------- ----------- ---------- ------------ ---------- ----------- Net decrease (692,249) (10,368,440) (1,865,547) (23,774,835) (3,994,371) (55,031,689) CLASS Z Subscriptions 541,841 8,094,780 1,650,315 21,698,761 2,688,275 38,817,973 Proceeds received in connection with merger -- -- 9,749,490 127,523,327 -- -- Distributions reinvested 153,538 2,274,315 279,463 3,688,536 246,822 3,482,666 Redemptions (2,161,027) (32,423,245) (8,860,695) (113,687,843) (5,622,405) (79,652,964) ---------- ----------- ---------- ------------ ---------- ----------- Net increase (decrease) (1,465,648) (22,054,150) 2,818,573 39,222,781 (2,687,308) (37,352,325)
COLUMBIA LARGE CAP GROWTH FUND ---------------------------------------------------------------------------------------- (UNAUDITED) SIX MONTHS ENDED PERIOD ENDED YEAR ENDED MARCH 31, 2004 SEPTEMBER 30, 2003 (a)(c) OCTOBER 31, 2002 -------------------------- --------------------------- --------------------------- SHARES DOLLARS ($) SHARES DOLLARS ($) SHARES DOLLARS ($) ---------- ------------ ----------- ------------ ----------- ------------ CLASS A Subscriptions 123,104 2,354,797 127,594 2,227,933 675 14,224 Distributions reinvested -- -- 8 122 -- -- Redemptions (42,945) (819,262) (23,849) (418,221) (31,158) (561,125) ---------- ------------ ----------- ------------ ----------- ------------ Net increase (decrease) 80,159 1,535,535 103,753 1,809,834 (30,483) (546,901) CLASS B Subscriptions 105,436 1,948,457 73,152 1,201,742 76 1,377 Distributions reinvested -- -- -- -- -- -- Redemptions (29,143) (541,345) (26,733) (445,675) (2,768) (52,491) ---------- ------------ ----------- ------------ ----------- ------------ Net increase (decrease) 76,293 1,407,112 46,419 756,067 (2,692) (51,114) CLASS C Subscriptions 18,368 332,486 53,880 875,203 -- -- Distributions reinvested -- -- -- -- -- -- Redemptions (16,944) (309,097) (23,002) (386,398) -- -- ---------- ------------ ----------- ------------ ----------- ------------ Net increase 1,424 23,389 30,878 488,805 -- -- CLASS G Subscriptions 56,033 995,902 137,178 2,112,439 402,662 7,699,620 Distributions reinvested -- -- -- -- -- -- Redemptions (385,587) (6,861,944) (1,043,026) (16,470,137) (1,070,412) (18,399,523) ---------- ------------ ----------- ------------ ----------- ------------ Net decrease (329,554) (5,866,042) (905,848) (14,357,698) (667,750) (10,699,903) CLASS T Subscriptions 311,492 5,903,940 1,601,558 26,623,304 3,309,526 62,313,532 Distributions reinvested -- -- 12 186 -- -- Redemptions (1,154,204) (21,943,544) (3,101,612) (50,338,825) (5,906,627) (109,994,675) ---------- ------------ ----------- ------------ ----------- ------------ Net decrease (842,712) (16,039,604) (1,500,042) (23,715,335) (2,597,101) (47,681,143) CLASS Z Subscriptions 3,499,512 67,823,405 8,605,204 145,302,438 10,670,158 208,441,606 Proceeds received in connection with merger -- -- -- -- -- -- Distributions reinvested 9,645 181,333 83,287 1,331,752 -- -- Redemptions (5,859,133) (113,554,323) (14,044,860) (232,788,723) (10,051,097) (192,318,065) ---------- ------------ ----------- ------------ ----------- ------------ Net increase (decrease) (2,349,976) (45,549,585) (5,356,369) (86,154,533) 619,061 16,123,541
(a) The Fund changed its fiscal year end from October 31 to September 30. (b) Effective November 18, 2002, the Galaxy Asset Allocation Fund Prime A, Prime B, Retail B, Retail A and Trust shares were reorganized as Liberty Asset Allocation Fund Class A, Class B, Class G, Class T and Class Z shares, respectively. Subsequently, the Fund began offering Class C shares. Effective October 13, 2003, the Liberty Asset Allocation Fund was renamed Columbia Asset Allocation Fund. (c) Effective November 18, 2002, the Galaxy Equity Growth Fund Prime A, Prime B, Retail B, Retail A and Trust shares were reorganized as Liberty Equity Growth Fund Class A, Class B, Class G, Class T and Class Z shares, respectively. Subsequently, the Fund began offering Class C shares. Effective October 13, 2003, the Liberty Equity Growth Fund was renamed Columbia Large Cap Growth Fund. See Accompanying Notes to Financial Statements. 68-69 Spread STATEMENTS OF CHANGES IN NET ASSETS - CAPITAL STOCK ACTIVITY____________________ March 31, 2004 Columbia Equity Funds
COLUMBIA DISCIPLINED VALUE FUND ------------------------------------------------------------------------------------ (UNAUDITED) SIX MONTHS ENDED PERIOD ENDED YEAR ENDED MARCH 31, 2004 SEPTEMBER 30, 2003 (a)(b) OCTOBER 31, 2002 ------------------------- ------------------------- -------------------------- SHARES DOLLARS ($) SHARES DOLLARS ($) SHARES DOLLARS ($) ---------- ----------- ---------- ----------- ---------- ------------ CLASS A Subscriptions 72,452 875,768 245,472 2,488,497 -- Distributions reinvested 1,417 17,119 -- -- -- -- Redemptions (11,269) (141,291) (163,507) (1,646,171) -- -- ---------- ----------- ---------- ----------- ---------- ------------ Net increase (decrease) 62,600 751,596 81,965 842,326 -- -- CLASS B Subscriptions 97,472 1,139,625 48,835 490,115 -- Distributions reinvested 295 3,481 -- -- -- -- Redemptions (5,103) (60,694) (16,616) (170,281) -- -- ---------- ----------- ---------- ----------- ---------- ------------ Net increase (decrease) 92,664 1,082,412 32,219 319,834 -- -- CLASS C Subscriptions 35,729 407,794 34,288 342,474 -- Distributions reinvested 30 347 -- -- -- -- Redemptions (16,835) (188,556) (32,040) (326,333) -- -- ---------- ----------- ---------- ----------- ---------- ------------ Net increase (decrease) 18,924 219,585 2,248 16,141 -- -- CLASS G Subscriptions 9,233 106,086 23,830 227,695 122,965 1,530,736 Distributions reinvested 2,531 29,834 -- -- 56,061 730,490 Redemptions (262,994) (3,041,642) (791,814) (7,910,003) (485,678) (5,357,577) ---------- ----------- ---------- ----------- ---------- ------------ Net decrease (251,230) (2,905,722) (767,984) (7,682,308) (306,652) (3,096,351) CLASS T Subscriptions 270,153 3,282,140 712,384 7,479,651 1,461,025 18,997,313 Distributions reinvested 107,544 1,301,298 -- -- 365,484 4,923,064 Redemptions (892,897) (10,869,884) (1,921,056) (19,161,516) (3,436,236) (42,048,389) ---------- ----------- ---------- ----------- ---------- ------------ Net decrease (515,200) (6,286,446) (1,208,672) (11,681,865) (1,609,727) (18,128,012) CLASS Z Subscriptions 3,771,406 46,556,604 8,245,789 85,258,557 8,229,129 103,359,201 Distributions reinvested 106,883 1,311,703 -- -- 281,992 3,849,192 Redemptions (2,419,572) (29,648,806) (5,518,932) (56,872,729) (3,316,907) (40,297,207) ---------- ----------- ---------- ----------- ---------- ------------ Net increase (decrease) 1,458,717 18,219,501 2,726,857 28,385,828 5,194,214 66,911,186
COLUMBIA INTERNATIONAL EQUITY FUND ---------------------------------------------------------------------------------------- (UNAUDITED) SIX MONTHS ENDED PERIOD ENDED YEAR ENDED MARCH 31, 2004 SEPTEMBER 30, 2003 (a)(c) OCTOBER 31, 2002 -------------------------- --------------------------- --------------------------- SHARES DOLLARS ($) SHARES DOLLARS ($) SHARES DOLLARS ($) ---------- ------------ ----------- ------------ ----------- ------------ CLASS A Subscriptions 41,006 505,852 365,782 3,760,494 43 500 Distributions reinvested 137 1,624 9 80 14 158 Redemptions (8,227) (97,878) (341,913) (3,639,588) (79) (773) ---------- ------------ ----------- ------------ ----------- ------------ Net increase (decrease) 32,916 409,598 23,878 120,986 (22) (115) CLASS B Subscriptions 57,206 678,799 63,174 632,499 -- -- Distributions reinvested -- -- 5 47 79 904 Redemptions (22,693) (261,063) (45,848) (459,615) (19,410) (169,123) ---------- ------------ ----------- ------------ ----------- ------------ Net increase (decrease) 34,513 417,736 17,331 172,931 (19,331) (168,219) CLASS C Subscriptions 69,999 820,676 136,603 1,296,905 -- -- Distributions reinvested -- -- -- -- -- -- Redemptions (63,084) (748,647) (136,000) (1,299,758) -- -- ---------- ------------ ----------- ------------ ----------- ------------ Net increase (decrease) 6,915 72,029 603 (2,853) -- -- CLASS G Subscriptions 4,112 49,057 7,418 69,394 29,664 335,436 Distributions reinvested -- -- -- -- 4,075 46,346 Redemptions (32,903) (398,712) (77,285) (731,060) (130,389) (1,400,567) ---------- ------------ ----------- ------------ ----------- ------------ Net decrease (28,791) (349,655) (69,867) (661,666) (96,650) (1,018,785) CLASS T Subscriptions 236,132 2,840,873 6,604,035 60,584,311 36,599,906 393,268,992 Distributions reinvested 2,717 32,174 29,476 267,640 93,635 1,067,845 Redemptions (540,242) (6,576,115) (7,380,277) (68,028,146) (37,921,896) (410,600,585) ---------- ------------ ----------- ------------ ----------- ------------ Net decrease (301,393) (3,703,068) (746,766) (7,176,195) (1,228,355) (16,263,748) CLASS Z Subscriptions 8,519,957 104,898,395 16,739,214 159,741,174 51,501,696 559,110,349 Distributions reinvested 34,063 410,115 125,382 1,158,531 339,109 3,916,708 Redemptions (5,753,345) (70,981,966) (25,020,075) (239,061,805) (58,357,513) (639,992,857) ---------- ------------ ----------- ------------ ----------- ------------ Net increase (decrease) 2,800,675 34,326,544 (8,155,479) (78,162,100) (6,516,708) (76,965,800)
(a) The Fund changed its fiscal year end from October 31 to September 30. (b) Effective November 25, 2002, the Galaxy Equity Value Fund Retail B, Retail A and Trust shares were reorganized as Liberty Equity Value Fund Class G, Class T and Class Z shares, respectively. Subsequently, the Fund began offering Class A, Class B and Class C shares. Effective October 13, 2003, the Liberty Equity Value Fund was renamed Columbia Disciplined Value Fund. (c) Effective November 18, 2002, the Galaxy International Equity Fund Prime A, Prime B, Retail B, Retail A and Trust shares were reorganized as Liberty International Equity Fund Class A, Class B, Class G, Class T and Class Z shares, respectively. Subsequently, the Fund began offering Class C shares. Effective October 13, 2003, the Liberty International Equity Fund was renamed Columbia International Equity Fund. See Accompanying Notes to Financial Statements. 70-71 Spread STATEMENTS OF CHANGES IN NET ASSETS - CAPITAL STOCK ACTIVITY____________________ March 31, 2004 Columbia Equity Funds
COLUMBIA LARGE CAP CORE FUND --------------------------------------------------------------------------------------- (UNAUDITED) SIX MONTHS ENDED PERIOD ENDED YEAR ENDED MARCH 31, 2004 SEPTEMBER 30, 2003 (a)(b) OCTOBER 31, 2002 ------------------------- --------------------------- --------------------------- SHARES DOLLARS ($) SHARES DOLLARS ($) SHARES DOLLARS ($) ---------- ----------- ----------- ------------ ----------- ------------ CLASS A Subscriptions 171,401 2,078,309 126,227 1,379,676 10 128 Proceeds received in connection with merger -- -- 621,521 6,454,752 -- -- Distributions reinvested 298 3,571 1,676 16,670 35 466 Redemptions (38,427) (462,312) (76,403) (794,588) (3,221) (40,839) ---------- ----------- ----------- ------------ ----------- ------------ Net increase (decrease) 133,272 1,619,568 673,021 7,056,510 (3,176) (40,245) CLASS B Subscriptions 158,542 1,864,192 162,123 1,730,382 -- -- Distributions reinvested -- -- 9 86 237 3,106 Redemptions (19,061) (229,773) (8,016) (85,754) (3,283) (31,132) ---------- ----------- ----------- ------------ ----------- ------------ Net increase (decrease) 139,481 1,634,419 154,116 1,644,714 (3,046) (28,026) CLASS C Subscriptions 40,693 476,927 32,690 332,435 -- -- Distributions reinvested -- -- 4 41 -- -- Redemptions (28,779) (340,553) (12,351) (121,881) -- -- ---------- ----------- ----------- ------------ ----------- ------------ Net increase 11,914 136,374 20,343 210,595 -- -- CLASS G Subscriptions 18,501 218,596 44,266 449,389 162,505 1,998,005 Proceeds received in connection with merger -- -- 1,226,272 12,420,359 -- -- Distributions reinvested -- -- 3,352 30,905 126,869 1,654,365 Redemptions (632,209) (7,446,672) (1,816,170) (18,640,817) (973,850) (10,728,602) ---------- ----------- ----------- ------------ ----------- ------------ Net increase (decrease) (613,708) (7,228,076) (542,280) (5,740,164) (684,476) (7,076,232) CLASS T Subscriptions 579,972 7,028,346 1,495,379 15,776,849 2,708,325 33,029,033 Distributions reinvested 4,431 52,863 82,213 836,757 675,947 8,936,751 Redemptions (1,406,881) (17,068,886) (2,878,020) (29,879,271) (5,908,323) (70,008,875) ---------- ----------- ----------- ------------ ----------- ------------ Net increase (decrease) (822,478) (9,987,677) (1,300,428) (13,265,665) (2,524,051) (28,043,091) CLASS Z Subscriptions 1,812,352 22,134,607 3,300,574 34,099,883 7,884,391 100,632,122 Proceeds received in connection with merger -- -- 6,658,543 69,340,646 -- -- Distributions reinvested 7,263 87,150 86,880 913,137 1,177,076 15,587,396 Redemptions (2,795,897) (34,062,559) (26,833,257) (266,105,376) (11,419,815) (136,648,506) ---------- ----------- ----------- ------------ ----------- ------------ Net increase (decrease) (976,282) (11,840,802) (16,787,260) (161,751,710) (2,358,348) (20,428,988)
COLUMBIA SMALL CAP FUND ---------------------------------------------------------------------------------------- (UNAUDITED) SIX MONTHS ENDED PERIOD ENDED YEAR ENDED MARCH 31, 2004 SEPTEMBER 30, 2003 (a)(c) OCTOBER 31, 2002 --------------------------- --------------------------- --------------------------- SHARES DOLLARS ($) SHARES DOLLARS ($) SHARES DOLLARS ($) ----------- ------------ ----------- ------------ ----------- ------------ CLASS A Subscriptions 8,492,956 144,659,580 4,098,552 58,433,179 11,215 157,443 Proceeds received in connection with merger -- -- -- -- -- -- Distributions reinvested 166,652 2,743,095 1,737 21,912 683 9,710 Redemptions (787,452) (13,652,642) (360,646) (5,358,656) (7,291) (105,884) ----------- ------------ ----------- ------------ ----------- ------------ Net increase (decrease) 7,872,156 133,750,033 3,739,643 53,096,435 4,607 61,269 CLASS B Subscriptions 1,761,569 29,139,652 756,403 10,430,015 9,728 132,259 Distributions reinvested 22,302 355,492 2,142 26,282 1,222 17,051 Redemptions (79,975) (1,306,663) (27,618) (373,156) (2,347) (33,156) ----------- ------------ ----------- ------------ ----------- ------------ Net increase (decrease) 1,703,896 28,188,481 730,927 10,083,141 8,603 116,154 CLASS C Subscriptions 3,020,177 49,654,610 869,296 12,200,290 -- -- Distributions reinvested 37,782 603,008 192 2,361 -- -- Redemptions (90,504) (1,494,569) (11,707) (147,824) -- -- ----------- ------------ ----------- ------------ ----------- ------------ Net increase 2,967,455 48,763,049 857,781 12,054,827 -- -- CLASS G Subscriptions 8,934 144,317 28,276 350,209 429,423 6,235,998 Proceeds received in connection with merger -- -- -- -- -- -- Distributions reinvested 14,619 230,995 38,236 465,333 38,027 526,290 Redemptions (45,300) (737,626) (99,176) (1,269,029) (111,919) (1,509,331) ----------- ------------ ----------- ------------ ----------- ------------ Net increase (decrease) (21,747) (362,314) (32,664) (453,487) 355,531 5,252,957 CLASS T Subscriptions 660,542 11,021,936 2,163,625 28,267,215 6,479,808 92,202,077 Distributions reinvested 221,143 3,611,263 453,371 5,680,741 665,372 9,395,064 Redemptions (739,238) (12,471,883) (2,947,006) (38,209,114) (5,121,259) (70,792,166) ----------- ------------ ----------- ------------ ----------- ------------ Net increase (decrease) 142,447 2,161,316 (330,010) (4,261,158) 2,023,921 30,804,975 CLASS Z Subscriptions 16,526,790 282,508,460 23,437,396 320,832,302 19,254,421 283,345,487 Proceeds received in connection with merger -- -- -- -- -- -- Distributions reinvested 1,091,816 18,124,146 1,461,938 18,622,287 2,024,954 28,972,951 Redemptions (7,086,146) (121,664,953) (11,858,363) (163,132,456) (13,389,656) (190,309,137) ----------- ------------ ----------- ------------ ----------- ------------ Net increase (decrease) 10,532,460 178,967,653 13,040,971 176,322,133 7,889,719 122,009,301
(a) The Fund changed its fiscal year end from October 31 to September 30. (b) Effective December 9, 2002, the Galaxy Large Cap Value Fund Prime A, Prime B, Retail B, Retail A and Trust shares were reorganized as Liberty Large Cap Core Fund (formerly known as Galaxy Growth & Income Fund) Class A, Class B, Class G, Class T and Class Z shares, respectively. Subsequently, the Fund began offering Class C shares. Effective October 13, 2003, the Liberty Large Cap Core Fund was renamed Columbia Large Cap Core Fund. (c) Effective November 18, 2002, the Galaxy Small Cap Value Fund Prime A, Prime B, Retail B, Retail A and Trust shares were reorganized as Liberty Small Cap Fund Class A, Class B, Class G, Class T and Class Z shares, respectively. Subsequently, the Fund began offering Class C shares. Effective October 13, 2003, the Liberty Small Cap Fund was renamed Columbia Small Cap Fund. See Accompanying Notes to Financial Statements. 72-73 Spread STATEMENTS OF CHANGES IN NET ASSETS - CAPITAL STOCK ACTIVITY____________________ March 31, 2004 Columbia Equity Funds
COLUMBIA SMALL COMPANY EQUITY FUND ------------------------------------------------------------------------------------- (UNAUDITED) SIX MONTHS ENDED PERIOD ENDED YEAR ENDED MARCH 31, 2004 SEPTEMBER 30, 2003 (a)(b) OCTOBER 31, 2002 ------------------------- -------------------------- -------------------------- SHARES DOLLARS ($) SHARES DOLLARS ($) SHARES DOLLARS ($) ---------- ----------- ---------- ------------ ---------- ------------ CLASS A Subscriptions 83,724 1,398,264 47,106 619,478 -- -- Redemptions (14,038) (229,659) (19,853) (248,570) -- -- ---------- ----------- ---------- ------------ ---------- ------------ Net increase 69,686 1,168,605 27,253 370,908 -- -- CLASS B Subscriptions 60,770 949,797 15,904 207,848 -- -- Redemptions (6,943) (108,072) (593) (5,872) -- -- ---------- ----------- ---------- ------------ ---------- ------------ Net increase 53,827 841,725 15,311 201,976 -- -- CLASS C Subscriptions 26,204 410,921 14,632 187,755 -- -- Redemptions (3,039) (48,210) (10,379) (127,847) -- -- ---------- ----------- ---------- ------------ ---------- ------------ Net increase 23,165 362,711 4,253 59,908 -- -- CLASS G Subscriptions 4,568 69,345 15,704 176,262 358,543 5,343,587 Redemptions (118,158) (1,789,044) (372,314) (4,494,902) (561,965) (7,654,692) ---------- ----------- ---------- ------------ ---------- ------------ Net decrease (113,590) (1,719,699) (356,610) (4,318,640) (203,422) (2,311,105) CLASS T Subscriptions 138,229 2,239,369 1,610,555 19,278,621 7,332,857 103,731,584 Redemptions (359,940) (5,937,027) (1,992,911) (23,497,418) (7,849,704) (111,618,506) ---------- ----------- ---------- ------------ ---------- ------------ Net decrease (221,711) (3,697,658) (382,356) (4,218,797) (516,847) (7,886,922) CLASS Z Subscriptions 2,538,182 43,834,089 8,255,053 107,075,672 5,263,829 81,621,271 Redemptions (4,015,525) (69,326,316) (6,917,009) (90,058,093) (7,195,424) (105,865,752) ---------- ----------- ---------- ------------ ---------- ------------ Net increase (decrease) (1,477,343) (25,492,227) 1,338,044 17,017,579 (1,931,595) (24,244,481)
(a) The Fund changed its fiscal year end from October 31 to September 30. (b) Effective November 18, 2002, the Galaxy Small Company Equity Fund Retail B, Retail A and Trust shares were reorganized as Liberty Small Company Equity Fund Class G, Class T and Class Z shares, respectively. Subsequently, the Fund began offering Class A, Class B and Class C shares. Effective October 13, 2003, the Liberty Small Company Equity Fund was renamed Columbia Small Company Equity Fund. See Accompanying Notes to Financial Statements. 74 NOTES TO FINANCIAL STATEMENTS___________________________________________________ March 31, 2004 (Unaudited) Columbia Equity Funds NOTE 1. ORGANIZATION The Columbia Funds Trust XI (the "Trust") is a Massachusetts business trust registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. Information presented in these financial statements pertains to the following diversified portfolios (individually referred to as a "Fund", collectively referred to as the "Funds"): Columbia Asset Allocation Fund Columbia Large Cap Growth Fund Columbia Disciplined Value Fund Columbia International Equity Fund Columbia Large Cap Core Fund Columbia Small Cap Fund Columbia Small Company Equity Fund INVESTMENT GOALS The Columbia Asset Allocation Fund seeks a high total return by providing both a current level of income greater than that provided by popular stock market averages, as well as long-term growth in the value of the Fund's assets. Columbia Large Cap Growth Fund, Columbia International Equity Fund and Columbia Small Cap Fund seek long term capital appreciation. Columbia Disciplined Value Fund seeks long term capital appreciation, with income as a secondary goal. Columbia Large Cap Core Fund seeks to provide a relatively high total return through long-term capital appreciation and current income. Columbia Small Company Equity Fund seeks capital appreciation. FUND SHARES The Funds may issue an unlimited number of shares. Each Fund offers six classes of shares: Class A, Class B, Class C, Class G, Class T and Class Z. Each share class has its own sales charge and expense structure. Effective March 1, 2004, the Columbia Small Cap Fund was closed to new investors. Class A and Class T shares are subject to a front-end sales charge of 5.75% based on the amount of initial investment. Class A and Class T shares purchased without an initial sales charge in accounts aggregating $1 million to $25 million at the time of purchase are subject to a 1.00% contingent deferred sales charge ("CDSC") on shares sold within eighteen months of the time of purchase. Class B and Class G shares are subject to a maximum CDSC of 5.00% based upon the holding period after purchase. Class B shares will convert to Class A shares in a certain number of years after purchase, depending on the program under which shares were purchased. Class G shares will convert to Class T shares in eight years after purchase. Class C shares are subject to a 1.00% CDSC on shares sold within one year after purchase. Class Z shares are offered continuously at net asset value. There are certain restrictions on the purchase of Class Z shares, as described in each Fund's prospectus. On October 13, 2003, the Liberty Asset Allocation Fund, Liberty Equity Growth Fund, Liberty Equity Value Fund, Liberty International Equity Fund, Liberty Large Cap Core Fund, Liberty Small Cap Fund and Liberty Small Company Equity Fund were renamed Columbia Asset Allocation Fund, Columbia Large Cap Growth Fund, Columbia Disciplined Value Fund, Columbia International Equity Fund, Columbia Large Cap Core Fund, Columbia Small Cap Fund and Columbia Small Company Equity Fund, respectively. Also on this date, the Liberty-Stein Roe Funds Investment Trust was renamed Columbia Funds Trust XI. NOTE 2. SIGNIFICANT ACCOUNTING POLICIES USE OF ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The following is a summary of significant accounting policies consistently followed by the Funds in the preparation of their financial statements. 75 ________________________________________________________________________________ March 31, 2004 (Unaudited) Columbia Equity Funds SECURITY VALUATION Equity securities are valued at the last sale price at the close of the principal exchange on which they trade. Unlisted securities or listed securities for which there were no sales during the day are valued at the closing bid price on such exchanges or over-the-counter markets. Debt securities generally are valued by a pricing service approved by the Funds' Board of Trustees, based upon market transactions for normal, institutional-size trading units of similar securities. The services may use various pricing techniques which take into account appropriate factors such as yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data, as well as broker quotes. Debt securities for which quotations are readily available are valued at an over-the-counter or exchange bid quotation. Certain debt securities, which tend to be more thinly traded and of lesser quality, are priced based on fundamental analysis of the financial condition of the issuer and the estimated value of any collateral. Valuations developed through pricing techniques may vary from the actual amounts realized upon sale of the securities, and the potential variation may be greater for those securities valued using fundamental analysis. Short-term debt obligations maturing within 60 days are valued at amortized cost, which approximates market value. Investments in other investment companies are valued at net asset value. Foreign securities are generally valued at the closing price on the foreign exchange or market on which they trade. If any foreign share prices are not readily available as a result of limited share activity, the securities are valued at the last sale price of the local shares in the principal market in which such securities are normally traded. Generally, trading in foreign securities is substantially completed each day at various times prior to the close of the New York Stock Exchange ("NYSE"). The values of such securities used in computing the net asset value of the Funds' shares are determined as of such times. Foreign currency exchange rates are generally determined at 2:00 p.m. Eastern (U.S.) time. Occasionally, events affecting the values of such foreign securities and such exchange rates may occur between the times at which they are determined and the close of the customary trading session of the NYSE, which would not be reflected in the computation of the Funds' net asset value. If events materially affecting the values of such foreign securities occur and it is determined that market quotations are not reliable, then these foreign securities will be valued at their fair value using procedures approved by the Board of Trustees. Investments for which market quotations are not readily available, or quotations which management believes are not appropriate, are valued at fair value under procedures approved by the Board of Trustees. SECURITY TRANSACTIONS Security transactions are accounted for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes. REPURCHASE AGREEMENTS Each Fund may engage in repurchase agreement transactions with institutions that the Funds' investment advisor has determined are creditworthy. The Funds, through their custodian, receive delivery of underlying securities collateralizing a repurchase agreement. Collateral is at least equal, at all times, to the value of the repurchase obligation including interest. A repurchase agreement transaction involves certain risks in the event of default or insolvency of the counterparty. These risks include possible delays or restrictions upon each Fund's ability to dispose of the underlying securities and a possible decline in the value of the underlying securities during the period while the Funds seek to assert their rights. INCOME RECOGNITION Interest income is recorded on the accrual basis. Premium and discount are amortized and accreted, respectively, on all debt securities. Corporate actions and dividend income are recorded on the ex-date, except for certain foreign securities which are recorded as soon after ex-date as the Fund becomes aware of such, net of non-reclaimable tax withholdings. FOREIGN CURRENCY TRANSACTIONS The values of all assets and liabilities quoted in foreign currencies are translated into U.S. dollars at that day's exchange rates. Net realized and unrealized 76 ________________________________________________________________________________ March 31, 2004 (Unaudited) Columbia Equity Funds gains (losses) on foreign currency transactions include gains (losses) arising from the fluctuation in exchange rates between trade and settlement dates on securities transactions, gains (losses) arising from the disposition of foreign currency and currency gains (losses) between the accrual and payment dates on dividends, interest income and foreign withholding taxes. For financial statement purposes, the Funds do not distinguish that portion of gains (losses) on investments which is due to changes in foreign exchange rates from that which is due to changes in market prices of the investments. Such fluctuations are included with the net realized and unrealized gains (losses) on investments. DETERMINATION OF CLASS NET ASSET VALUES All income, expenses (other than class-specific expenses, as shown on the Statement of Operations) and realized and unrealized gains (losses), are allocated to each class of a Fund on a daily basis, based on the relative net assets of each class, for purposes of determining the net asset value of each class. FEDERAL INCOME TAX STATUS Each Fund intends to qualify each year as a "regulated investment company" under Subchapter M of the Internal Revenue Code, as amended, and will distribute substantially all of its taxable income, if any, for its tax year, and as such will not be subject to federal income taxes. In addition, by distributing in each calendar year substantially all of its net investment income, capital gains and certain other amounts, if any, each Fund will not be subject to federal excise tax. Therefore, no federal income or excise tax provision is recorded. FOREIGN CAPITAL GAINS TAXES Realized gains in certain countries may be subject to foreign taxes at the fund level, at rates ranging from approximately 10% to 30%. The Funds accrue for such foreign taxes on net realized and unrealized gains at the appropriate rate for each jurisdiction. DISTRIBUTIONS TO SHAREHOLDERS Dividends from net investment income are declared and paid quarterly for each Fund, with the exception of the Columbia International Equity Fund. The Columbia International Equity Fund declares and pays dividends annually. Net realized capital gains, if any, are distributed at least annually. NOTE 3. FEDERAL TAX INFORMATION The tax character of distributions paid during the period ended September 30, 2003 and the year ended October 31, 2002 was as follows: SEPTEMBER 30, 2003 ------------------------------ ORDINARY LONG-TERM INCOME CAPITAL GAINS ----------- ------------- Columbia Asset Allocation Fund ...... $ 8,302,859 $ -- Columbia Large Cap Growth Fund ...... 2,326,344 -- Columbia International Equity Fund... 4,361,724 -- Columbia Large Cap Core Fund ........ 2,920,950 -- Columbia Small Cap Fund ............. 8,797,912 23,723,001 OCTOBER 31, 2002 ------------------------------ ORDINARY LONG-TERM INCOME CAPITAL GAINS ----------- ------------- Columbia Asset Allocation Fund....... $ 8,939,420 $ -- Columbia Disciplined Value Fund...... -- 10,519,279 Columbia International Equity Fund... 12,204,413 -- Columbia Large Cap Core Fund......... 2,339,161 25,685,830 Columbia Small Cap Fund.............. 8,625,684 39,447,563 77 ________________________________________________________________________________ March 31, 2004 (Unaudited) Columbia Equity Funds Unrealized appreciation and depreciation at March investments for federal income tax purposes, excluding any unrealized appreciation and depreciation from changes in the value of assets and liabilities resulting from changes in exchange rates, was:
UNREALIZED UNREALIZED NET UNREALIZED APPRECIATION DEPRECIATION APPRECIATION -------------- -------------- -------------- Columbia Asset Allocation Fund....... $ 66,332,429 $ (7,949,098) $ 58,383,331 Columbia Large Cap Growth Fund....... 180,311,442 (15,350,106) 164,961,336 Columbia Disciplined Value Fund...... 60,537,550 (8,740,186) 51,797,364 Columbia International Equity Fund... 92,078,368 (3,684,549) 88,393,819 Columbia Large Cap Core Fund......... 42,701,366 (8,805,846) 33,895,520 Columbia Small Cap Fund.............. 314,912,315 (62,762,146) 252,150,169 Columbia Small Company Equity Fund... 106,348,161 (10,462,597) 95,885,564
The following capital loss carryforwards, determined as of September 30, 2003, may be available to reduce taxable income arising from future net realized gains on investments, if any, to the extent permitted by the Internal Revenue Code:
COLUMBIA COLUMBIA COLUMBIA ASSET LARGE CAP DISCIPLINED ALLOCATION GROWTH VALUE YEAR OF EXPIRATION FUND* FUND FUND ------------------------------------- -------------- -------------- -------------- 2007................................. $ 260,595 $ -- $ -- 2008................................. 330,406 -- -- 2009................................. -- 41,527,758 -- 2010................................. 28,548,737 99,339,708 65,721,738 2011................................. 5,941,365 22,217,091 -- -------------- -------------- -------------- Total................................ $ 35,081,103 $ 163,084,557 $ 65,721,738 -------------- -------------- --------------
COLUMBIA COLUMBIA COLUMBIA INTERNATIONAL LARGE CAP COLUMBIA SMALL COMPANY EQUITY CORE SMALL CAP EQUITY YEAR OF EXPIRATION FUND* FUND FUND FUND -------------------- ------------- -------------- -------------- -------------- 2008................ $ 4,901,661 $ -- $ -- $ -- 2009................ 104,830,434 -- -- 7,702,742 2010................ 219,682,429 2,882,225 -- 93,115,978 2011................ 36,290,283 16,616,641 -- -- ------------- -------------- -------------- -------------- Total............... $ 365,704,807 $ 19,498,866 $ -- $ 100,818,720 ------------- -------------- -------------- --------------
*The availability of a portion of these capital loss carryforwards ($591,001 with respect to the Columbia Asset Allocation Fund and $4,901,661 with respect to the Columbia International Equity Fund), which were acquired on August 20, 2001 in connection with The Pillar Funds reorganization, may be limited in a given year. 78 ________________________________________________________________________________ March 31, 2004 (Unaudited) Columbia Equity Funds Expired capital loss carryforwards, if any, are recorded as a reduction of paid-in capital. Utilization of these capital loss carryforwards above could be subject to merger limitations imposed by the Internal Revenue Code. NOTE 4. FEES AND COMPENSATION PAID TO AFFILIATES INVESTMENT ADVISORY FEE Columbia Management Advisors, Inc. ("Columbia") is the investment advisor to the Funds. Prior to April 1, 2004, Columbia was an indirect, wholly owned subsidiary of FleetBoston Financial Corporation ("FleetBoston"). Effective April 1, 2004, FleetBoston was acquired by Bank of America Corporation ("BOA"). Columbia receives a monthly investment advisory fee based on average daily net assets from each of the Funds (excluding Columbia International Equity Fund and Columbia Small Company Equity Fund) as follows: ANNUAL FEE AVERAGE DAILY NET ASSETS RATE ------------------------ ------ First $500 million 0.75% Next $500 million 0.70% Next $500 million 0.65% Next $500 million 0.60% Over $2 billion 0.55% For the period July 1, 2003 through October 31, 2003, Columbia voluntarily waived its investment advisory fee of the Columbia Asset Allocation Fund by 0.03% annually of the Fund's average daily net assets. Columbia receives a monthly investment advisory fee based on average daily net assets of the Columbia International Equity Fund as follows: ANNUAL FEE AVERAGE DAILY NET ASSETS RATE ------------------------ ------ First $50 million 1.15% Next $50 million 0.95% Over $100 million 0.85% Columbia has voluntarily agreed to waive a portion of its investment advisory fee for the Columbia International Equity Fund at an annual rate of 0.25% on the Fund's average daily net assets. Columbia, at its discretion, may revise or discontinue this arrangement any time. Columbia receives a monthly investment advisory fee based on average daily net assets of the Columbia Small Company Equity Fund as follows: ANNUAL FEE AVERAGE DAILY NET ASSETS RATE ------------------------ ------ First $500 million 0.75% Next $500 million 0.70% Over $1 billion 0.65% Prior to November 1, 2003, Columbia was entitled to receive a monthly investment advisory fee from each Fund (excluding Columbia International Equity Fund) at the annual rate of 0.75% of each Fund's average daily net assets. In addition, Columbia also waived a portion of its investment advisory fee so that such fees payable by the Funds were as follows: ANNUAL FEE AVERAGE DAILY NET ASSETS RATE ------------------------ ------ First $500 million 0.75% Next $500 million 0.70% Next $500 million 0.65% Next $500 million 0.60% Over $2 billion 0.55% For the six months ended March 31, 2004, the annualized effective investment advisory fee rates for the Funds were as follows: ANNUAL FEE RATE ------ Columbia Asset Allocation Fund 0.74% Columbia Large Cap Growth Fund 0.72% Columbia Disciplined Value Fund 0.75% Columbia International Equity Fund 0.64% Columbia Large Cap Core Fund 0.75% Columbia Small Cap Fund 0.70% Columbia Small Company Equity Fund 0.75% ADMINISTRATION FEE Columbia provides accounting and other services to the Funds for a monthly administration fee at the annual rate of 0.067% of each Fund's average daily net assets. PRICING AND BOOKKEEPING FEES Columbia is responsible for providing pricing and bookkeeping services to the Funds under a pricing and bookkeeping agreement. Under a separate agreement (the "Outsourcing Agreement"), Columbia has delegated those functions to State Street Corporation 79 ________________________________________________________________________________ March 31, 2004 (Unaudited) Columbia Equity Funds ("State Street"). Columbia pays the total fees collected to State Street under the Outsourcing Agreement. Under its pricing and bookkeeping agreement with the Funds, Columbia receives an annual fee, in addition to fees for pricing services, based on the average daily net assets of each Fund as follows: ANNUAL AVERAGE DAILY NET ASSETS FEE -------------------------------------------- --------- Under $50 million $ 25,000 Over $50 million but less than $200 million $ 35,000 Over $200 million but less than $500 million $ 50,000 Over $500 million but less than $1 billion $ 85,000 Over $1 billion $ 125,000 The annual fees for a Fund with more than 25% in non-domestic assets, as measured on a monthly basis, will be 150% of the fees disclosed above. For multiple class funds, Columbia is entitled to receive an additional $10,000 per fund. For the six months ended March 31, 2004, the annualized effective pricing and bookkeeping fee rates for the Funds were as follows: ANNUAL FEE RATE -------- Columbia Asset Allocation Fund 0.031% Columbia Large Cap Growth Fund 0.011% Columbia Disciplined Value Fund 0.014% Columbia International Equity Fund 0.018% Columbia Large Cap Core Fund 0.013% Columbia Small Cap Fund 0.009% Columbia Small Company Equity Fund 0.014% TRANSFER AGENT FEE Columbia Funds Services, Inc. (the "Transfer Agent"), formerly Liberty Funds Services, Inc., an indirect, wholly owned subsidiary of BOA, provides shareholder services to the Funds. For such services, the Transfer Agent receives a fee, paid monthly, at the annual rate of $28.00 per open account. The Transfer Agent also receives reimbursement for certain out-of-pocket expenses. Prior to November 1, 2003, the Transfer Agent was entitled to receive a monthly transfer agent fee based on a per-account charge or a minimum of $5,000 annually. The Transfer Agent was also entitled to receive reimbursement for certain out-of-pocket expenses. The Transfer Agent has voluntarily agreed to waive a portion of its transfer agent fee for the Columbia International Equity Fund, Columbia Large Cap Core Fund and Columbia Small Company Equity Fund. These arrangements may be revised or discontinued by the Transfer Agent at any time. For the period January 1, 2004 through March 31, 2004, the Transfer Agent waived fees for the Funds as follows: FEES WAIVED --------- Columbia International Equity Fund $ 15,708 Columbia Large Cap Core Fund 4,491 Columbia Small Company Equity Fund 9,072 For the period October 1, 2003 through December 31, 2003, the Transfer Agent waived transfer agent fees as follows: FEES WAIVED --------------------- CLASS G CLASS T --------- --------- Columbia International Equity Fund $ 3,326 $ 12,336 Columbia Large Cap Core Fund 4,341 -- Columbia Small Company Equity Fund -- 9,209 UNDERWRITING DISCOUNTS, SERVICE AND DISTRIBUTION FEES Columbia Funds Distributor, Inc. (the "Distributor"), formerly Liberty Funds Distributor, Inc., an indirect, wholly owned subsidiary of BOA, is the principal underwriter of the Funds. For the six months ended March 31, 2004, the Distributor has retained net underwriting discounts and CDSC fees as follows: 80 ________________________________________________________________________________ March 31, 2004 (Unaudited) Columbia Equity Funds
FRONT-END SALES CHARGE CDSC ------------------- --------------------------------------------------- CLASS A CLASS T CLASS A CLASS B CLASS C CLASS G CLASS T --------- ------- ------- -------- ------- -------- ------- Columbia Asset Allocation Fund.................. $ 3,106 $ 3,446 $ -- $ 4,463 $ 40 $ -- $ -- Columbia Large Cap Growth Fund...................... 5,512 9,125 -- 1,603 26 70,210 -- Columbia Disciplined Value Fund...... 2,650 2,986 -- 646 -- 10,041 -- Columbia International Equity Fund... 1,723 956 -- 7 -- 4,769 -- Columbia Large Cap Core Fund......... 5,451 4,011 -- 2,144 88 22,349 -- Columbia Small Cap Fund.............. 187,175 4,265 5 19,950 7,994 10,007 2 Columbia Small Company Equity Fund... 5,177 1,473 -- -- 10 6,342 --
The Funds have adopted a 12b-1 plan (the "Plan") which requires the payment of a monthly service and distribution fee to the Distributor based on the average daily net assets of each Fund at the following annual rates: DISTRIBUTION FEE ----------------------------------------- CLASS A CLASS B CLASS C CLASS G ------- ------- ------- ------- Columbia Asset Allocation Fund....... 0.10% 0.75% 0.75% 0.65% Columbia Large Cap Growth Fund....... 0.10% 0.75% 0.75% 0.65% Columbia Disciplined Value Fund...... 0.10% 0.75% 0.75% 0.65% Columbia International Equity Fund... 0.10% 0.75% 0.75% 0.65% Columbia Large Cap Core Fund......... 0.10% 0.75% 0.75% 0.65% Columbia Small Cap Fund.............. 0.10% 0.75% 0.75% 0.65% Columbia Small Company Equity Fund... 0.10% 0.75% 0.75% 0.65% SERVICE FEE ----------------------------------------- CLASS A CLASS B CLASS C CLASS G ------- ------- ------- ------- Columbia Asset Allocation Fund....... 0.25% 0.25% 0.25% 0.50% Columbia Large Cap Growth Fund....... 0.25% 0.25% 0.25% 0.50% Columbia Disciplined Value Fund...... 0.25% 0.25% 0.25% 0.50% Columbia International Equity Fund... 0.25% 0.25% 0.25% 0.50% Columbia Large Cap Core Fund......... 0.25% 0.25% 0.25% 0.50% Columbia Small Cap Fund.............. 0.25% 0.25% 0.25% 0.50% Columbia Small Company Equity Fund... 0.25% 0.25% 0.25% 0.50% The Funds do not intend to pay total distribution and service fees in excess of 0.25% and 0.95% annually for Class A and Class G shares of each Fund, respectively. The CDSC and the fees received from the Plan are used principally as repayment to the Distributor for amounts paid by the Distributor to dealers who sold such shares. SHAREHOLDER SERVICES FEES The Funds have adopted shareholder services plans that permit them to pay for certain services provided to Class T shareholders by their financial advisors. The annual service fee may equal up to 0.50% for Class T shares. The Funds do not intend to pay more than 0.30% annually for Class T shareholder service fees. CUSTODY CREDITS Each Fund has an agreement with its custodian bank under which custody fees may be reduced by balance credits. The Funds could have invested a portion of the assets utilized in connection with the expense offset arrangement in an income-producing asset if they had not entered into such an agreement. FEES PAID TO OFFICERS AND DIRECTORS The Funds pay no compensation to their officers, all of whom are employees of Columbia or its affiliates. The Funds' Trustees may participate in a deferred compensation plan which may be terminated at any time. Obligations of the plan will be paid solely out of the Funds' assets. 81 ________________________________________________________________________________ March 31, 2004 (Unaudited) Columbia Equity Funds NOTE 5. PORTFOLIO INFORMATION For the six months ended March 31, 2004, the cost of purchases and proceeds from sales of securities, excluding short-term obligations, were as follows: OTHER INVESTMENT SECURITIES --------------------------------- PURCHASES SALES -------------- -------------- Columbia Asset Allocation Fund.......... $ 192,859,183 $ 231,477,645 Columbia Large Cap Growth Fund.......... 758,416,551 814,443,353 Columbia Disciplined Value Fund......... 192,753,655 184,741,321 Columbia International Equity Fund...... 225,759,985 202,257,793 Columbia Large Cap Core Fund............ 269,644,471 303,526,320 Columbia Small Cap Fund................. 441,991,325 115,712,835 Columbia Small Company Equity Fund...... 137,751,680 161,579,743 U.S. GOVERNMENT SECURITIES --------------------------------- PURCHASES SALES -------------- -------------- Columbia Asset Allocation Fund.......... $ 14,088,393 $ 14,922,447 NOTE 6. REDEMPTION FEES Effective February 15, 2003, the Columbia International Equity Fund began imposing a 2.00% redemption fee to shareholders of Class Z shares who redeem shares held for 60 days or less. Redemption fees, which are retained by the Fund, are accounted for as an addition to paid-in capital and are allocated to each class proportionately for purposes of determining the net asset value of each class. Prior to October 9, 2003, redemption fees were recorded as a component of paid-in capital on Class Z shares. For the six months ended March 31, 2004, the redemption fees for the Class Z shares of the Columbia International Equity Fund amounted to $28,437. NOTE 7. LINE OF CREDIT The Funds and other affiliated funds participate in a $350,000,000 credit facility, which is used for temporary or emergency purposes to facilitate portfolio liquidity. Interest is charged to the Funds based on its borrowings. In addition, the Funds have agreed to pay commitment fees on its pro-rata portion of the unutilized line of credit. The commitment fee is included in "Other expenses" on the Statement of Operations. For the six months ended March 31, 2004, the Funds did not borrow under this arrangement. NOTE 8. DISCLOSURE OF SIGNIFICANT RISKS AND CONTINGENCIES FOREIGN SECURITIES There are certain additional risks involved when investing in foreign securities that are not inherent with investments in domestic securities. These risks may involve foreign currency exchange rate fluctuations, adverse political and economic developments and the possible prevention of currency exchange or other foreign governmental laws or restrictions. In addition, the liquidity of foreign securities may be more limited than that of domestic securities. Investments in emerging market countries are subject to additional risk. The risk of foreign investments is typically increased in less developed countries. These countries are also more likely to experience high levels of inflation, deflation or currency devaluation which could hurt their economies and securities markets. HIGH-YIELD SECURITIES Investing in high-yield securities may involve greater credit risk and considerations not typically associated with investing in U.S. Government bonds and other higher quality fixed income securities. These securities are non-investment grade securities, often referred to as "junk bonds." Economic downturns may disrupt the high yield market and impair the ability of issuers to repay principal and interest. Also, an increase in interest rates would likely have an adverse impact on the value of such obligations. Moreover, high-yield securities may be less liquid due to the extent that 82 ________________________________________________________________________________ March 31, 2004 (Unaudited) Columbia Equity Funds there is no established retail secondary market and because of a decline in the value of such securities. INDUSTRY FOCUS The Funds may focus their investments in certain industries, subjecting them to greater risks than funds that are more diversified. LEGAL PROCEEDINGS Columbia, the Distributor, and certain of their affiliates (collectively, "The Columbia Group") have received information requests and subpoenas from various regulatory and law enforcement authorities in connection with their investigations of late trading and market timing in mutual funds. The Columbia Group has not uncovered any instances where Columbia or the Distributor were knowingly involved in late trading of mutual fund shares. On February 24, 2004, the Securities and Exchange Commission ("SEC") filed a civil complaint in the United States District Court for the District of Massachusetts against Columbia and the Distributor, alleging that they had violated certain provisions of the federal securities laws in connection with trading activity in mutual fund shares. Also on February 24, 2004, the New York Attorney General ("NYAG") filed a civil complaint in New York Supreme Court, County of New York against Columbia and the Distributor alleging that Columbia and the Distributor had violated certain New York anti-fraud statutes. If either Columbia or the Distributor is unsuccessful in its defense of these proceedings, it could be barred from serving as an investment advisor or distributor for any investment company registered under the Investment Company Act of 1940, as amended (a "registered investment company"). Such results could prevent Columbia, the Distributor or any company that is an affiliated person of Columbia and the Distributor from serving as an investment advisor or distributor for any registered investment company, including your fund. Your fund has been informed by Columbia and the Distributor that, if these results occur, they will seek exemptive relief from the SEC to permit them to continue to serve as your fund's investment advisor and distributor. There is no assurance that such exemptive relief will be granted. On March 15, 2004, Columbia and the Distributor entered into agreements in principle with the SEC Division of Enforcement and NYAG in settlement of the charges. Under the agreements, Columbia and the Distributor agreed, inter alia, to the following conditions: payment of $70 million in disgorgement; payment of $70 million in civil penalties; an order requiring Columbia and the Distributor to cease and desist from violations of the antifraud provisions and other provisions of the federal securities laws; governance changes designed to maintain the independence of the mutual fund boards of trustees and ensure compliance with securities laws and their fiduciary duties; and retention of an independent consultant to review Columbia's and the Distributor's compliance policies and procedures. The agreement requires the final approval of the SEC. In a separate agreement with the NYAG, the Columbia Group has agreed to reduce mutual fund fees by $80 million over a five-year period. As a result of these matters or any adverse publicity or other developments resulting from them, there may be increased redemptions or reduced sales of fund shares, which could increase transaction costs or operating expenses, or have other adverse consequences for the funds. For the six months ended March 31, 2004, Columbia has assumed legal, consulting services and Trustees' fees incurred by the Funds in connection with these matters as follows: Columbia Asset Allocation Fund $ 3,215 Columbia Large Cap Growth Fund 6,792 Columbia Disciplined Value Fund 2,895 Columbia International Equity Fund 3,341 Columbia Large Cap Core Fund 2,945 Columbia Small Cap Fund 10,616 Columbia Small Company Equity Fund 2,876 NOTE 9. SUBSEQUENT EVENT On April 1, 2004, FleetBoston, including the Funds' investment advisor and distributor, was acquired by BOA. The merger did not change the way the Funds are managed, the investment personnel assigned to manage the Funds or the fees paid by the Funds. NOTE 10. COMPARABILITY OF FINANCIAL STATEMENTS The fiscal year end of the Funds was changed from October 31 to September 30. Accordingly, the Funds' 2004 fiscal year end will be September 30, 2004. NOTE 11. BUSINESS COMBINATIONS AND MERGERS As of the end of business on November 15, 2002, the Stein Roe Balanced Fund, a separate series of the Trust, merged into the Trust shares of Galaxy Asset Allocation Fund. The Galaxy Asset Allocation Fund received a tax-free transfer of assets from the Stein Roe Balanced Fund as follows: 83 ________________________________________________________________________________ March 31, 2004 (Unaudited) Columbia Equity Funds SHARES NET ASSETS UNREALIZED ISSUED RECEIVED APPRECIATION 1 --------------- ------------- ---------------- 9,749,490 $ 127,523,327 $ 8,523,537 NET ASSETS NET ASSETS NET ASSETS OF STEIN ROE OF GALAXY ASSET OF GALAXY ASSET BALANCED FUND ALLOCATION FUND ALLOCATION FUND IMMEDIATELY IMMEDIATELY PRIOR TO PRIOR TO AFTER COMBINATION COMBINATION COMBINATION --------------- ------------- ---------------- $441,389,479 $127,523,327 $568,912,806 1 Unrealized appreciation is included in the Net Assets Received amount shown above. Also as of the end of business on November 15, 2002, subsequent to the merger described above, the Galaxy Asset Allocation Fund, previously a fund of The Galaxy Fund ("Galaxy"), a separate Massachusetts business trust, was reorganized as the Liberty Asset Allocation Fund (currently known as Columbia Asset Allocation Fund). Class A, Class B, Class G, Class T and Class Z shares were issued in exchange for Prime A, Prime B, Retail B, Retail A and Trust shares, respectively. Class C shares commenced operations on November 18, 2002. Also as of the end of business on November 15, 2002, the Galaxy Equity Growth Fund, previously a fund of Galaxy, was reorganized as the Liberty Equity Growth Fund (currently known as Columbia Large Cap Growth Fund) with Class A, Class B, Class G, Class T and Class Z shares issued in exchange for Prime A, Prime B, Retail B, Retail A and Trust shares, respectively. Class C shares commenced operations on November 18, 2002. As of the end of business on November 22, 2002, the Galaxy Equity Value Fund, previously a fund of Galaxy, was reorganized as the Liberty Equity Value Fund (currently known as Columbia Disciplined Value Fund) with Class G, Class T and Class Z shares issued in exchange for Retail B, Retail A and Trust shares, respectively. Class A, Class B and Class C shares commenced operations on November 25, 2002. As of the end of business on November 15, 2002, the Galaxy International Equity Fund, previously a fund of Galaxy, was reorganized as the Liberty International Equity Fund (currently known as Columbia International Equity Fund) with Class A, Class B, Class G, Class T and Class Z shares issued in exchange for Prime A, Prime B, Retail B, Retail A and Trust shares, respectively. Class C shares commenced operations on November 18, 2002. As of the end of business on December 6, 2002, the Galaxy Large Cap Value Fund, Retail A, Retail B and Trust shares merged into the Galaxy Growth & Income Fund, Prime A, Retail B and Trust shares, respectively. The Galaxy Large Cap Value Fund and Galaxy Growth & Income Fund were both previously funds of Galaxy. The Galaxy Growth & Income Fund received a tax-free transfer of assets from Galaxy Large Cap Value Fund as follows: SHARES NET ASSETS UNREALIZED ISSUED RECEIVED APPRECIATION 1 --------------- -------------- ------------- 8,506,336 $ 88,215,75 $ 3,841,144 NET ASSETS OF NET ASSETS OF NET ASSETS OF GALAXY LARGE GALAXY GROWTH GALAXY GROWTH CAP VALUE FUND & INCOME FUND & INCOME FUND IMMEDIATELY IMMEDIATELY PRIOR TO PRIOR TO AFTER COMBINATION COMBINATION COMBINATION --------------- ------------- ------------- $ 560,578,780 $ 88,215,757 $ 648,794,537 1 Unrealized appreciation is included in the Net Assets Received amount shown above. Also as of the end of business on December 6, 2002, subsequent to the merger described above, the Galaxy Growth & Income Fund was reorganized as the Liberty Large Cap Core Fund (currently known as Columbia Large Cap Core Fund). Class A, Class B, Class G, Class T and Class Z shares were issued in exchange for Prime A, Prime B, Retail B, Retail A and Trust shares, respectively. Class C shares commenced operations on December 9, 2002. As of the end of business on November 15, 2002, the Galaxy Small Cap Value Fund, previously a fund of Galaxy, was reorganized as the Liberty Small Cap Fund (currently known as Columbia Small Cap Fund) with Class A, Class B, Class G, Class T and Class Z shares issued in exchange for Prime A, Prime B, Retail B, Retail A and Trust shares, respectively. Class C shares commenced operations on November 18, 2002. As of the end of business on November 15, 2002, the Galaxy Small Company Equity Fund, previously a fund of Galaxy, was reorganized as the Liberty Small Company Equity Fund (currently known as Columbia Small Company Equity Fund) with Class G, Class T and Class Z shares issued in exchange for Retail B, Retail A and Trust shares, respectively. Class A, Class B and Class C shares commenced operations on November 18, 2002. The accompanying statements of operations, statements of changes in net assets and financial highlights for these funds represent the historical operations of the Galaxy Asset Allocation Fund, Galaxy Equity Growth Fund, Galaxy International Equity Fund, Galaxy Small Cap Value Fund and Galaxy Small Company Equity Fund for periods prior to November 15, 2002, and the Galaxy Equity Value Fund for periods prior to November 22, 2002 and the Galaxy Growth & Income Fund for periods prior to December 6, 2002. 84 This page intentionally left blank. FINANCIAL HIGHLIGHTS____________________________________________________________ Columbia Asset Allocation Fund SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED) SIX MONTHS PERIOD ENDED ENDED MARCH 31, SEPTEMBER 30, CLASS A SHARES 2004 (a) 2003 (b)(c) - ---------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 14.01 $ 12.86 - ---------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.10(e) 0.20(e) Net realized and unrealized gain (loss) on investments 1.44 1.17 ---------- ------------- Total from investment operations 1.54 1.37 - ---------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income (0.17) (0.22) From net realized gains -- -- ---------- ------------- Total distributions declared to shareholders (0.17) (0.22) - ---------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 15.38 $ 14.01 Total return (g)(h) 11.03%(i) 10.80%(i) - ---------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (j) 1.40%(k) 1.49%(k) Net investment income (j) 1.36%(k) 1.55%(k) Waiver/reimbursement 0.01%(k) 0.01%(k) Portfolio turnover rate 44%(i) 122%(i) Net assets, end of period (000's) $ 2,134 $ 1,211 - ----------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31, ---------------------------------------------------- CLASS A SHARES 2002 2001 2000 1999 (d) - ------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 14.95 $ 18.77 $ 17.73 $ 16.95 - ------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.26(f) 0.34(e) 0.39(e) 0.44 Net realized and unrealized gain (loss) on investments (2.12)(f) (3.06) 1.36 1.17 ------- -------- ------- -------- Total from investment operations (1.86) (2.72) 1.75 1.61 - ------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income (0.23) (0.36) (0.40) (0.40) From net realized gains -- (0.74) (0.31) (0.43) ------- -------- ------- -------- Total distributions declared to shareholders (0.23) (1.10) (0.71) (0.83) - ------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 12.86 $ 14.95 $ 18.77 $ 17.73 Total return (g)(h) (12.53)% (15.08)% 10.15% 9.72% - ------------------------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (j) 1.40% 1.26% 1.15% 1.16% Net investment income (j) 1.73%(f) 2.07% 2.15% 2.27% Waiver/reimbursement 0.13% 0.12% 0.15% 0.13% Portfolio turnover rate 40% 65% 59% 135% Net assets, end of period (000's) $ 43 $ 60 $ 186 $ 238 - -------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Asset Allocation Fund was renamed the Columbia Asset Allocation Fund. (b) The Fund changed its fiscal year end from October 31 to September 30. (c) On November 18, 2002, the Galaxy Asset Allocation Fund, Prime A shares were redesignated Liberty Asset Allocation Fund, Class A shares. (d) The Fund began offering Prime A shares on November 1, 1998. (e) Per share data was calculated using average shares outstanding during the period. (f) The Trust adopted the provisions of the AICPA Audit Guide for Investment Companies effective November 1, 2001. The effect of the changes for the year ended October 31, 2002 on the net investment income per share, net realized and unrealized gain per share and the net ratio of net investment income to average net assets is $(0.01), $0.01 and (0.05)%, respectively. (g) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (h) Had the Investment Advisor and/or any of its affiliates not waived or reimbursed a portion of expenses, total return would have been reduced. (i) Not annualized. (j) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (k) Annualized. 86 FINANCIAL HIGHLIGHTS____________________________________________________________ Columbia Asset Allocation Fund SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED) SIX MONTHS PERIOD ENDED ENDED MARCH 31, SEPTEMBER 30, CLASS B SHARES 2004 (a) 2003 (b)(c) - ------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 14.00 $ 12.85 - ------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.05(e) 0.12(e) Net realized and unrealized gain (loss) on investments 1.43 1.17 ---------- ------------- Total from investment operations 1.48 1.29 - ------------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income (0.11) (0.14) From net realized gains -- -- ---------- ------------- Total distributions declared to shareholders (0.11) (0.14) - ------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 15.37 $ 14.00 Total return (g) 10.58%(h)(i) 10.13%(h)(i) - ------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (j) 2.16%(k) 2.17%(k) Net investment income (j) 0.62%(k) 0.95%(k) Waiver/reimbursement 0.01%(k) 0.01%(k) Portfolio turnover rate 44%(i) 122%(i) Net assets, end of period (000's) $ 4,164 $ 2,539 - -------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31, ---------------------------------------------------- CLASS B SHARES 2002 2001 2000 1999 (d) - -------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 14.93 $ 18.75 $ 17.71 $ 16.95 - -------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.14(f) 0.22(e) 0.26(e) 0.29 Net realized and unrealized gain (loss) on investments (2.08)(f) (3.06) 1.35 1.19 ------- -------- ------- --------- Total from investment operations (1.94) (2.84) 1.61 1.48 - -------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income (0.14) (0.24) (0.26) (0.29) From net realized gains -- (0.74) (0.31) (0.43) ------- -------- ------- --------- Total distributions declared to shareholders (0.14) (0.98) (0.57) (0.72) - -------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 12.85 $ 14.93 $ 18.75 $ 17.71 Total return (g) (13.06)% (15.68)%(h) 9.29%(h) 8.91%(h) - -------------------------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (j) 2.06% 1.99% 1.89% 1.90% Net investment income (j) 1.07%(f) 1.34% 1.41% 1.53% Waiver/reimbursement -- 0.04% 0.17% 0.18% Portfolio turnover rate 40% 65% 59% 135% Net assets, end of period (000's) $ 276 $ 389 $ 526 $ 519 - --------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Asset Allocation Fund was renamed the Columbia Asset Allocation Fund. (b) The Fund changed its fiscal year end from October 31 to September 30. (c) On November 18, 2002, the Galaxy Asset Allocation Fund, Prime B shares were redesignated Liberty Asset Allocation Fund, Class B shares. (d) The Fund began offering Prime B shares on November 1, 1998. (e) Per share data was calculated using average shares outstanding during the period. (f) The Trust adopted the provisions of the AICPA Audit Guide for Investment Companies effective November 1, 2001. The effect of the changes for the year ended October 31, 2002 on the net investment income per share, net realized and unrealized gain per share and the net ratio of net investment income to average net assets is $(0.01), $0.01 and (0.05)%, respectively. (g) Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge. (h) Had the Investment Advisor and/or any of its affiliates not waived or reimbursed a portion of expenses, total return would have been reduced. (i) Not annualized. (j) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (k) Annualized. 87 FINANCIAL HIGHLIGHTS____________________________________________________________ Columbia Asset Allocation Fund SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED) SIX MONTHS PERIOD ENDED ENDED MARCH 31, SEPTEMBER 30, CLASS C SHARES 2004 (a) 2003 (b)(c) - ---------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 14.00 $ 13.08 - ---------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (d) 0.05 0.10 Net realized and unrealized gain on investments 1.44 0.93 ----------- ------------- Total from investment operations 1.49 1.03 - ---------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income (0.11) (0.11) - ---------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 15.38 $ 14.00 Total return (e)(f)(g) 10.64% 7.93% - ---------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (h)(i) 2.17% 2.28% Net investment income (h)(i) 0.63% 0.85% Waiver/reimbursement (i) 0.01% 0.01% Portfolio turnover rate (g) 44% 122% Net assets, end of period (000's) $ 417 $ 187 - ----------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Asset Allocation Fund was renamed the Columbia Asset Allocation Fund. (b) The Fund changed its fiscal year end from October 31 to September 30. (c) Class C shares were initially offered on November 18, 2002. Per share data and total return reflect activity from that date. (d) Per share data was calculated using average shares outstanding during the period. (e) Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge. (f) Had the Investment Advisor and/or any of its affiliates not waived or reimbursed a portion of expenses, total return would have been reduced. (g) Not annualized. (h) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (i) Annualized. 88 FINANCIAL HIGHLIGHTS____________________________________________________________ Columbia Asset Allocation Fund SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED) SIX MONTHS PERIOD ENDED ENDED MARCH 31, SEPTEMBER 30, CLASS G SHARES 2004 (a) 2003 (b)(c) - ---------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 14.00 $ 12.84 - ---------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.05(d) 0.12(d) Net realized and unrealized gain (loss) on investments 1.43 1.17 ----------- ------------- Total from investment operations 1.48 1.29 - ---------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income (0.11) (0.13) From net realized gains -- -- ----------- ------------- Total distributions declared to shareholders (0.11) (0.13) - ---------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 15.37 $ 14.00 Total return (f) 10.59%(g)(h) 10.12%(g)(h) - ---------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (i) 2.14%(j) 2.19%(j) Net investment income (i) 0.65%(j) 1.02%(j) Waiver/reimbursement 0.01%(j) 0.01%(j) Portfolio turnover rate 44%(h) 122%(h) Net assets, end of period (000's) $ 51,547 $ 56,383 - ----------------------------------------------------------------------------
YEAR ENDED OCTOBER 31, ------------------------------------------------------------------------- CLASS G SHARES 2002 2001 2000 1999 1998 - ------------------------------------------------------------------------------------------------------------------ NET ASSET VALUE, BEGINNING OF PERIOD $ 14.92 $ 18.74 $ 17.70 $ 16.92 $ 16.43 - ------------------------------------------------------------------------------------------------------------------ INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.14(e) 0.22(d) 0.24(d) 0.25 0.29 Net realized and unrealized gain (loss) on investments (2.08)(e) (3.06) 1.36 1.21 1.71 -------- --------- --------- ---------- ---------- Total from investment operations (1.94) (2.84) 1.60 1.46 2.00 - ------------------------------------------------------------------------------------------------------------------ LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income (0.14) (0.24) (0.25) (0.25) (0.30) From net realized gains -- (0.74) (0.31) (0.43) (1.21) -------- --------- --------- ---------- ---------- Total distributions declared to shareholders (0.14) (0.98) (0.56) (0.68) (1.51) - ------------------------------------------------------------------------------------------------------------------ NET ASSET VALUE, END OF PERIOD $ 12.84 $ 14.92 $ 18.74 $ 17.70 $ 16.92 Total return (f) (13.08)%(g) (15.72)%(g) 9.20% 8.76% 13.14% - ------------------------------------------------------------------------------------------------------------------ RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (i) 2.09% 2.01% 1.99% 2.00% 1.99% Net investment income (i) 1.04%(e) 1.33% 1.31% 1.43% 1.77% Waiver/reimbursement 0.03% 0.01% -- -- -- Portfolio turnover rate 40% 65% 59% 135% 108% Net assets, end of period (000's) $ 73,183 $ 106,074 $ 105,980 $ 91,199 $ 57,876 - ------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Asset Allocation Fund was renamed the Columbia Asset Allocation Fund. (b) The Fund changed its fiscal year end from October 31 to September 30. (c) On November 18, 2002, the Galaxy Asset Allocation Fund, Retail B shares were redesignated Liberty Asset Allocation Fund, Class G shares. (d) Per share data was calculated using average shares outstanding during the period. (e) The Trust adopted the provisions of the AICPA Audit Guide for Investment Companies effective November 1, 2001. The effect of the changes for the year ended October 31, 2002 on the net investment income per share, net realized and unrealized gain per share and the net ratio of net investment income to average net assets is $(0.01), $0.01 and (0.05)%, respectively. (f) Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge. (g) Had the Investment Advisor and/or any of its affiliates not waived or reimbursed a portion of expenses, total return would have been reduced. (h) Not annualized. (i) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (j) Annualized. 89 FINANCIAL HIGHLIGHTS____________________________________________________________ Columbia Asset Allocation Fund SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED) SIX MONTHS PERIOD ENDED ENDED MARCH 31, SEPTEMBER 30, CLASS T SHARES 2004 (a) 2003 (b)(c) - ---------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 14.01 $ 12.87 - ---------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.10(d) 0.21(d) Net realized and unrealized gain (loss) on investments 1.43 1.16 ----------- ------------- Total from investment operations 1.53 1.37 - ---------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income (0.16) (0.23) From net realized gains -- -- ----------- ------------- Total distributions declared to shareholders (0.16) (0.23) - ---------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 15.38 $ 14.01 Total return (f) 11.00%(g)(h) 10.75%(g)(h) - ---------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (i) 1.47%(j) 1.49%(j) Net investment income (i) 1.33%(j) 1.73%(j) Waiver/reimbursement 0.01%(j) 0.01%(j) Portfolio turnover rate 44%(h) 122%(h) Net assets, end of period (000's) $ 197,475 $ 189,580 - ----------------------------------------------------------------------------
YEAR ENDED OCTOBER 31, ------------------------------------------------------------------------- CLASS T SHARES 2002 2001 2000 1999 1998 - ------------------------------------------------------------------------------------------------------------------ NET ASSET VALUE, BEGINNING OF PERIOD $ 14.95 $ 18.79 $ 17.74 $ 16.95 $ 16.46 - ------------------------------------------------------------------------------------------------------------------ INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.25(e) 0.33(d) 0.37(d) 0.37 0.38 Net realized and unrealized gain (loss) on investments (2.09)(e) (3.08) 1.36 1.21 1.72 -------- --------- --------- ---------- ---------- Total from investment operations (1.84) (2.75) 1.73 1.58 2.10 - ------------------------------------------------------------------------------------------------------------------ LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income (0.24) (0.35) (0.37) (0.36) (0.40) From net realized gains -- (0.74) (0.31) (0.43) (1.21) -------- --------- --------- ---------- ---------- Total distributions declared to shareholders (0.24) (1.09) (0.68) (0.79) (1.61) - ------------------------------------------------------------------------------------------------------------------ NET ASSET VALUE, END OF PERIOD $ 12.87 $ 14.95 $ 18.79 $ 17.74 $ 16.95 Total return (f) (12.45)%(g) (15.18)%(g) 9.98% 9.53% 13.85% - ------------------------------------------------------------------------------------------------------------------ RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (i) 1.37% 1.33% 1.29% 1.32% 1.33% Net investment income (i) 1.76%(e) 2.01% 2.01% 2.11% 2.43% Waiver/reimbursement 0.01% 0.01% -- -- -- Portfolio turnover rate 40% 65% 59% 135% 108% Net assets, end of period (000's) $198,154 $ 289,882 $ 371,590 $ 389,077 $ 323,498 - ------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Asset Allocation Fund was renamed the Columbia Asset Allocation Fund. (b) The Fund changed its fiscal year end from October 31 to September 30. (c) On November 18, 2002, the Galaxy Asset Allocation Fund, Retail A shares were redesignated Liberty Asset Allocation Fund, Class T shares. (d) Per share data was calculated using average shares outstanding during the period. (e) The Trust adopted the provisions of the AICPA Audit Guide for Investment Companies effective November 1, 2001. The effect of the changes for the year ended October 31, 2002 on the net investment income per share, net realized and unrealized gain per share and the net ratio of net investment income to average net assets is $(0.01), $0.01 and (0.05)%, respectively. (f) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (g) Had the Investment Advisor and/or any of its affiliates not waived or reimbursed a portion of expenses, total return would have been reduced. (h) Not annualized. (i) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (j) Annualized. 90 FINANCIAL HIGHLIGHTS____________________________________________________________ Columbia Asset Allocation Fund Selected data for a share outstanding throughout each period is as follows:
(UNAUDITED) SIX MONTHS PERIOD ENDED ENDED MARCH 31, SEPTEMBER 30, CLASS Z SHARES 2004 (a) 2003 (b)(c) - ---------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 14.01 $ 12.87 - ---------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.12(d) 0.25(d) Net realized and unrealized gain (loss) on investments 1.43 1.16 ----------- ------------- Total from investment operations 1.55 1.41 - ---------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income (0.19) (0.27) From net realized gains -- -- ----------- ------------- Total distributions declared to shareholders (0.19) (0.27) - ---------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 15.37 $ 14.01 Total return (f) 11.12%(g)(h) 11.07%(g)(h) - ---------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (i) 1.17%(j) 1.16%(j) Net investment income (i) 1.63%(j) 2.04%(j) Waiver/reimbursement 0.01%(j) 0.01%(j) Portfolio turnover rate 44%(h) 122%(h) Net assets, end of period (000's) $ 216,660 $ 217,935 - ----------------------------------------------------------------------------
YEAR ENDED OCTOBER 31, ------------------------------------------------------------------------- CLASS Z SHARES 2002 2001 2000 1999 1998 - ------------------------------------------------------------------------------------------------------------------ NET ASSET VALUE, BEGINNING OF PERIOD $ 14.94 $ 18.78 $ 17.73 $ 16.96 $ 16.47 - ------------------------------------------------------------------------------------------------------------------ INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.29(e) 0.37(d) 0.41(d) 0.40 0.42 Net realized and unrealized gain (loss) on investments (2.09)(e) (3.08) 1.36 1.20 1.71 -------- --------- --------- ---------- ---------- Total from investment operations (1.80) (2.71) 1.77 1.60 2.13 - ------------------------------------------------------------------------------------------------------------------ LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income (0.27) (0.39) (0.41) (0.40) (0.43) From net realized gains -- (0.74) (0.31) (0.43) (1.21) -------- --------- --------- ---------- ---------- Total distributions declared to shareholders (0.27) (1.13) (0.72) (0.83) (1.64) - ------------------------------------------------------------------------------------------------------------------ NET ASSET VALUE, END OF PERIOD $ 12.87 $ 14.94 $ 18.78 $ 17.73 $ 16.96 Total return (f) (12.23)%(g) (14.94)% 10.21% 9.63% 14.05% - ------------------------------------------------------------------------------------------------------------------ RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (i) 1.12% 1.11% 1.09% 1.12% 1.13% Net investment income (i) 2.01%(e) 2.23% 2.21% 2.31% 2.63% Waiver/reimbursement 0.03% -- -- -- -- Portfolio turnover rate 40% 65% 59% 135% 108% Net assets, end of period (000's) $163,934 $ 230,562 $ 290,970 $ 269,851 $ 218,666 - ------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Asset Allocation Fund was renamed the Columbia Asset Allocation Fund. (b) The Fund changed its fiscal year end from October 31 to September 30. (c) On November 18, 2002, the Galaxy Asset Allocation Fund, Trust shares were redesignated Liberty Asset Allocation Fund, Class Z shares. (d) Per share data was calculated using average shares outstanding during the period. (e) The Trust adopted the provisions of the AICPA Audit Guide for Investment Companies effective November 1, 2001. The effect of the changes for the year ended October 31, 2002 on the net investment income per share, net realized and unrealized gain per share and the net ratio of net investment income to average net assets is $(0.01), $0.01 and (0.05)%, respectively. (f) Total return at net asset value assuming all distributions reinvested. (g) Had the Investment Advisor and/or any of its affiliates not waived or reimbursed a portion of expenses, total return would have been reduced. (h) Not annualized. (i) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (j) Annualized. 91 FINANCIAL HIGHLIGHTS____________________________________________________________ Columbia Large Cap Growth Fund SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED) SIX MONTHS PERIOD ENDED ENDED MARCH 31, SEPTEMBER 30, CLASS A SHARES 2004 (a) 2003 (b)(c) - ---------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 17.59 $ 16.06 - ---------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) (0.04)(e) (0.05)(e) Net realized and unrealized gain (loss) on investments 1.89 1.61 ----------- ------------- Total from investment operations 1.85 1.56 - ---------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income -- (0.03) From net realized gains -- -- ----------- ------------- Total distributions declared to shareholders -- (0.03) ----------- ------------- NET ASSET VALUE, END OF PERIOD $ 19.44 $ 17.59 Total return (f)(g) 10.52%(h) 9.72%(h) - ---------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (i) 1.27%(j) 1.30%(j) Net investment income (loss)(i) (0.41)%(j) (0.30)%(j) Waiver/reimbursement --%(j)(k) 0.02%(j) Portfolio turnover rate 76%(h) 91%(h) Net assets, end of period (000's) $ 3,644 $ 1,887 - ----------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31, ------------------------------------------------- CLASS A SHARES 2002 2001 2000 1999(d) - ---------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 19.74 $ 32.31 $ 28.95 $ 24.49 - ---------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) 0.03(e) (0.02) (0.05)(e) (0.01) Net realized and unrealized gain (loss) on investments (3.71) (8.92) 5.13 6.37 ------- -------- ------- -------- Total from investment operations (3.68) (8.94) 5.08 6.36 - ---------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income -- -- -- -- From net realized gains -- (3.63) (1.72) (1.90) ------- -------- ------- -------- Total distributions declared to shareholders -- (3.63) (1.72) (1.90) - ---------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 16.06 $ 19.74 $ 32.31 $ 28.95 Total return (f)(g) (18.64)% (30.43)% 18.36% 27.30% - ---------------------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (i) 1.12% 1.13% 1.12% 1.14% Net investment income (loss)(i) 0.14% (0.10)% (0.17)% (0.05)% Waiver/reimbursement 0.05% 0.03% 0.11% 0.14% Portfolio turnover rate 43% 48% 54% 53% Net assets, end of period (000's) $ 56 $ 671 $ 142 $ 107 - ----------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Equity Growth Fund was renamed the Columbia Large Cap Growth Fund. (b) The Fund changed its fiscal year end from October 31 to September 30. (c) On November 18, 2002, the Galaxy Equity Growth Fund, Prime A shares were redesignated Liberty Equity Growth Fund, Class A shares. (d) The Fund began issuing Prime A shares on November 1, 1998. (e) Per share data was calculated using average shares outstanding during the period. (f) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (g) Had the Investment Advisor and/or any of its affiliates not waived or reimbursed a portion of expenses, total return would have been reduced. (h) Not annualized. (i) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (j) Annualized. (k) Rounds to less than 0.01%. 92 FINANCIAL HIGHLIGHTS____________________________________________________________ Columbia Large Cap Growth Fund SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED) SIX MONTHS PERIOD ENDED ENDED MARCH 31, SEPTEMBER 30, CLASS B SHARES 2004 (a) 2003 (b)(c) - ------------------------------------------------------------------------------------------ NET ASSET VALUE, BEGINNING OF PERIOD $ 16.96 $ 15.57 - ------------------------------------------------------------------------------------------ INCOME FROM INVESTMENT OPERATIONS: Net investment loss (0.11)(e) (0.14)(e) Net realized and unrealized gain (loss) on investments 1.82 1.53 ---------- ------------- Total from investment operations 1.71 1.39 - ------------------------------------------------------------------------------------------ LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net realized gains -- -- - ------------------------------------------------------------------------------------------ NET ASSET VALUE, END OF PERIOD $ 18.67 $ 16.96 Total return (f)(g) 10.08%(h) 8.93%(h) - ------------------------------------------------------------------------------------------ RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (i) 2.03%(j) 2.13%(j) Net investment loss (i) (1.17)%(j) (0.97)%(j) Waiver/reimbursement --%(j)(k) 0.02%(j) Portfolio turnover rate 76%(h) 91%(h) Net assets, end of period (000's) $ 2,539 $ 1,013 - ------------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31, ------------------------------------------------- CLASS B SHARES 2002 2001 2000 1999(d) - ---------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 19.32 $ 31.94 $ 28.84 $ 24.49 - ---------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (0.14)(e) (0.19) (0.29)(e) (0.10) Net realized and unrealized gain (loss) on investments (3.61) (8.80) 5.11 6.35 ------- -------- ------- -------- Total from investment operations (3.75) (8.99) 4.82 6.25 - ---------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net realized gains -- (3.63) (1.72) (1.90) - ---------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 15.57 $ 19.32 $ 31.94 $ 28.84 Total return (f)(g) (19.41)% (31.00)% 17.48% 26.79% - ---------------------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (i) 1.99% 1.95% 1.87% 1.87% Net investment loss (i) (0.73)% (0.92)% (0.92)% (0.78)% Waiver/reimbursement 0.05% 0.03% 0.15% 0.32% Portfolio turnover rate 43% 48% 54% 53% Net assets, end of period (000's) $ 207 $ 309 $ 450 $ 246 - ----------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Equity Growth Fund was renamed the Columbia Large Cap Growth Fund. (b) The Fund changed its fiscal year end from October 31 to September 30. (c) On November 18, 2002, the Galaxy Equity Growth Fund, Prime B shares were redesignated Liberty Equity Growth Fund, Class B shares. (d) The Fund began issuing Prime B shares on November 1, 1998. (e) Per share data was calculated using average shares outstanding during the period. (f) Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge. (g) Had the Investment Advisor and/or any of its affiliates not waived or reimbursed a portion of expenses, total return would have been reduced. (h) Not annualized. (i) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (j) Annualized. (k) Rounds to less than 0.01%. 93 FINANCIAL HIGHLIGHTS____________________________________________________________ Columbia Large Cap Growth Fund SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED) SIX MONTHS ENDED PERIOD ENDED MARCH 31, SEPTEMBER 30, CLASS C SHARES 2004 (a) 2003 (b)(c) - ------------------------------------------------------------------------------ NET ASSET VALUE, BEGINNING OF PERIOD $ 16.98 $ 16.04 - ------------------------------------------------------------------------------ INCOME FROM INVESTMENT OPERATIONS: Net investment loss (d) (0.11) (0.13) Net realized and unrealized gain on investments 1.82 1.07 ----------- ------------- Total from investment operations 1.71 0.94 - ------------------------------------------------------------------------------ NET ASSET VALUE, END OF PERIOD $ 18.69 $ 16.98 Total return (e)(f)(g) 10.07% 5.86% - ------------------------------------------------------------------------------ RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (h)(i) 2.03% 2.00% Net investment loss (h)(i) (1.17)% (0.92)% Waiver/reimbursement (i) --%(j) 0.02% Portfolio turnover rate (g) 76% 91% Net assets, end of period (000's) $ 604 $ 524 - ------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Equity Growth Fund was renamed the Columbia Large Cap Growth Fund. (b) The Fund changed its fiscal year end from October 31 to September 30. (c) Class C shares were initially offered on November 18, 2002. Per share data and total return reflect activity from that date. (d) Per share data was calculated using average shares outstanding during the period. (e) Total return at net asset value assuming no contingent deferred sales charge. (f) Had the Investment Advisor and/or any of its affiliates not waived or reimbursed a portion of expenses, total return would have been reduced. (g) Not annualized. (h) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (i) Annualized. (j) Rounds to less than 0.01%. 94 FINANCIAL HIGHLIGHTS____________________________________________________________ Columbia Large Cap Growth Fund SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED) SIX MONTHS PERIOD ENDED ENDED MARCH 31, SEPTEMBER 30, CLASS G SHARES 2004 (a) 2003 (b)(c) - ---------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 16.43 $ 15.11 - ---------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (0.10)(d) (0.15)(d) Net realized and unrealized gain (loss) on investments 1.75 1.47 ---------- ------------- Total from investment operations 1.65 1.32 - ---------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: In excess of net investment income -- -- From net realized gains -- -- ---------- ------------- Total distributions declared to shareholders -- -- - ---------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 18.08 $ 16.43 Total return (f) 10.04%(g)(h) 8.66%(g)(h) - ---------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (i) 2.04%(j) 2.31%(j) Net investment loss (i) (1.18)%(j) (1.02)%(j) Waiver/reimbursement --%(j)(k) 0.02%(j) Portfolio turnover rate 76%(g) 91%(g) Net assets, end of period (000's) $ 54,428 $ 54,850 - ----------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31, --------------------------------------------------------------------------- CLASS G SHARES 2002 2001 2000 1999 1998 - --------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 18.79 $ 31.22 $ 28.27 $ 24.07 $ 24.91 - --------------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (0.17)(d) (0.21) (0.35)(d) (0.20) (0.16)(d) Net realized and unrealized gain (loss) on investments (3.51) (8.59) 5.02 6.30 3.16 -------- --------- --------- ---------- ---------- Total from investment operations (3.68) (8.80) 4.67 6.10 3.00 - --------------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS In excess of net investment income -- -- -- -- --(e) From net realized gains -- (3.63) (1.72) (1.90) (3.84) -------- --------- --------- ---------- ---------- Total distributions declared to shareholders -- (3.63) (1.72) (1.90) (3.84) - --------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 15.11 $ 18.79 $ 31.22 $ 28.27 $ 24.07 Total return (f) (19.49)%(h) (31.16)%(h) 17.29%(h) 26.63%(h) 13.98% - --------------------------------------------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (i) 2.18% 2.11% 2.07% 2.05% 2.04% Net investment loss (i) (0.92)% (1.08)% (1.11)% (0.96)% (0.68)% Waiver/reimbursement 0.07% 0.02% 0.02% 0.03% -- Portfolio turnover rate 43% 48% 54% 53% 60% Net assets, end of period (000's) $ 64,156 $ 92,292 $ 130,347 $ 71,525 $ 34,693 - ---------------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Equity Growth Fund was renamed the Columbia Large Cap Growth Fund. (b) The Fund changed its fiscal year end from October 31 to September 30. (c) On November 18, 2002, the Galaxy Equity Growth Fund, Retail B shares were redesignated Liberty Equity Growth Fund, Class G shares. (d) Per share data was calculated using average shares outstanding during the period. (e) Rounds to less than $0.01 per share. (f) Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge. (g) Not annualized. (h) Had the Investment Advisor and/or any of its affiliates not waived or reimbursed a portion of expenses, total return would have been reduced. (i) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (j) Annualized. (k) Rounds to less than 0.01%. 95 FINANCIAL HIGHLIGHTS____________________________________________________________ Columbia Large Cap Growth Fund SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED) SIX MONTHS PERIOD ENDED ENDED MARCH 31, SEPTEMBER 30, CLASS T SHARES 2004 (a) 2003 (b)(c) - ---------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 17.50 $ 15.98 - ---------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) (0.05)(d) (0.02)(d) Net realized and unrealized gain (loss) on investments 1.89 1.54 ----------- ------------- Total from investment operations 1.84 1.52 - ---------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income -- -- In excess of net investment income -- -- From net realized gains -- -- ----------- ------------- Total distributions declared to shareholders -- -- - ---------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 19.34 $ 17.50 Total return (f) 10.51%(g)(h) 9.51%(g)(h) - ---------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (i) 1.35%(j) 1.45%(j) Net investment income (loss)(i) (0.49)%(j) (0.16)%(j) Waiver/reimbursement --%(j)(k) 0.02%(j) Portfolio turnover rate 76%(g) 91%(g) Net assets, end of period (000's) $ 244,262 $ 235,849 - ----------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31, ---------------------------------------------------------------------- CLASS T SHARES 2002 2001 2000 1999 1998 - --------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 19.70 $ 32.31 $ 28.99 $ 24.47 $ 25.14 - --------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) (0.02)(d) (0.07) (0.10)(d) (0.06) 0.01 Net realized and unrealized gain (loss) on investments (3.70) (8.91) 5.14 6.48 3.19 -------- --------- --------- ---------- ---------- Total from investment operations (3.72) (8.98) 5.04 6.42 3.20 - --------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income -- -- -- -- (0.03) In excess of net investment income -- -- -- -- --(e) From net realized gains -- (3.63) (1.72) (1.90) (3.84) -------- --------- --------- ---------- ---------- Total distributions declared to shareholders -- (3.63) (1.72) (1.90) (3.87) - --------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 15.98 $ 19.70 $ 32.31 $ 28.99 $ 24.47 Total return (f) (18.88)%(h) (30.57)%(h) 18.18% 27.55% 14.73% - --------------------------------------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENT DATA: Expenses (i) 1.34% 1.31% 1.28% 1.34% 1.34% Net investment income (loss)(i) (0.08)% (0.28)% (0.33)% (0.25)% 0.02% Waiver/reimbursement 0.07% 0.02% -- -- -- Portfolio turnover rate 43% 48% 54% 53% 60% Net assets, end of period (000's) $239,279 $ 346,214 $ 580,417 $ 443,639 $ 312,951 - ---------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Equity Growth Fund was renamed the Columbia Large Cap Growth Fund. (b) The Fund changed its fiscal year end from October 31 to September 30. (c) On November 18, 2002, the Galaxy Equity Growth Fund, Retail A shares were redesignated Liberty Equity Growth Fund, Class T shares. (d) Per share data was calculated using average shares outstanding during the period. (e) Rounds to less than $0.01 per share. (f) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (g) Not annualized. (h) Had the Investment Advisor and/or any of its affiliates not waived or reimbursed a portion of expenses, total return would have been reduced. (i) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (j) Annualized. (k) Rounds to less than 0.01%. 96 FINANCIAL HIGHLIGHTS____________________________________________________________ Columbia Large Cap Growth Fund SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED) SIX MONTHS PERIOD ENDED ENDED MARCH 31, SEPTEMBER 30, CLASS Z SHARES 2004 (a) 2003 (b)(c) - ------------------------------------------------------------------------------------ NET ASSET VALUE, BEGINNING OF PERIOD $ 17.84 $ 16.28 - ------------------------------------------------------------------------------------ INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) (0.02)(d) 0.05(d) Net realized and unrealized gain (loss) on investments 1.93 1.57 ----------- ------------- Total from investment operations 1.91 1.62 - ------------------------------------------------------------------------------------ LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income (0.01) (0.06) In excess of net investment income -- -- From net realized gains -- -- ----------- ------------- Total distributions declared to shareholders (0.01) (0.06) - ------------------------------------------------------------------------------------ NET ASSET VALUE, END OF PERIOD $ 19.74 $ 17.84 Total return (e) 10.71%(f)(g) 9.93%(f)(g) - ------------------------------------------------------------------------------------ RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (h) 1.03%(i) 0.99%(i) Net investment income (loss)(h) (0.17)%(i) 0.30%(i) Waiver/reimbursement --%(i)(j) 0.02%(i) Portfolio turnover rate 76%(f) 91%(f) Net assets, end of period (000's) $ 695,361 $ 670,649 - ------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31, ---------------------------------------------------------------------- CLASS Z SHARES 2002 2001 2000 1999 1998 - --------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 19.99 $ 32.61 $ 29.15 $ 24.52 $ 25.17 - --------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) 0.07(d) 0.02 0.01(d) 0.03 0.09 Net realized and unrealized gain (loss) on investments (3.78) (9.01) 5.18 6.50 3.20 -------- --------- ---------- ---------- ---------- Total from investment operations (3.71) (8.99) 5.19 6.53 3.29 - --------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHODERS: From net investment income -- -- (0.01) -- (0.09) In excess of net investment income -- -- -- -- (0.01) From net realized gains -- (3.63) (1.72) (1.90) (3.84) -------- --------- ---------- ---------- ---------- Total distributions declared to shareholders -- (3.63) (1.73) (1.90) (3.94) - --------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 16.28 $ 19.99 $ 32.61 $ 29.15 $ 24.52 Total return (e) (18.51)%(g) (30.29)%(g) 18.63% 28.07% 15.17% - --------------------------------------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (h) 0.91% 0.93% 0.91% 0.94% 0.96% Net investment income (loss)(h) 0.35% 0.10% 0.04% 0.15% 0.40% Waiver/reimbursement 0.05% 0.01% -- -- -- Portfolio turnover rate 43% 48% 54% 53% 60% Net assets, end of period (000's) $699,215 $ 845,887 $1,258,399 $1,041,378 $ 815,756 - ---------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Equity Growth Fund was renamed the Columbia Large Cap Growth Fund. (b) The Fund changed its fiscal year end from October 31 to September 30. (c) On November 18, 2002, the Galaxy Equity Growth Fund, Trust shares were redesignated Liberty Equity Growth Fund, Class Z shares. (d) Per share data was calculated using average shares outstanding during the period. (e) Total return at net asset value assuming all distributions reinvested. (f) Not annualized. (g) Had the Investment Advisor and/or any of its affiliates not waived or reimbursed a portion of expenses, total return would have been reduced. (h) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (i) Annualized. (j) Rounds to less than 0.01%. 97 FINANCIAL HIGHLIGHTS____________________________________________________________ Columbia Disciplined Value Fund SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED) SIX MONTHS ENDED PERIOD ENDED MARCH 31, SEPTEMBER 30, CLASS A SHARES 2004 (a) 2003 (b)(c) - ------------------------------------------------------------------------------ NET ASSET VALUE, BEGINNING OF PERIOD $ 11.02 $ 10.06 - ------------------------------------------------------------------------------ INCOME FROM INVESTMENT OPERATIONS: Net investment income (d) 0.07 0.04 Net realized and unrealized gain on investments 1.64 0.92 ----------- ------------- Total from investment operations 1.71 0.96 - ------------------------------------------------------------------------------ LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income (0.14) -- - ------------------------------------------------------------------------------ NET ASSET VALUE, END OF PERIOD $ 12.59 $ 11.02 Total return (e)(f) 15.62% 9.54% - ------------------------------------------------------------------------------ RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (g)(h) 1.31% 1.31% Net investment income (g)(h) 1.20% 0.49% Portfolio turnover rate (f) 46% 50% Net assets, end of period (000's) $ 1,820 $ 903 - ------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Equity Value Fund was renamed the Columbia Disciplined Value Fund. (b) The Fund changed its fiscal year end from October 31 to September 30. (c) Class A shares were initially offered on November 25, 2002. Per share data and total return reflect activity from that date. (d) Per share data was calculated using average shares outstanding during the period. (e) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (f) Not annualized. (g) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (h) Annualized. 98 FINANCIAL HIGHLIGHTS____________________________________________________________ Columbia Disciplined Value Fund SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED) SIX MONTHS ENDED PERIOD ENDED MARCH 31, SEPTEMBER 30, CLASS B SHARES 2004 (a) 2003 (b)(c) - ------------------------------------------------------------------------------ NET ASSET VALUE, BEGINNING OF PERIOD $ 10.49 $ 9.67 - ------------------------------------------------------------------------------ INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss)(d) 0.03 (0.02) Net realized and unrealized gain on investments 1.55 0.84 ----------- ------------- Total from investment operations 1.58 0.82 - ------------------------------------------------------------------------------ LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income (0.03) -- - ------------------------------------------------------------------------------ NET ASSET VALUE, END OF PERIOD $ 12.04 $ 10.49 Total return (e)(f) 15.11% 8.48% - ------------------------------------------------------------------------------ RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (g)(h) 2.06% 2.26% Net investment income (loss)(g)(h) 0.46% (0.27)% Portfolio turnover rate (f) 46% 50% Net assets, end of period (000's) $ 1,504 $ 338 - ------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Equity Value Fund was renamed the Columbia Disciplined Value Fund. (b) The Fund changed its fiscal year end from October 31 to September 30. (c) Class B shares were initially offered on November 25, 2002. Per share data and total return reflect activity from that date. (d) Per share data was calculated using average shares outstanding during the period. (e) Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge. (f) Not annualized. (g) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (h) Annualized. 99 FINANCIAL HIGHLIGHTS____________________________________________________________ Columbia Disciplined Value Fund SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED) SIX MONTHS ENDED PERIOD ENDED MARCH 31, SEPTEMBER 30, CLASS C SHARES 2004 (a) 2003 (b)(c) - ---------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 10.47 $ 9.67 - ---------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss)(d) 0.02 (0.05) Net realized and unrealized gain on investments 1.56 0.85 ----------- ------------- Total from investment operations 1.58 0.80 - ---------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income (0.03) -- - ---------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 12.02 $ 10.47 Total return (e)(f) 15.14% 8.27%(g) - ---------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (h)(i) 2.07% 2.49% Net investment income (loss)(h)(i) 0.40% (0.60)% Waiver/reimbursement -- 0.49%(i) Portfolio turnover rate (f) 46% 50% Net assets, end of period (000's) $ 255 $ 24 - ----------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Equity Value Fund was renamed the Columbia Disciplined Value Fund. (b) The Fund changed its fiscal year end from October 31 to September 30. (c) Class C shares were initially offered on November 25, 2002. Per share data and total return reflect activity from that date. (d) Per share data was calculated using average shares outstanding during the period. (e) Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge. (f) Not annualized. (g) Had the Investment Advisor or any of its affiliates not waived or reimbursed a portion of expenses, total return would have been reduced. (h) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (i) Annualized. 100 FINANCIAL HIGHLIGHTS____________________________________________________________ Columbia Disciplined Value Fund SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED) SIX MONTHS PERIOD ENDED ENDED MARCH 31, SEPTEMBER 30, CLASS G SHARES 2004 (a) 2003 (b)(c) - ------------------------------------------------------------------------------ NET ASSET VALUE, BEGINNING OF PERIOD $ 10.50 $ 9.21 - ------------------------------------------------------------------------------ INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) 0.03(d) (0.04)(d) Net realized and unrealized gain (loss) on investments 1.56 1.33 ----------- ------------ Total from investment operations 1.59 1.29 - ------------------------------------------------------------------------------ LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income (0.04) -- From net realized gains -- -- ----------- ------------ Total distributions declared to shareholders (0.04) -- - ------------------------------------------------------------------------------ NET ASSET VALUE, END OF PERIOD $ 12.05 $ 10.50 Total return (e) 15.11%(f) 14.01%(f) - ------------------------------------------------------------------------------ RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (h) 2.09%(i) 2.31%(i) Net investment income (loss)(h) 0.46%(i) (0.47)%(i) Waiver/reimbursement -- -- Portfolio turnover rate 46%(f) 50%(f) Net assets, end of period (000's) $ 9,686 $ 11,074 - ------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31, ---------------------------------------------------------------------- CLASS G SHARES 2002 2001 2000 1999 1998 - --------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 12.10 $ 16.73 $ 18.08 $ 16.44 $ 18.24 - --------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) (0.19) (0.10) (0.15) (0.15) (0.08) Net realized and unrealized gain (loss) on investments (2.35) (1.64) 1.25 2.40 1.48 -------- --------- ---------- ---------- ---------- Total from investment operations (2.54) (1.74) 1.10 2.25 1.40 - --------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income -- -- -- -- -- From net realized gains (0.35) (2.89) (2.45) (0.61) (3.20) -------- --------- ---------- ---------- ---------- Total distributions declared to shareholders (0.35) (2.89) (2.45) (0.61) (3.20) - --------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 9.21 $ 12.10 $ 16.73 $ 18.08 $ 16.44 Total return (e) (21.85)% (11.00)%(g) 7.12%(g) 13.81% 9.07% - --------------------------------------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (h) 2.18% 2.13% 2.09% 2.08% 2.06% Net investment income (loss)(h) (1.15)% (0.91)% (0.83)% (0.87)% (0.54)% Waiver/reimbursement -- 0.02% 0.03% -- -- Portfolio turnover rate 99% 127% 72% 75% 82% Net assets, end of period (000's) $ 16,791 $ 25,776 $ 30,555 $ 30,988 $ 23,103 - ---------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Equity Value Fund was renamed the Columbia Disciplined Value Fund. (b) The Fund changed its fiscal year end from October 31 to September 30. (c) On November 25, 2002, the Galaxy Equity Value Fund, Retail B shares were redesignated Liberty Equity Value, Class G shares. (d) Per share data was calculated using average shares outstanding during the period. (e) Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge. (f) Not annualized. (g) Had the Investment Advisor and/or any of its affiliates not waived or reimbursed a portion of expenses, total return would have been reduced. (h) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (i) Annualized. 101 FINANCIAL HIGHLIGHTS____________________________________________________________ Columbia Disciplined Value Fund SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED) SIX MONTHS PERIOD ENDED ENDED MARCH 31, SEPTEMBER 30, CLASS T SHARES 2004 (a) 2003 (b)(c) - ------------------------------------------------------------------------------ NET ASSET VALUE, BEGINNING OF PERIOD $ 11.00 $ 9.58 - ------------------------------------------------------------------------------ INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) 0.07(d) 0.03(d) Net realized and unrealized gain (loss) on investments 1.64 1.39 ----------- ------------ Total from investment operations 1.71 1.42 - ------------------------------------------------------------------------------ LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income (0.12) -- In excess of net investment income -- -- From net realized gains -- -- ----------- ------------ Total distributions declared to shareholders (0.12) -- - ------------------------------------------------------------------------------ NET ASSET VALUE, END OF PERIOD $ 12.59 $ 11.00 Total return (f) 15.57%(g) 14.82%(g) - ------------------------------------------------------------------------------ RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (i) 1.38%(j) 1.50%(j) Net investment income (loss)(i) 1.15%(j) 0.35%(j) Waiver/reimbursement -- -- Portfolio turnover rate 46%(g) 50%(g) Net assets, end of period (000's) $ 139,988 $ 127,993 - ------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31, ---------------------------------------------------------------------- CLASS T SHARES 2002 2001 2000 1999 1998 - --------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 12.48 $ 17.05 $ 18.28 $ 16.50 $ 18.21 - --------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) (0.05) (0.02) (0.02) (0.03) 0.03 Net realized and unrealized gain (loss) on investments (2.50) (1.66) 1.25 2.42 1.50 -------- --------- ---------- ---------- ---------- Total from investment operations (2.55) (1.68) 1.23 2.39 1.53 - --------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income -- -- (0.01) -- (0.04) In excess of net investment income -- -- --(e) -- -- From net realized gains (0.35) (2.89) (2.45) (0.61) (3.20) -------- --------- ---------- ---------- ---------- Total distributions declared to shareholders (0.35) (2.89) (2.46) (0.61) (3.24) - --------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 9.58 $ 12.48 $ 17.05 $ 18.28 $ 16.50 Total return (f) (21.31)% (10.27)%(h) 7.83% 14.63% 9.88% - --------------------------------------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (i) 1.41% 1.39% 1.36% 1.37% 1.37% Net investment income (loss)(i) (0.38)% (0.17)% (0.10)% (0.16)% 0.15% Waiver/reimbursement -- 0.01% -- -- -- Portfolio turnover rate 99% 127% 72% 75% 82% Net assets, end of period (000's) $123,085 $ 180,435 $ 226,836 $ 258,332 $ 234,730 - ---------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Equity Value Fund was renamed the Columbia Disciplined Value Fund. (b) The Fund changed its fiscal year end from October 31 to September 30. (c) On November 25, 2002, the Galaxy Equity Value Fund, Retail A shares were redesignated Liberty Equity Value, Class T shares. (d) Per share data was calculated using average shares outstanding during the period. (e) Rounds to less than $0.01 per share. (f) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (g) Not annualized. (h) Had the Investment Advisor and/or any of its affiliates not waived or reimbursed a portion of expenses, total return would have been reduced. (i) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (j) Annualized. 102 FINANCIAL HIGHLIGHTS____________________________________________________________ Columbia Disciplined Value Fund SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED) SIX MONTHS PERIOD ENDED ENDED MARCH 31, SEPTEMBER 30, CLASS Z SHARES 2004 (a) 2003 (b)(c) - ------------------------------------------------------------------------------ NET ASSET VALUE, BEGINNING OF PERIOD $ 11.24 $ 9.75 - ------------------------------------------------------------------------------ INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) 0.09(d) 0.08(d) Net realized and unrealized gain (loss) on investments 1.67 1.41 ----------- ------------ Total from investment operations 1.76 1.49 - ------------------------------------------------------------------------------ LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income (0.18) -- In excess of net investment income -- -- From net realized gains -- -- ----------- ------------ Total distributions declared to shareholders (0.18) -- - ------------------------------------------------------------------------------ NET ASSET VALUE, END OF PERIOD $ 12.82 $ 11.24 Total return (f) 15.75%(g) 15.28%(g) - ------------------------------------------------------------------------------ RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (i) 1.06%(j) 1.04%(j) Net investment income (i) 1.48%(j) 0.82%(j) Waiver/reimbursement -- -- Portfolio turnover rate 46%(g) 50%(g) Net assets, end of period (000's) $ 274,324 $ 224,137 - ------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31, ---------------------------------------------------------------------- CLASS Z SHARES 2002 2001 2000 1999 1998 - --------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 12.65 $ 17.17 $ 18.35 $ 16.51 $ 18.21 - --------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) (0.02) 0.02 0.04 0.03 0.08 Net realized and unrealized gain (loss) on investments (2.53) (1.65) 1.25 2.42 1.49 -------- --------- ---------- ---------- ---------- Total from investment operations (2.55) (1.63) 1.29 2.45 1.57 - --------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income -- -- (0.02) -- (0.07) In excess of net investment income -- -- --(e) -- -- From net realized gains (0.35) (2.89) (2.45) (0.61) (3.20) -------- --------- ---------- ---------- ---------- Total distributions declared to shareholders (0.35) (2.89) (2.47) (0.61) (3.27) - --------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 9.75 $ 12.65 $ 17.17 $ 18.35 $ 16.51 Total return (f) (20.96)% (9.91)% 8.22% 15.04%(h) 10.27% - --------------------------------------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (i) 0.98% 1.00% 1.00% 1.02% 1.03% Net investment income (i) 0.05% 0.22% 0.26% 0.19% 0.49% Waiver/reimbursement -- -- -- 0.01% -- Portfolio turnover rate 99% 127% 72% 75% 82% Net assets, end of period (000's) $167,867 $ 152,002 $ 164,864 $ 281,064 $ 254,432 - ---------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Equity Value Fund was renamed the Columbia Disciplined Value Fund. (b) The Fund changed its fiscal year end from October 31 to September 30. (c) On November 25, 2002, the Galaxy Equity Value Fund, Trust shares were redesignated Liberty Equity Value, Class Z shares. (d) Per share data was calculated using average shares outstanding during the period. (e) Rounds to less than $0.01 per share. (f) Total return at net asset value assuming all distributions reinvested. (g) Not annualized. (h) Had the Investment Advisor and/or any of its affiliates not waived or reimbursed a portion of expenses, total return would have been reduced. (i) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (j) Annualized. 103 FINANCIAL HIGHLIGHTS____________________________________________________________ Columbia International Equity Fund SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED) SIX MONTHS PERIOD ENDED ENDED MARCH 31, SEPTEMBER 30, CLASS A SHARES 2004 (a) 2003 (b)(c) - --------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 10.83 $ 9.28 - --------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) 0.03(e) 0.06(e) Net realized and unrealized gain (loss) on investments 2.08 1.53 ----------- ------------- Total from investment operations 2.11 1.59 - --------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income (0.05) (0.04) From net realized gains -- -- ----------- ------------- Total distributions declared to shareholders (0.05) (0.04) - --------------------------------------------------------------------------------- REDEMPTION FEES: Redemption fees added to paid-in capital --(e)(f) -- - --------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 12.89 $ 10.83 Total return (g)(h) 19.51%(i) 17.23%(i) - --------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (j) 1.25%(k) 1.38%(k) Net investment income (loss)(j) 0.47%(k) 0.69%(k) Waiver/reimbursement 0.26%(k) 0.25%(k) Portfolio turnover rate 46%(i) 66%(i) Net assets, end of period (000's) $ 743 $ 268 - ---------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31, ------------------------------------------------------- CLASS A SHARES 2002 2001 2000 1999 (d) - ------------------------------------------------------------------------------------------------------ NET ASSET VALUE, BEGINNING OF PERIOD $ 11.19 $ 19.53 $ 20.98 $ 16.85 - ------------------------------------------------------------------------------------------------------ INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) (0.01)(e) (0.02) 0.46(e) 0.06(e) Net realized and unrealized gain (loss) on investments (1.72) (5.73) (0.60) 4.79 -------- --------- ---------- ---------- Total from investment operations (1.73) (5.75) (0.14) 4.85 - ------------------------------------------------------------------------------------------------------ LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income (0.18) (0.31) (0.12) (0.15) From net realized gains -- (2.28) (1.19) (0.57) -------- --------- ---------- ---------- Total distributions declared to shareholders (0.18) (2.59) (1.31) (0.72) - ------------------------------------------------------------------------------------------------------ REDEMPTION FEES: Redemption fees added to paid-in capital -- -- -- -- - ------------------------------------------------------------------------------------------------------ NET ASSET VALUE, END OF PERIOD $ 9.28 $ 11.19 $ 19.53 $ 20.98 Total return (g)(h) (15.78)% (33.38)% (1.34)% 29.73% - ------------------------------------------------------------------------------------------------------ RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (j) 1.63% 1.44% 1.10% 1.17% Net investment income (loss)(j) (0.11)% 0.01% 2.06% 0.34% Waiver/reimbursement 0.56% 0.33% 0.89% 0.86% Portfolio turnover rate 110% 60% 50% 45% Net assets, end of period (000's) $ 8 $ 9 $ 14 $ 12 - ------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty International Equity Fund was renamed the Columbia International Equity Fund. (b) The Fund changed its fiscal year end from October 31 to September 30. (c) On November 18, 2002, the Galaxy International Equity Fund, Prime A shares were redesignated Liberty International Equity Fund, Class A shares. (d) The Fund began offering Prime A shares on November 1, 1998. (e) Per share data was calculated using average shares outstanding during the period. (f) Rounds to less than $0.01 per share. (g) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (h) Had the Investment Advisor and/or any of its affiliates not waived or reimbursed a portion of expenses, total return would have been reduced. (i) Not annualized. (j) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (k) Annualized. 104 FINANCIAL HIGHLIGHTS____________________________________________________________ Columbia International Equity Fund SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED) SIX MONTHS PERIOD ENDED ENDED MARCH 31, SEPTEMBER 30, CLASS B SHARES 2004 (a) 2003 (b)(c) - --------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 10.75 $ 9.22 - --------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) (0.02)(e) (0.03)(e) Net realized and unrealized gain (loss) on investments 2.07 1.57 ----------- ------------- Total from investment operations 2.05 1.54 - --------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income -- (0.01) From net realized gains -- -- ----------- ------------- Total distributions declared to shareholders -- (0.01) - --------------------------------------------------------------------------------- REDEMPTION FEES: Redemption fees added to paid-in capital --(e)(f) -- - --------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 12.80 $ 10.75 Total return (g)(h) 19.07%(i) 16.71%(i) - --------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (j) 1.94%(k) 2.37%(k) Net investment income (loss)(j) (0.26)%(k) (0.37)%(k) Waiver/reimbursement 0.26%(k) 0.25%(k) Portfolio turnover rate 46%(i) 66%(i) Net assets, end of period (000's) $ 739 $ 250 ----------- -------------
YEAR ENDED OCTOBER 31, ------------------------------------------------------- CLASS B SHARES 2002 2001 2000 1999 (d) - ------------------------------------------------------------------------------------------------------ NET ASSET VALUE, BEGINNING OF PERIOD $ 11.11 $ 19.37 $ 20.85 $ 16.85 - ------------------------------------------------------------------------------------------------------ INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) (0.05)(e) (0.08) 0.29(e) (0.08)(e) Net realized and unrealized gain (loss) on investments (1.71) (5.71) (0.58) 4.78 -------- --------- ---------- ---------- Total from investment operations (1.76) (5.79) (0.29) 4.70 - ------------------------------------------------------------------------------------------------------ LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income (0.13) (0.19) -- (0.13) From net realized gains -- (2.28) (1.19) (0.57) -------- --------- ---------- ---------- Total distributions declared to shareholders (0.13) (2.47) (1.19) (0.70) - ------------------------------------------------------------------------------------------------------ REDEMPTION FEES: Redemption fees added to paid-in capital -- -- -- -- - ------------------------------------------------------------------------------------------------------ NET ASSET VALUE, END OF PERIOD $ 9.22 $ 11.11 $ 19.37 $ 20.85 Total return (g)(h) (16.06)% (33.72)% (2.02)% 28.74% - ------------------------------------------------------------------------------------------------------ RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (j) 1.97% 1.91% 1.83% 1.89% Net investment income (loss)(j) (0.45)% (0.46)% 1.33% (0.38)% Waiver/reimbursement 0.25% 0.28% 0.34% 0.38% Portfolio turnover rate 110% 60% 50% 45% Net assets, end of period (000's) $ 54 $ 280 $ 483 $ 458 - ------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty International Equity Fund was renamed the Columbia International Equity Fund. (b) The Fund changed its fiscal year end from October 31 to September 30. (c) On November 18, 2002, the Galaxy International Equity Fund, Prime B shares were redesignated Liberty International Equity Fund, Class B shares. (d) The Fund began offering Prime B shares on November 1, 1998. (e) Per share data was calculated using average shares outstanding during the period. (f) Rounds to less than $0.01 per share. (g) Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge. (h) Had the Investment Advisor and/or any of its affiliates not waived or reimbursed a portion of expenses, total return would have been reduced. (i) Not annualized. (j) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (k) Annualized. 105 FINANCIAL HIGHLIGHTS____________________________________________________________ Columbia International Equity Fund SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED) SIX MONTHS ENDED PERIOD ENDED MARCH 31, SEPTEMBER 30, ----------- ------------- CLASS C SHARES 2004 (a) 2003 (b)(c) - --------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 10.71 $ 9.33 - --------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss)(d) (0.04) 0.04 Net realized and unrealized gain on investments 2.06 1.35 ----------- ------------- Total from investment operations 2.02 1.39 - --------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income -- (0.01) - --------------------------------------------------------------------------------- REDEMPTION FEES: Redemption fees added to paid-in capital --(d)(e) -- - --------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 12.73 $ 10.71 Total return (f)(g)(h) 18.86% 14.90% - --------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (i)(j) 2.02% 2.07% Net investment income (loss)(i)(j) (0.59)% 0.44% Waiver/reimbursement (j) 0.26% 1.68% Portfolio turnover rate (h) 46% 66% Net assets, end of period (000's) $ 96 $ 6 - ---------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty International Equity Fund was renamed the Columbia International Equity Fund. (b) The Fund changed its fiscal year end from October 31 to September 30. (c) Class C shares were initially offered on November 18, 2002. Per share data and total return reflect activity from that date. (d) Per share data was calculated using average shares outstanding during the period. (e) Rounds to less than $0.01 per share. (f) Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge. (g) Had the Investment Advisor and/or any of its affiliates not waived or reimbursed a portion of expenses, total return would have been reduced. (h) Not annualized. (i) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (j) Annualized. 106 FINANCIAL HIGHLIGHTS____________________________________________________________ Columbia International Equity Fund SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED) SIX MONTHS PERIOD ENDED ENDED MARCH 31, SEPTEMBER 30, CLASS G SHARES 2004 (a) 2003 (b)(c) - --------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 10.67 $ 9.16 - --------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) (0.03)(e) (0.03)(e) Net realized and unrealized gain (loss) on investments 2.06 1.54 ----------- ------------- Total from investment operations 2.03 1.51 - --------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income -- -- From net realized gains -- -- ----------- ------------- Total distributions declared to shareholders -- -- - --------------------------------------------------------------------------------- REDEMPTION FEES: Redemption fees added to paid-in capital --(e)(f) -- - --------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 12.70 $ 10.67 Total return (g)(h) 19.03%(i) 16.48%(i) - --------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (j) 2.01%(k) 2.41%(k) Net investment income (loss)(j) (0.54)%(k) (0.31)%(k) Waiver/reimbursement 0.38%(k) 0.49%(k) Portfolio turnover rate 46%(i) 66%(i) Net assets, end of period (000's) $ 5,557 $ 4,976 - ---------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31, ------------------------------------------------------- CLASS G SHARES 2002 2001 2000 1999 (d) - ------------------------------------------------------------------------------------------------------ NET ASSET VALUE, BEGINNING OF PERIOD $ 11.04 $ 19.28 $ 20.80 $ 16.85 - ------------------------------------------------------------------------------------------------------ INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) (0.10)(e) (0.10) 0.22(e) (0.09)(e) Net realized and unrealized gain (loss) on investments (1.70) (5.72) (0.55) 4.74 -------- --------- ---------- ---------- Total from investment operations (1.80) (5.82) (0.33) 4.65 - ------------------------------------------------------------------------------------------------------ LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income (0.08) (0.14) -- (0.13) From net realized gains -- (2.28) (1.19) (0.57) -------- --------- ---------- ---------- Total distributions declared to shareholders (0.08) (2.42) (1.19) (0.70) - ------------------------------------------------------------------------------------------------------ REDEMPTION FEES: Redemption fees added to paid-in capital -- -- -- -- - ------------------------------------------------------------------------------------------------------ NET ASSET VALUE, END OF PERIOD $ 9.16 $ 11.04 $ 19.28 $ 20.80 Total return (g)(h) (16.55)% (33.95)% (2.22)% 28.41% - ------------------------------------------------------------------------------------------------------ RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (j) 2.46% 2.34% 2.14% 1.96% Net investment income (loss)(j) (0.94)% (0.89)% 1.02% (0.45)% Waiver/reimbursement 0.51% 0.32% 0.50% 0.74% Portfolio turnover rate 110% 60% 50% 45% Net assets, end of period (000's) $ 4,913 $ 6,988 $ 8,297 $ 2,189 - ------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty International Equity Fund was renamed the Columbia International Equity Fund. (b) The Fund changed its fiscal year end from October 31 to September 30. (c) On November 18, 2002, the Galaxy International Equity Fund, Retail B shares were redesignated Liberty International Equity Fund, Class G shares. (d) The Fund began issuing Class G shares on November 1, 1998. (e) Per share data was calculated using average shares outstanding during the period. (f) Rounds to less than $0.01 per share. (g) Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge. (h) Had the Investment Advisor and/or any of its affiliates not waived or reimbursed a portion of expenses, total return would have been reduced. (i) Not annualized. (j) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (k) Annualized. 107 FINANCIAL HIGHLIGHTS____________________________________________________________ Columbia International Equity Fund SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED) SIX MONTHS PERIOD ENDED ENDED MARCH 31, SEPTEMBER 30, CLASS T SHARES 2004 (a) 2003 (b)(c) - --------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 10.78 $ 9.24 - --------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.01(d) 0.05(d) Net realized and unrealized gain (loss) on investments 2.08 1.55 ----------- ------------- Total from investment operations 2.09 1.60 - --------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income (0.01) (0.06) From net realized gains -- -- ----------- ------------- Total distributions declared to shareholders (0.01) (0.06) - --------------------------------------------------------------------------------- REDEMPTION FEES: Redemption fees added to paid-in capital --(d)(e) -- - --------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 12.86 $ 10.78 Total return (f)(g) 19.38%(h) 17.45%(h) - --------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (i) 1.30%(j) 1.55%(j) Net investment income (i) 0.17%(j) 0.54%(j) Waiver/reimbursement 0.31%(j) 0.36%(j) Portfolio turnover rate 46%(h) 66%(h) Net assets, end of period (000's) $ 46,484 $ 42,195 - ---------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31, ---------------------------------------------------------------------- CLASS T SHARES 2002 2001 2000 1999 1998 - --------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 11.16 $ 19.44 $ 20.86 $ 16.75 $ 15.18 - --------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.01(d) 0.03 0.41(d) 0.01(d) 0.07 Net realized and unrealized gain (loss) on investments (1.73) (5.75) (0.59) 4.72 1.93 -------- --------- ---------- ---------- ---------- Total from investment operations (1.72) (5.72) (0.18) 4.73 2.00 - --------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income (0.20) (0.28) (0.05) (0.05) (0.07) From net realized gains -- (2.28) (1.19) (0.57) (0.36) -------- --------- ---------- ---------- ---------- Total distributions declared to shareholders (0.20) (2.56) (1.24) (0.62) (0.43) - --------------------------------------------------------------------------------------------------------------------- REDEMPTION FEES: Redemption fees added to paid-in capital -- -- -- -- -- - --------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 9.24 $ 11.16 $ 19.44 $ 20.86 $ 16.75 Total return (f)(g) (15.75)% (33.35)% (1.49)% 29.04% 13.64% - --------------------------------------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (i) 1.42% 1.34% 1.32% 1.48% 1.48% Net investment income (i) 0.10% 0.11% 1.83% 0.03% 0.39% Waiver/reimbursement 0.37% 0.30% 0.25% 0.25% 0.25% Portfolio turnover rate 110% 60% 50% 45% 49% Net assets, end of period (000's) $ 43,095 $ 65,749 $ 120,351 $ 89,327 $ 66,541 - ---------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty International Equity Fund was renamed the Columbia International Equity Fund. (b) The Fund changed its fiscal year end from October 31 to September 30. (c) On November 18, 2002, the Galaxy International Equity Fund, Retail A shares were redesignated Liberty International Equity Fund, Class T shares. (d) Per share data was calculated using average shares outstanding during the period. (e) Rounds to less than $0.01 per share. (f) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (g) Had the Investment Advisor and/or any of its affiliates not waived or reimbursed a portion of expenses, total return would have been reduced. (h) Not annualized. (i) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (j) Annualized. 108 FINANCIAL HIGHLIGHTS____________________________________________________________ Columbia International Equity Fund SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED) SIX MONTHS PERIOD ENDED ENDED MARCH 31, SEPTEMBER 30, CLASS Z SHARES 2004 (a) 2003 (b)(c) - --------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 11.01 $ 9.43 - --------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.04(d) 0.10(d) Net realized and unrealized gain (loss) on investments 2.13 1.59 ----------- ------------- Total from investment operations 2.17 1.69 - --------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income (0.09) (0.11) From net realized gains -- -- ----------- ------------- Total distributions declared to shareholders (0.09) (0.11) - --------------------------------------------------------------------------------- REDEMPTION FEES: Redemption fees added to paid-in capital --(d)(e) -- - --------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 13.09 $ 11.01 Total return (f)(g) 19.75%(h) 18.08%(h) - --------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (i) 0.88%(j) 0.97%(j) Net investment income (i) 0.62%(j) 1.11%(j) Waiver/reimbursement 0.26%(j) 0.25%(j) Portfolio turnover rate 46%(h) 66%(h) Net assets, end of period (000's) $ 448,858 $ 346,889 - ---------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31, ---------------------------------------------------------------------- CLASS Z SHARES 2002 2001 2000 1999 1998 - --------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 11.36 $ 19.74 $ 21.18 $ 17.00 $ 15.33 - --------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.06(d) 0.07 0.51(d) 0.10(d) 0.14 Net realized and unrealized gain (loss) on investments (1.74) (5.82) (0.60) 4.80 1.98 -------- --------- ---------- ---------- ---------- Total from investment operations (1.68) (5.75) (0.09) 4.90 2.12 - --------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income (0.25) (0.35) (0.16) (0.15) (0.09) From net realized gains -- (2.28) (1.19) (0.57) (0.36) -------- --------- ---------- ---------- ---------- Total distributions declared to shareholders (0.25) (2.63) (1.35) (0.72) (0.45) - --------------------------------------------------------------------------------------------------------------------- REDEMPTION FEES: Redemption fees added to paid-in capital -- -- -- -- -- - --------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 9.43 $ 11.36 $ 19.74 $ 21.18 $ 17.00 Total return (f)(g) (15.26)% (33.00)% (1.08)% 29.71% 14.32% - --------------------------------------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (i) 0.94% 0.90% 0.87% 0.97% 0.96% Net investment income (i) 0.58% 0.55% 2.28% 0.54% 0.91% Waiver/reimbursement 0.27% 0.26% 0.25% 0.25% 0.25% Portfolio turnover rate 110% 60% 50% 45% 49% Net assets, end of period (000's) $374,119 $ 524,704 $ 912,555 $ 501,776 $ 345,692 - ---------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty International Equity Fund was renamed the Columbia International Equity Fund. (b) The Fund changed its fiscal year end from October 31 to September 30. (c) On November 18, 2002, the Galaxy International Equity Fund, Trust shares were redesignated Liberty International Equity Fund, Class Z shares. (d) Per share data was calculated using average shares outstanding during the period. (e) Rounds to less than $0.01 per share. (f) Total return at net asset value assuming all distributions reinvested. (g) Had the Investment Advisor and/or any of its affiliates not waived or reimbursed a portion of expenses, total return would have been reduced. (h) Not annualized. (i) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (j) Annualized. 109 FINANCIAL HIGHLIGHTS____________________________________________________________ Columbia Large Cap Core Fund SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED) SIX MONTHS PERIOD ENDED ENDED MARCH 31, SEPTEMBER 30, CLASS A SHARES 2004 (a) 2003 (b)(c) - --------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 11.22 $ 10.08 - --------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) (0.01)(e) 0.03(e) Net realized and unrealized gain (loss) on investments 1.23 1.16 ----------- ------------- Total from investment operations 1.22 1.19 - --------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income (0.01) (0.05) In excess of net investment income -- -- From net realized gains -- -- ----------- ------------- Total distributions declared to shareholders (0.01) (0.05) - --------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 12.43 $ 11.22 Total return (g) 10.83%(h)(i) 11.82%(h) - --------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (j) 1.38%(k) 1.48%(k) Net investment income (loss)(j) (0.12)%(k) 0.37%(k) Waiver/reimbursement --%(k)(l) -- Portfolio turnover rate 62%(h) 55%(h) Net assets, end of period (000's) $ 10,044 $ 7,570 - ---------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31, ------------------------------------------------------- CLASS A SHARES 2002 2001 2000 1999 (d) - ------------------------------------------------------------------------------------------------------ NET ASSET VALUE, BEGINNING OF PERIOD $ 12.74 $ 16.41 $ 16.00 $ 14.88 - ------------------------------------------------------------------------------------------------------ INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) 0.03(e) 0.02 0.04 0.11(e) Net realized and unrealized gain (loss) on investments (2.23) (2.38) 1.34 2.03 -------- --------- ---------- ---------- Total from investment operations (2.20) (2.36) 1.38 2.14 - ------------------------------------------------------------------------------------------------------ LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income (0.02) (0.03) (0.06) (0.11) In excess of net investment income -- --(f) -- -- From net realized gains (0.44) (1.28) (0.91) (0.91) -------- --------- ---------- ---------- Total distributions declared to shareholders (0.46) (1.31) (0.97) (1.02) - ------------------------------------------------------------------------------------------------------ NET ASSET VALUE, END OF PERIOD $ 10.08 $ 12.74 $ 16.41 $ 16.00 Total return (g) (18.14)%(i) (15.34)%(i) 9.27%(i) 14.81%(i) - ------------------------------------------------------------------------------------------------------ RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (j) 1.28% 1.19% 1.14% 1.15% Net investment income (loss)(j) 0.25% 0.22% 0.30% 0.66% Waiver/reimbursement 0.24% 0.03% 0.10% 0.15% Portfolio turnover rate 13% 19% 42% 20% Net assets, end of period (000's) $ 15 $ 60 $ 156 $ 150 - ------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Large Cap Core Fund was renamed the Columbia Large Cap Core Fund. (b) The Fund changed its fiscal year end from October 31 to September 30. (c) On December 9, 2002, the Galaxy Growth & Income Fund, Prime A shares were redesignated Liberty Large Cap Core Fund, Class A shares. (d) The Fund began offering Prime A shares on November 1, 1998. (e) Per share data was calculated using average shares outstanding during the period. (f) Rounds to less than $0.01 per share. (g) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (h) Not annualized. (i) Had the Investment Advisor and/or any of its affiliates not waived or reimbursed a portion of expenses, total return would have been reduced. (j) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (k) Annualized. (l) Rounds to less than 0.01%. 110 FINANCIAL HIGHLIGHTS____________________________________________________________ Columbia Large Cap Core Fund SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED) SIX MONTHS PERIOD ENDED ENDED MARCH 31, SEPTEMBER 30, CLASS B SHARES 2004 (a) 2003 (b)(c) - ------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 10.99 $ 9.90 - ------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (0.05)(e) (0.04)(e) Net realized and unrealized gain (loss) on investments 1.20 1.14 ---------- ------------- Total from investment operations 1.15 1.10 - ------------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income -- (0.01) From net realized gains -- -- ---------- ------------- Total distributions declared to shareholders -- (0.01) - ------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 12.14 $ 10.99 Total return (f) 10.46%(g)(h) 11.12%(g) - ------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (i) 2.10%(j) 2.19%(j) Net investment loss (i) (0.85)%(j) (0.38)%(j) Waiver/reimbursement --%(j)(k) -- Portfolio turnover rate 62%(g) 55%(g) Net assets, end of period (000's) $ 3,633 $ 1,755 - -------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31, --------------------------------------------------------------- CLASS B SHARES 2002 2001 2000 1999 (d) - ------------------------------------------------------------------------------------------------------------------ NET ASSET VALUE, BEGINNING OF PERIOD $ 12.59 $ 16.32 $ 15.97 $ 14.88 - ------------------------------------------------------------------------------------------------------------------ INCOME FROM INVESTMENT OPERATIONS: Net investment loss (0.06)(e) (0.07) (0.07) (0.01)(e) Net realized and unrealized gain (loss) on investments (2.19) (2.38) 1.33 2.03 ---------- ---------- ------------ ------------- Total from investment operations (2.25) (2.45) 1.26 2.02 - ------------------------------------------------------------------------------------------------------------------ LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income -- -- -- (0.02) From net realized gains (0.44) (1.28) (0.91) (0.91) ---------- ---------- ------------ ------------- Total distributions declared to shareholders (0.44) (1.28) (0.91) (0.93) - ------------------------------------------------------------------------------------------------------------------ NET ASSET VALUE, END OF PERIOD $ 9.90 $ 12.59 $ 16.32 $ 15.97 Total return (f) (18.75)%(h) (15.95)%(h) 8.38%(h) 13.98%(h) - ------------------------------------------------------------------------------------------------------------------ RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (i) 2.02% 1.96% 1.89% 1.90% Net investment loss (i) (0.49)% (0.55)% (0.45)% (0.09)% Waiver/reimbursement 0.02% 0.04% 0.18% 0.27% Portfolio turnover rate 13% 19% 42% 20% Net assets, end of period (000's) $ 55 $ 109 $ 129 $ 129 - ------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Large Cap Core Fund was renamed the Columbia Large Cap Core Fund. (b) The Fund changed its fiscal year end from October 31 to September 30. (c) On December 9, 2002, the Galaxy Growth & Income Fund, Prime B shares were redesignated Liberty Large Cap Core Fund, Class B shares. (d) The Fund began offering Prime B shares on November 1, 1998. (e) Per share data was calculated using average shares outstanding during the period. (f) Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge. (g) Not annualized. (h) Had the Investment Advisor and/or any of its affiliates not waived or reimbursed a portion of expenses, total return would have been reduced. (i) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (j) Annualized. (k) Rounds to less than 0.01%. 111 FINANCIAL HIGHLIGHTS____________________________________________________________ Columbia Large Cap Core Fund SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED) SIX MONTHS ENDED PERIOD ENDED MARCH 31, SEPTEMBER 30, CLASS C SHARES 2004 (a) 2003 (b)(c) - ------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 10.99 $ 10.21 - ------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (d) (0.05) (0.04) Net realized and unrealized gain on investments 1.20 0.83 ---------- ------------- Total from investment operations 1.15 0.79 - ------------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income -- (0.01) - ------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 12.14 $ 10.99 Total return (e)(f) 10.46%(g) 7.74% - ------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (h)(i) 2.10% 2.18% Net investment loss (h)(i) (0.80)% (0.42)% Waiver/reimbursement --%(i)(j) -- Portfolio turnover rate (f) 62% 55% Net assets, end of period (000's) $ 392 $ 223 - -------------------------------------------------------------------------------------
(a On October 13, 2003, the Liberty Large Cap Core Fund was renamed the Columbia Large Cap Core Fund. (b) The Fund changed its fiscal year end from October 31 to September 30. (c) Class C shares were initially offered on December 9, 2002. Per share data and total return reflect activity from that date. (d) Per share data was calculated using average shares outstanding during the period. (e) Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge. (f) Not annualized. (g) Had the Investment Advisor and/or any of its affiliates not waived or reimbursed a portion of expenses, total return would have been reduced. (h) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (i) Annualized. (j) Rounds to less than 0.01%. 112 FINANCIAL HIGHLIGHTS____________________________________________________________ Columbia Large Cap Core Fund SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED) SIX MONTHS ENDED ENDED PERIOD MARCH 31, SEPTEMBER 30, CLASS G SHARES 2004 (a) 2003 (b)(c) - -------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 10.89 $ 9.82 - -------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) (0.05)(d) (0.02)(d) Net realized and unrealized gain (loss) on investments 1.19 1.10 ---------- ------------- Total from investment operations 1.14 1.08 - -------------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: In excess of net investment income -- (0.01) From net realized gains -- -- ---------- ------------- Total distributions declared to shareholders -- (0.01) - -------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 12.03 $ 10.89 Total return (f) 10.47%(g)(h) 11.00%(g)(h) - -------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (i) 2.14%(j) 2.19%(j) Net investment income (loss)(i) (0.87)%(j) (0.28)%(j) Waiver/reimbursement 0.03%(j) 0.05%(j) Portfolio turnover rate 62%(g) 55%(g) Net assets, end of period (000's) $ 24,545 $ 28,917 --------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31, ---------------------------------------------------------------------------- CLASS G SHARES 2002 2001 2000 1999 1998 - ------------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 12.50 $ 16.23 $ 15.90 $ 14.83 $ 16.23 - ------------------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) (0.06)(d) (0.09) (0.10) (0.04)(d) --(e) Net realized and unrealized gain (loss) on investments (2.18) (2.36) 1.34 2.02 1.31 ---------- --------- ------------ ---------- ---------- Total from investment operations (2.24) (2.45) 1.24 1.98 1.31 - ------------------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: In excess of net investment income -- -- -- -- (0.03) From net realized gains (0.44) (1.28) (0.91) (0.91) (2.68) ---------- --------- ------------ ---------- ---------- Total distributions declared to shareholders (0.44) (1.28) (0.91) (0.91) (2.71) - ------------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 9.82 $ 12.50 $ 16.23 $ 15.90 $ 14.83 Total return (f) (18.80)%(h) (16.11)% 8.35% 13.72%(h) 9.09% - ------------------------------------------------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (i) 2.08% 2.05% 2.04% 2.03% 2.02% Net investment income (loss)(i) (0.55)% (0.64)% (0.60)% (0.22)% 0.01% Waiver/reimbursement 0.02% -- -- 0.01% -- Portfolio turnover rate 13% 19% 42% 20% 38% Net assets, end of period (000's) $ 31,407 $ 48,512 $ 61,857 $ 62,366 $ 53,216 - -------------------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Large Cap Core Fund was renamed the Columbia Large Cap Core Fund. (b) The Fund changed its fiscal year end from October 31 to September 30. (c) On December 9, 2002, the Galaxy Growth & Income Fund, Retail B shares were redesignated Liberty Large Cap Core Fund, Class G shares. (d) Per share data was calculated using average shares outstanding during the period. (e) Rounds to less than $0.01 per share. (f) Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge. (g) Not annualized. (h) Had the Investment Advisor and/or any of its affiliates not waived or reimbursed a portion of expenses, total return would have been reduced. (i) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (j) Annualized. 113 FINANCIAL HIGHLIGHTS____________________________________________________________ Columbia Large Cap Core Fund SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED) SIX MONTHS PERIOD ENDED ENDED MARCH 31, SEPTEMBER 30, CLASS T SHARES 2004 (a) 2003 (b)(c) - ------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 11.18 $ 10.05 - ------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) (0.01)(d) 0.04(d) Net realized and unrealized gain (loss) on investments 1.22 1.14 ----------- ------------- Total from investment operations 1.21 1.18 - ------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income --(e) (0.05) In excess of net investment income -- -- From net realized gains -- -- ----------- ------------- Total distributions declared to shareholders -- (0.05) - ------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 12.39 $ 11.18 Total return (f) 10.85%(g)(h) 11.76%(g) - ------------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (i) 1.44%(j) 1.46%(j) Net investment income (loss)(i) (0.17)%(j) 0.45%(j) Waiver/reimbursement --%(j)(k) -- Portfolio turnover rate 62%(g) 55%(g) Net assets, end of period (000's) $ 195,825 $ 185,938 - -------------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31, -------------------------------------------------------------------------- CLASS T SHARES 2002 2001 2000 1999 1998 - -------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 12.70 $ 16.37 $ 15.98 $ 14.87 $ 16.24 - -------------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) 0.02(d) 0.02 0.02 0.08(d) 0.12 Net realized and unrealized gain (loss) on investments (2.22) (2.39) 1.33 2.02 1.32 --------- --------- ---------- ---------- ---------- Total from investment operations (2.20) (2.37) 1.35 2.10 1.44 - -------------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income (0.01) (0.02) (0.05) (0.08) (0.13) In excess of net investment income -- --(e) --(e) -- -- From net realized gains (0.44) (1.28) (0.91) (0.91) (2.68) --------- --------- ---------- ---------- ---------- Total distributions declared to shareholders (0.45) (1.30) (0.96) (0.99) (2.81) - -------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 10.05 $ 12.70 $ 16.37 $ 15.98 $ 14.87 Total return (f) (18.16)%(h) (15.46)%(h) 9.06%(h) 14.56%(h) 9.93%(h) - -------------------------------------------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (i) 1.35% 1.34% 1.28% 1.28% 1.28% Net investment income (loss)(i) 0.18% 0.07% 0.16% 0.53% 0.75% Waiver/reimbursement 0.01% 0.02% 0.09% 0.10% 0.07% Portfolio turnover rate 13% 19% 42% 20% 38% Net assets, end of period (000's) $ 180,269 $ 259,884 $ 217,423 $ 232,110 $ 214,110 - --------------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Large Cap Core Fund was renamed the Columbia Large Cap Core Fund. (b) The Fund changed its fiscal year end from October 31 to September 30. (c) On December 9, 2002, the Galaxy Growth & Income Fund, Retail A shares were redesignated Liberty Large Cap Core Fund, Class T shares. (d) Per share data was calculated using average shares outstanding during the period. (e) Rounds to less than $0.01 per share. (f) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (g) Not annualized. (h) Had the Investment Advisor and/or any of its affiliates not waived or reimbursed a portion of expenses, total return would have been reduced. (i) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (j) Annualized. (k) Rounds to less than 0.01%. 114 FINANCIAL HIGHLIGHTS____________________________________________________________ Columbia Large Cap Core Fund SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED) SIX MONTHS PERIOD ENDED ENDED MARCH 31, SEPTEMBER 30, CLASS Z SHARES 2004 (a) 2003 (b)(c) NET ASSET VALUE, BEGINNING OF PERIOD $ 11.25 $ 10.11 - ---------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.01(d) 0.08(d) Net realized and unrealized gain (loss) on investments 1.23 1.15 ---------- ---------- Total from investment operations 1.24 1.23 - ---------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income (0.02) (0.09) In excess of net investment income -- -- From net realized gains -- -- ---------- ---------- Total distributions declared to shareholders (0.02) (0.09) - ---------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 12.47 $ 11.25 Total return (f) 11.02%(g)(h) 12.20%(g) - ---------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (i) 1.07%(j) 1.03%(j) Net investment income (i) 0.20%(j) 0.89%(j) Waiver/reimbursement --%(j)(k) -- Portfolio turnover rate 62%(g) 55%(g) Net assets, end of period (000's) $ 198,642 $ 190,195 - ----------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31, --------------------------------------------------------------------------- CLASS Z SHARES 2002 2001 2000 1999 1998 - ------------------------------------------------------------------------------------------------------------------------------ NET ASSET VALUE, BEGINNING OF PERIOD $ 12.77 $ 16.43 $ 16.02 $ 14.90 $ 16.28 - ------------------------------------------------------------------------------------------------------------------------------ INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.07(d) 0.06 0.08 0.13(d) 0.15 Net realized and unrealized gain (loss) on investments (2.23) (2.39) 1.32 2.02 1.31 ---------- ----------- ---------- ---------- ---------- Total from investment operations (2.16) (2.33) 1.40 2.15 1.46 - ------------------------------------------------------------------------------------------------------------------------------ LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income (0.06) (0.05) (0.08) (0.12) (0.16) In excess of net investment income -- --(e) --(e) -- -- From net realized gains (0.44) (1.28) (0.91) (0.91) (2.68) ---------- ----------- ---------- ---------- ---------- Total distributions declared to shareholders (0.50) (1.33) (0.99) (1.03) (2.84) - ------------------------------------------------------------------------------------------------------------------------------ NET ASSET VALUE, END OF PERIOD $ 10.11 $ 12.77 $ 16.43 $ 16.02 $ 14.90 Total return (f) (17.85)%(h) (15.12)% 9.38% 14.85% 10.10% - ------------------------------------------------------------------------------------------------------------------------------ RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (i) 0.97% 0.97% 1.00% 1.05% 1.03% Net investment income (i) 0.56% 0.44% 0.44% 0.76% 1.00% Waiver/reimbursement 0.03% -- -- -- -- Portfolio turnover rate 13% 19% 42% 20% 38% Net assets, end of period (000's) $ 340,496 $ 460,302 $ 678,398 $ 309,106 $ 254,060 - ------------------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Large Cap Core Fund was renamed the Columbia Large Cap Core Fund. (b) The Fund changed its fiscal year end from October 31 to September 30. (c) On December 9, 2002, the Galaxy Growth & Income Fund, Trust shares were redesignated Liberty Large Cap Core Fund, Class Z shares. (d) Per share data was calculated using average shares outstanding during the period. (e) Rounds to less than $0.01 per share. (f) Total return at net asset value assuming all distributions reinvested. (g) Not annualized. (h) Had the Investment Advisor and/or any of its affiliates not waived or reimbursed a portion of expenses, total return would have been reduced. (i) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (j) Annualized. (k) Rounds to less than 0.01%. 115 FINANCIAL HIGHLIGHTS____________________________________________________________ Columbia Small Cap Fund SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED) SIX MONTHS PERIOD ENDED ENDED MARCH 31, SEPTEMBER 30, CLASS A SHARES 2004 (a) 2003 (b)(c) - ------------------------------------------------------------------------------------ NET ASSET VALUE, BEGINNING OF PERIOD $ 15.30 $ 12.64 - ------------------------------------------------------------------------------------ INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) (0.03)(e) (0.04)(e) Net realized and unrealized gain (loss) on investments 2.84 3.35 ---------- ------------- Total from investment operations 2.81 3.31 - ------------------------------------------------------------------------------------ LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income -- -- From net realized gains (0.44) (0.65) ---------- ------------- Total distributions declared to shareholders (0.44) (0.65) - ------------------------------------------------------------------------------------ NET ASSET VALUE, END OF PERIOD $ 17.67 $ 15.30 Total return (f)(g) 18.60%(h) 27.25%(h) - ------------------------------------------------------------------------------------ RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (i) 1.12%(j) 1.24%(j) Net investment income (loss)(i) (0.36)%(j) (0.28)%(j) Waiver/reimbursement --%(j)(k) 0.02%(j) Portfolio turnover rate 10%(h) 19%(h) Net assets, end of period (000's) $ 205,439 $ 57,462 - ------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31, --------------------------------------------------- CLASS A SHARES 2002 2001 2000 1999 (d) - ------------------------------------------------------------------------------------------------------ NET ASSET VALUE, BEGINNING OF PERIOD $ 14.05 $ 14.33 $ 13.04 $ 13.59 - ------------------------------------------------------------------------------------------------------ INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) (0.03)(e) 0.02(e) 0.05(e) 0.03 Net realized and unrealized gain (loss) on investments (0.07) 1.61 2.64 0.73 ------- -------- ------- -------- Total from investment operations (0.10) 1.63 2.69 0.76 - ------------------------------------------------------------------------------------------------------ LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income -- (0.04) (0.04) (0.04) From net realized gains (1.31) (1.87) (1.36) (1.27) ------- -------- ------- -------- Total distributions declared to shareholders (1.31) (1.91) (1.40) (1.31) - ------------------------------------------------------------------------------------------------------ NET ASSET VALUE, END OF PERIOD $ 12.64 $ 14.05 $ 14.33 $ 13.04 Total return (f)(g) (1.73)% 12.87% 22.26% 5.80% - ------------------------------------------------------------------------------------------------------ RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (i) 1.29% 1.23% 1.16% 1.18% Net investment income (loss)(i) (0.19)% 0.17% 0.36% 0.26% Waiver/reimbursement 0.01% 0.04% 0.16% 0.22% Portfolio turnover rate 23% 46% 43% 42% Net assets, end of period (000's) $ 210 $ 168 $ 189 $ 175 - ------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Small Cap Fund was renamed the Columbia Small Cap Fund. (b) The Fund changed its fiscal year end from October 31 to September 30. (c) On November 18, 2002, the Galaxy Small Cap Value Fund, Prime A shares were redesignated Liberty Small Cap Fund, Class A shares. (d) The Fund began offering Prime B shares on November 1, 1998. (e) Per share data was calculated using average shares outstanding during the period. (f) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (g) Had the Investment Advisor and/or any of its affiliates not waived or reimbursed a portion of expenses, total return would have been reduced. (h) Not annualized. (i) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (j) Annualized. (k) Rounds to less than 0.01%. 116 FINANCIAL HIGHLIGHTS____________________________________________________________ Columbia Small Cap Fund SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED) SIX MONTHS PERIOD ENDED ENDED MARCH 31, SEPTEMBER 30, CLASS B SHARES 2004 (a) 2003 (b)(c) - ---------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 14.75 $ 12.31 - ---------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (0.09)(e) (0.15)(e) Net realized and unrealized gain (loss) on investments 2.76 3.24 ---------- ----------- Total from investment operations 2.67 3.09 - ---------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net realized gains (0.34) (0.65) - ---------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 17.08 $ 14.75 Total return (f)(g) 18.28%(h) 26.14%(h) - ---------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (i) 1.88%(j) 2.10%(j) Net investment loss (i) (1.12)%(j) (1.14)%(j) Waiver/reimbursement --%(j)(k) 0.02%(j) Portfolio turnover rate 10%(h) 19%(h) Net assets, end of period (000's) $ 41,976 $ 11,122 - ----------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31, --------------------------------------------------- CLASS B SHARES 2002 2001 2000 1999 (d) - ------------------------------------------------------------------------------------------------------ NET ASSET VALUE, BEGINNING OF PERIOD $ 13.82 $ 14.19 $ 12.98 $ 13.59 - ------------------------------------------------------------------------------------------------------ INCOME FROM INVESTMENT OPERATIONS: Net investment loss (0.14)(e) (0.10)(e) (0.05)(e) (0.05) Net realized and unrealized gain (loss) on investments (0.06) 1.60 2.62 0.71 Total from investment operations (0.20) 1.50 2.57 0.66 - ------------------------------------------------------------------------------------------------------ LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net realized gains (1.31) (1.87) (1.36) (1.27) - ------------------------------------------------------------------------------------------------------ NET ASSET VALUE, END OF PERIOD $ 12.31 $ 13.82 $ 14.19 $ 12.98 Total return (f)(g) (2.55)% 11.91% 21.46% 4.96% - ------------------------------------------------------------------------------------------------------ RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (i) 2.12% 2.08% 1.93% 1.93% Net investment loss (i) (1.02)% (0.68)% (0.41)% (0.49)% Waiver/reimbursement 0.01% 0.07% 0.53% 0.56% Portfolio turnover rate 23% 46% 43% 42% Net assets, end of period (000's) $ 282 $ 198 $ 170 $ 190 - ------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Small Cap Fund was renamed the Columbia Small Cap Fund. (b) The Fund changed its fiscal year end from October 31 to September 30. (c) On November 18, 2002, the Galaxy Small Cap Value Fund, Prime B shares were redesignated Liberty Small Cap Fund, Class B shares. (d) The Fund began offering Prime B shares on November 1, 1998. (e) Per share data was calculated using average shares outstanding during the period. (f) Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge. (g) Had the Investment Advisor and/or any of its affiliates not waived or reimbursed a portion of expenses, total return would have been reduced. (h) Not annualized. (i) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (j) Annualized. (k) Rounds to less than 0.01%. 117 FINANCIAL HIGHLIGHTS____________________________________________________________ Columbia Small Cap Fund SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED) SIX MONTHS ENDED PERIOD ENDED MARCH 31, SEPTEMBER 30, CLASS C SHARES 2004 (a) 2003 (b)(c) - ---------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 14.77 $ 12.55 - ---------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (d) (0.09) (0.14) Net realized and unrealized gain on investments 2.75 3.01 ----------- ------------- Total from investment operations 2.66 2.87 - ---------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net realized gains (0.34) (0.65) - ---------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 17.09 $ 14.77 Total return (e)(f)(g) 18.18% 23.90% - ---------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (h)(i) 1.87% 2.03% Net investment loss (h)(i) (1.11)% (1.10)% Waiver/reimbursement (i) --%(j) 0.02% Portfolio turnover rate (g) 10% 19% Net assets, end of period (000's) $ 65,384 $ 12,670 - ----------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Small Cap Fund was renamed the Columbia Small Cap Fund. (b) The Fund changed its fiscal year end from October 31 to September 30. (c) Class C shares were initially offered on November 18, 2002. Per share data and total return reflect activity from that date. (d) Per share data was calculated using average shares outstanding during the period. (e) Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge. (f) Had the Investment Advisor and/or any of its affiliates not waived or reimbursed a portion of expenses, total return would have been reduced. (g) Not annualized. (h) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (i) Annualized. (j) Rounds to less than 0.01%. 118 FINANCIAL HIGHLIGHTS____________________________________________________________ Columbia Small Cap Fund SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED) SIX MONTHS PERIOD ENDED ENDED MARCH 31, SEPTEMBER 30, CLASS G SHARES 2004 (a) 2003 (b)(c) - ------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 14.63 $ 12.22 - ------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (0.09)(e) (0.12)(e) Net realized and unrealized gain (loss) on investments 2.73 3.18 ---------- ------------- Total from investment operations 2.64 3.06 - ------------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net realized gains (0.34) (0.65) - ------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 16.93 $ 14.63 Total return (f) 18.22%(g)(h) 26.09%(g)(h) - ------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (i) 1.86%(j) 2.10%(j) Net investment loss (i) (1.10)%(j) (1.03)%(j) Waiver/reimbursement --%(j)(k) 0.02%(j) Portfolio turnover rate 10%(g) 19%(g) Net assets, end of period (000's) $ 11,611 $ 10,353 - -------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31, --------------------------------------------------------- CLASS G SHARES 2002 2001 2000 1999 (d) - ------------------------------------------------------------------------------------------------------------ NET ASSET VALUE, BEGINNING OF PERIOD $ 13.72 $ 14.13 $ 12.96 $ 13.59 - ------------------------------------------------------------------------------------------------------------ INCOME FROM INVESTMENT OPERATIONS: Net investment loss (0.14)(e) (0.11)(e) (0.10)(e) (0.04) Net realized and unrealized gain (loss) on investments (0.05) 1.57 2.63 0.68 --------- --------- --------- --------- Total from investment operations (0.19) 1.46 2.53 0.64 - ------------------------------------------------------------------------------------------------------------ LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net realized gains (1.31) (1.87) (1.36) (1.27) - ------------------------------------------------------------------------------------------------------------ NET ASSET VALUE, END OF PERIOD $ 12.22 $ 13.72 $ 14.13 $ 12.96 Total return (f) (2.49)%(h) 11.73% 21.06%(h) 4.80%(h) - ------------------------------------------------------------------------------------------------------------ RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (i) 2.12% 2.21% 2.23% 2.10% Net investment loss (i) (1.02)% (0.80)% (0.71)% (0.66)% Waiver/reimbursement 0.01% -- 0.18% 0.78% Portfolio turnover rate 23% 46% 43% 42% Net assets, end of period (000's) $ 9,046 $ 5,278 $ 2,838 $ 1,637 - ------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Small Cap Fund was renamed the Columbia Small Cap Fund. (b) The Fund changed its fiscal year end from October 31 to September 30. (c) On November 18, 2002, the Galaxy Small Cap Value Fund, Retail B shares were redesignated Liberty Small Cap Fund, Class G shares. (d) The Fund began offering Retail B shares on November 1, 1998. (e) Per share data was calculated using average shares outstanding during the period. (f) Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge. (g) Not annualized. (h) Had the Investment Advisor and/or any of its affiliates not waived or reimbursed a portion of expenses, total return would have been reduced. (i) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (j) Annualized. (k) Rounds to less than 0.01%. 119 FINANCIAL HIGHLIGHTS____________________________________________________________ Columbia Small Cap Fund SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED) SIX MONTHS PERIOD ENDED ENDED MARCH 31, SEPTEMBER 30, CLASS T SHARES 2004 (a) 2003 (b)(c) - ----------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 15.16 $ 12.55 - ----------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) (0.04)(d) (0.03)(d) Net realized and unrealized gain (loss) on investments 2.83 3.29 --------- --------- Total from investment operations 2.79 3.26 - ----------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income -- -- From net realized gains (0.42) (0.65) --------- --------- Total distributions declared to shareholders (0.42) (0.65) - ----------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 17.53 $ 15.16 Total return (f) 18.61%(g)(h) 27.03%(g)(h) - ----------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (i) 1.19%(j) 1.34%(j) Net investment income (loss)(i) (0.43)%(j) (0.26)%(j) Waiver/reimbursement --%(j)(k) 0.02%(j) Portfolio turnover rate 10%(g) 19%(g) Net assets, end of period (000's) $ 157,954 $ 134,455 - -----------------------------------------------------------------------------
YEAR ENDED OCTOBER 31, -------------------------------------------------------------------------- CLASS T SHARES 2002 2001 2000 1999 1998 - ------------------------------------------------------------------------------------------------------------------------ NET ASSET VALUE, BEGINNING OF PERIOD $ 13.96 $ 14.25 $ 12.98 $ 13.53 $ 18.29 - ------------------------------------------------------------------------------------------------------------------------ Income from investment operations: Net investment income (loss) (0.03)(d) --(d)(e) 0.01(d) 0.02 0.08 Net realized and unrealized gain (loss) on investments (0.07) 1.59 2.63 0.73 (2.08) --------- --------- --------- ---------- ---------- Total from investment operations (0.10) 1.59 2.64 0.75 (2.00) - ------------------------------------------------------------------------------------------------------------------------ LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income -- (0.01) (0.01) (0.03) (0.08) From net realized gains (1.31) (1.87) (1.36) (1.27) (2.68) --------- --------- --------- ---------- ---------- Total distributions declared to shareholders (1.31) (1.88) (1.37) (1.30) (2.76) - ------------------------------------------------------------------------------------------------------------------------ NET ASSET VALUE, END OF PERIOD $ 12.55 $ 13.96 $ 14.25 $ 12.98 $ 13.53 Total return (f) (1.75)%(h) 12.66% 21.96%(h) 5.68%(h) (12.52)%(h) - ------------------------------------------------------------------------------------------------------------------------ RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (i) 1.33% 1.42% 1.44% 1.31% 1.31% Net investment income (loss)(i) (0.23)% (0.02)% 0.08% 0.13% 0.38% Waiver/reimbursement 0.01% -- 0.11% 0.28% 0.14% Portfolio turnover rate 23% 46% 43% 42% 33% Net assets, end of period (000's) $ 115,468 $ 100,159 $ 87,457 $ 80,870 $ 87,781 - ------------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Small Cap Fund was renamed the Columbia Small Cap Fund. (b) The Fund changed its fiscal year end from October 31 to September 30. (c) On November 18, 2002, the Galaxy Small Cap Value Fund, Retail A shares were redesignated Liberty Small Cap Fund, Class T shares. (d) Per share data was calculated using average shares outstanding during the period. (e) Rounds to less than $0.01 per share. (f) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (g) Not annualized. (h) Had the Investment Advisor and/or any of its affiliates not waived or reimbursed a portion of expenses, total return would have been reduced. (i) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (j) Annualized. (k) Rounds to less than 0.01%. 120 FINANCIAL HIGHLIGHTS____________________________________________________________ Columbia Small Cap Fund SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED) SIX MONTHS PERIOD ENDED ENDED MARCH 31, SEPTEMBER 30, CLASS Z SHARES 2004 (a) 2003 (b)(c) - -------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 15.45 $ 12.75 - -------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) (0.01)(d) 0.02(d) Net realized and unrealized gain (loss) on investments 2.88 3.34 ------------ ---------- Total from investment operations 2.87 3.36 - -------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income -- (0.01) From net realized gains (0.49) (0.65) ------------ ---------- Total distributions declared to shareholders (0.49) (0.66) - -------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 17.83 $ 15.45 Total return (e) 18.78%(f)(g) 27.44%(f)(g) - -------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (h) 0.87%(i) 0.92%(i) Net investment income (loss)(h) (0.11)%(i) 0.14%(i) Waiver/reimbursement --%(i)(j) 0.02%(i) Portfolio turnover rate 10%(f) 19%(f) Net assets, end of period (000's) $ 1,099,106 $ 789,666 - --------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31, ---------------------------------------------------------------------- CLASS Z SHARES 2002 2001 2000 1999 1998 - ----------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 14.11 $ 14.38 $ 13.07 $ 13.61 $ 18.37 - ----------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) 0.03(d) 0.07(d) 0.08(d) 0.05 0.11 Net realized and unrealized gain (loss) on investments (0.07) 1.60 2.65 0.74 (2.06) ---------- --------- --------- ---------- ---------- Total from investment operations (0.04) 1.67 2.73 0.79 (1.95) - ----------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income (0.01) (0.07) (0.06) (0.06) (0.13) From net realized gains (1.31) (1.87) (1.36) (1.27) (2.68) ---------- --------- --------- ---------- ---------- Total distributions declared to shareholders (1.32) (1.94) (1.42) (1.33) (2.81) - ----------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 12.75 $ 14.11 $ 14.38 $ 13.07 $ 13.61 Total return (e) (1.26)%(g) 13.20% 22.62% 6.02% (12.07)% - ----------------------------------------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (h) 0.90% 0.92% 0.94% 0.97% 0.96% Net investment income (loss)(h) 0.20% 0.48% 0.58% 0.47% 0.73% Waiver/reimbursement 0.01% -- -- -- -- Portfolio turnover rate 23% 46% 43% 42% 33% Net assets, end of period (000's) $ 485,197 $ 425,687 $ 332,703 $ 255,268 $ 202,385 - -----------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Small Cap Fund was renamed the Columbia Small Cap Fund. (b) The Fund changed its fiscal year end from October 31 to September 30. (c) On November 18, 2002, the Galaxy Small Cap Value Fund, Trust shares were redesignated Liberty Small Cap Fund, Class Z shares. (d) Per share data was calculated using average shares outstanding during the period. (e) Total return at net asset value assuming all distributions reinvested. (f) Not annualized. (g) Had the Investment Advisor and/or any of its affiliates not waived or reimbursed a portion of expenses, total return would have been reduced. (h) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (i) Annualized. (j) Rounds to less than 0.01%. 121 FINANCIAL HIGHLIGHTS____________________________________________________________ Columbia Small Company Equity Fund SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS: (UNAUDITED) SIX MONTHS ENDED PERIOD ENDED MARCH 31, SEPTEMBER 30, CLASS A SHARES 2004 (a) 2003 (b)(c) - ------------------------------------------------------------------------------ NET ASSET VALUE, BEGINNING OF PERIOD $ 14.10 $ 11.74 - ------------------------------------------------------------------------------ INCOME FROM INVESTMENT OPERATIONS: Net investment loss (d) (0.09) (0.17) Net realized and unrealized gain on investments 3.45 2.53 ----------- --------- Total from investment operations 3.36 2.36 - ------------------------------------------------------------------------------ NET ASSET VALUE, END OF PERIOD $ 17.46 $ 14.10 Total return (e)(f) 23.83%(g) 20.10% - ------------------------------------------------------------------------------ RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (h)(i) 1.35% 1.62% Net investment loss (h)(i) (1.10)% (1.42)% Waiver/reimbursement --%(i)(j) -- Portfolio turnover rate (f) 34% 123% Net assets, end of period (000's) $ 1,693 $ 384 - ------------------------------------------------------------------------------ (a) On October 13, 2003, the Liberty Small Company Equity Fund was renamed the Columbia Small Company Equity Fund. (b) The Fund changed its fiscal year end from October 31 to September 30. (c) Class A shares were initially offered on November 18, 2002. Per share data and total return reflect activity from that date. (d) Per share data was calculated using average shares outstanding during the period. (e) Total return at net asset value assuming no initial sales charge or contingent deferred sales charge. (f) Not annualized. (g) Had the Investment Advisor or any of its affiliates not waived or reimbursed a portion of expenses, total return would have been reduced. (h) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (i) Annualized. (j) Rounds to less than 0.01%. 122 FINANCIAL HIGHLIGHTS____________________________________________________________ Columbia Small Company Equity Fund SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS: (UNAUDITED) SIX MONTHS ENDED PERIOD ENDED MARCH 31, SEPTEMBER 30, CLASS B SHARES 2004 (a) 2003 (b)(c) - ----------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 13.26 $ 11.13 - ----------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (d) (0.14) (0.25) Net realized and unrealized gain on investments 3.24 2.38 ----------- ----------- Total from investment operations 3.10 2.13 - ----------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 16.36 $ 13.26 Total return (e)(f) 23.38%(g) 19.14% - ----------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (h)(i) 2.06% 2.53% Net investment loss (h)(i) (1.80)% (2.24)% Waiver/reimbursement --%(i)(j) -- Portfolio turnover rate (f) 34% 123% Net assets, end of period (000's) $ 1,131 $ 203 - ----------------------------------------------------------------------------- (a) On October 13, 2003, the Liberty Small Company Equity Fund was renamed the Columbia Small Company Equity Fund. (b) The Fund changed its fiscal year end from October 31 to September 30. (c) Class B shares were initially offered on November 18, 2002. Per share data and total return reflect activity from that date. (d) Per share data was calculated using average shares outstanding during the period. (e) Total return at net asset value assuming no contingent deferred sales charge. (f) Not annualized. (g) Had the Investment Advisor or any of its affiliates not waived or reimbursed a portion of expenses, total return would have been reduced. (h) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (i) Annualized. (j) Rounds to less than 0.01%. 123 FINANCIAL HIGHLIGHTS____________________________________________________________ Columbia Small Company Equity Fund SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS: (UNAUDITED) SIX MONTHS ENDED PERIOD ENDED MARCH 31, SEPTEMBER 30, CLASS C SHARES 2004 (a) 2003 (b)(c) - ------------------------------------------------------------------------------ NET ASSET VALUE, BEGINNING OF PERIOD $ 13.22 $ 11.13 - ------------------------------------------------------------------------------ INCOME FROM INVESTMENT OPERATIONS: Net investment loss (d) (0.14) (0.29) Net realized and unrealized gain on investments 3.24 2.38 --------- ----------- Total from investment operations 3.10 2.09 - ------------------------------------------------------------------------------ NET ASSET VALUE, END OF PERIOD $ 16.32 $ 13.22 Total return (e)(f) 23.45%(g) 18.78% - ------------------------------------------------------------------------------ RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (h)(i) 2.05% 2.84% Net investment loss (h)(i) (1.79)% (2.59)% Waiver/reimbursement --%(i)(j) -- Portfolio turnover rate (f) 34% 123% Net assets, end of period (000's) $ 447 $ 56 - ------------------------------------------------------------------------------ (a) On October 13, 2003, the Liberty Small Company Equity Fund was renamed the Columbia Small Company Equity Fund. (b) The Fund changed its fiscal year end from October 31 to September 30. (c) Class C shares were initially offered on November 18, 2002. Per share data and total return reflect activity from that date. (d) Per share data was calculated using average shares outstanding during the period. (e) Total return at net asset value assuming no contingent deferred sales charge. (f) Not annualized. (g) Had the Investment Advisor or any of its affiliates not waived or reimbursed a portion of expenses, total return would have been reduced. (h) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (i) Annualized. (j) Rounds to less than 0.01%. 124 FINANCIAL HIGHLIGHTS____________________________________________________________ Columbia Small Company Equity Fund SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED) SIX MONTHS PERIOD ENDED ENDED MARCH 31, SEPTEMBER 30, CLASS G SHARES 2004 (a) 2003 (b)(c) - ----------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 13.24 $ 10.65 - ----------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (0.16)(d) (0.25)(d) Net realized and unrealized gain (loss) on investments 3.25 2.84 --------- --------- Total from investment operations 3.09 2.59 - ----------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net realized gains -- -- In excess of net realized gains -- -- --------- --------- Total distributions declared to shareholders -- -- - ----------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 16.33 $ 13.24 Total return (f) 23.34%(g)(h) 24.32%(g) - ----------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (i) 2.26%(j) 2.53%(j) Net investment loss (i) (2.06)%(j) (2.34)%(j) Waiver/reimbursement --%(j)(k) -- Portfolio turnover rate 34%(g) 123%(g) Net assets, end of period (000's) $ 6,348 $ 6,651 - -----------------------------------------------------------------------------
YEAR ENDED OCTOBER 31, ------------------------------------------------------------------------ CLASS G SHARES 2002 2001 2000 1999 1998 - ------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 14.30 $ 21.10 $ 15.31 $ 13.39 $ 20.73 - ------------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (0.27)(d) (0.25) (0.37) (0.34) (0.30) Net realized and unrealized gain (loss) on investments (3.38) (3.15) 6.16 2.26 (4.78) --------- --------- --------- ---------- ---------- Total from investment operations (3.65) (3.40) 5.79 1.92 (5.08) - ------------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net realized gains -- (3.40) -- -- (2.26) In excess of net realized gains -- --(e) -- -- -- --------- --------- --------- ---------- ---------- Total distributions declared to shareholders -- (3.40) -- -- (2.26) - ------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 10.65 $ 14.30 $ 21.10 $ 15.31 $ 13.39 Total return (f) (25.52)%(h) (17.66)% 37.82%(h) 14.34%(h) (26.72)%(h) - ------------------------------------------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (i) 2.29% 2.25% 2.24% 2.16% 2.11% Net investment loss (i) (1.97)% (1.74)% (1.79)% (2.04)% (1.78)% Waiver/reimbursement 0.03% -- 0.01% 0.16% 0.05% Portfolio turnover rate 96% 75% 91% 105% 78% Net assets, end of period (000's) $ 9,148 $ 15,190 $ 18,936 $ 12,212 $ 12,565 - -------------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Small Company Equity Fund was renamed the Columbia Small Company Equity Fund. (b) The Fund changed its fiscal year end from October 31 to September 30. (c) On November 18, 2002, the Galaxy Small Company Equity Fund, Retail B shares were redesignated Liberty Small Company Equity Fund, Class G shares. (d) Per share data was calculated using average shares outstanding during the period. (e) Rounds to less than $0.01 per share. (f) Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge. (g) Not annualized. (h) Had the Investment Advisor and/or any of its affiliates not waived or reimbursed a portion of expenses, total return would have been reduced. (i) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (j) Annualized. (k) Rounds to less than 0.01%. 125 FINANCIAL HIGHLIGHTS____________________________________________________________ Columbia Small Company Equity Fund SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED) SIX MONTHS PERIOD ENDED ENDED MARCH 31, SEPTEMBER 30, CLASS T SHARES 2004 (a) 2003 (b)(c) - ------------------------------------------------------------------------------ NET ASSET VALUE, BEGINNING OF PERIOD $ 14.09 $ 11.23 - ------------------------------------------------------------------------------ INCOME FROM INVESTMENT OPERATIONS: Net investment loss (0.10)(d) (0.15)(d) Net realized and unrealized gain (loss) on investments 3.46 3.01 ----------- ---------- Total from investment operations 3.36 2.86 - ------------------------------------------------------------------------------ LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net realized gains -- -- In excess of net realized gains -- -- ----------- ---------- Total distributions declared to shareholders -- -- - ------------------------------------------------------------------------------ NET ASSET VALUE, END OF PERIOD $ 17.45 $ 14.09 Total return (f) 23.85%(g)(h) 25.47%(g)(h) - ------------------------------------------------------------------------------ RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (i) 1.43%(j) 1.54%(j) Net investment loss (i) (1.23)%(j) (1.35)%(j) Waiver/reimbursement 0.02%(j) 0.05%(j) Portfolio turnover rate 34%(g) 123%(g) Net assets, end of period (000's) $ 78,840 $ 66,780 - ------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31, ---------------------------------------------------------------------- CLASS T SHARES 2002 2001 2000 1999 1998 - ---------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 14.95 $ 21.75 $ 15.66 $ 13.63 $ 20.94 - ---------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (0.16)(d) (0.17) (0.22) (0.23) (0.19) Net realized and unrealized gain (loss) on investments (3.56) (3.23) 6.31 2.26 (4.86) --------- --------- --------- ---------- ---------- Total from investment operations (3.72) (3.40) 6.09 2.03 (5.05) - ---------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net realized gains -- (3.40) -- -- (2.26) In excess of net realized gains -- --(e) -- -- -- --------- --------- --------- ---------- ---------- Total distributions declared to shareholders -- (3.40) -- -- (2.26) - ---------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 11.23 $ 14.95 $ 21.75 $ 15.66 $ 13.63 Total return (f) (24.88)%(h) (17.03)% 38.89% 14.89%(h) (26.26)%(h) - ---------------------------------------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (i) 1.46% 1.42% 1.44% 1.53% 1.46% Net investment loss (i) (1.14)% (0.91)% (0.99)% (1.41)% (1.13)% Waiver/reimbursement 0.03% -- -- 0.01% 0.01% Portfolio turnover rate 96% 75% 91% 105% 78% Net assets, end of period (000's) $ 57,537 $ 84,332 $ 125,427 $ 87,921 $ 95,831 - ----------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Small Company Equity Fund was renamed the Columbia Small Company Equity Fund. (b) The Fund changed its fiscal year end from October 31 to September 30. (c) On November 18, 2002, the Galaxy Small Company Equity Fund, Retail A shares were redesignated Liberty Small Company Equity Fund, Class T shares. (d) Per share data was calculated using average shares outstanding during the period. (e) Rounds to less than $0.01 per share. (f) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (g) Not annualized. (h) Had the Investment Advisor and/or any of its affiliates not waived or reimbursed a portion of expenses, total return would have been reduced. (i) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (j) Annualized. 126 FINANCIAL HIGHLIGHTS____________________________________________________________ Columbia Small Company Equity Fund SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED) SIX MONTHS PERIOD ENDED ENDED MARCH 31, SEPTEMBER 30, CLASS Z SHARES 2004 (a) 2003 (b)(c) - ------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 14.85 $ 11.79 - ------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (0.07)(d) (0.11)(d) Net realized and unrealized gain (loss) on investments 3.65 3.17 ----------- ----------- Total from investment operations 3.58 3.06 - ------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net realized gains -- -- In excess of net realized gains -- -- ----------- ----------- Total distributions declared to shareholders -- -- - ------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 18.43 $ 14.85 Total return (f) 24.11%(g)(h) 25.95%(g) - ------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (i) 1.07%(j) 1.12%(j) Net investment loss (i) (0.87)%(j) (0.93)%(j) Waiver/reimbursement --%(j)(k) -- Portfolio turnover rate 34%(g) 123%(g) Net assets, end of period (000's) $ 337,083 $ 293,603 - -------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31, ----------------------------------------------------------------- CLASS Z SHARES 2002 2001 2000 1999 1998 - ----------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 15.63 $ 22.48 $ 16.13 $ 13.96 $ 21.32 - ----------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (0.11)(d) (0.10) (0.12) (0.16) (0.14) Net realized and unrealized gain (loss) on investments (3.73) (3.35) 6.47 2.33 (4.96) -------- --------- --------- ---------- ---------- Total from investment operations (3.84) (3.45) 6.35 2.17 (5.10) - ----------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net realized gains -- (3.40) -- -- (2.26) In excess of net realized gains -- --(e) -- -- -- -------- --------- --------- ---------- ---------- Total distributions declared to shareholders -- (3.40) -- -- (2.26) - ----------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 11.79 $ 15.63 $ 22.48 $ 16.13 $ 13.96 Total return (f) (24.62)%(h) (16.63)% 39.43% 15.54% (26.00)% - ----------------------------------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (i) 1.04% 1.03% 1.03% 1.12% 1.09% Net investment loss (i) (0.72)% (0.52)% (0.58)% (1.00)% (0.76)% Waiver/reimbursement 0.01% -- -- -- -- Portfolio turnover rate 96% 75% 91% 105% 78% Net assets, end of period (000's) $217,377 $ 318,414 $ 422,579 $ 233,326 $ 222,675 - -----------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Small Company Equity Fund was renamed the Columbia Small Company Equity Fund. (b) The Fund changed its fiscal year end from October 31 to September 30. (c) On November 18, 2002, the Galaxy Small Company Equity Fund, Trust shares were renamed Liberty Small Company Equity Fund, Class Z shares. (d) Per share data was calculated using average shares outstanding during the period. (e) Rounds to less than $0.01 per share. (f) Total return at net asset value assuming all distributions reinvested. (g) Not annualized. (h) Had the Investment Advisor and/or any of its affiliates not waived or reimbursed a portion of expenses, total return would have been reduced. (i) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (j) Annualized. (k) Rounds to less than 0.01%. 127 IMPORTANT INFORMATION ABOUT THIS REPORT_________________________________________ Columbia Equity Funds TRANSFER AGENT Columbia Funds Services, Inc. P.O. Box 8081 Boston MA 02266-8081 800.345.6611 DISTRIBUTOR Columbia Funds Distributor, Inc. One Financial Center Boston MA 02111 INVESTMENT ADVISOR Columbia Management Advisors, Inc. 100 Federal Street Boston MA 02110 The funds mail one shareholder report to each shareholder address. If you would like more than one report, please call shareholder services at 800-345-6611 and additional reports will be sent to you. This report has been prepared for shareholders of Columbia Equity Funds. This report may also be used as sales literature when preceded or accompanied by the current prospectus which provides details of sales charges, investment objectives and operating policies of the funds and with the most recent copy of the Columbia Funds Performance Update. A description of the policies and procedures that the funds use to determine how to vote proxies relating to their portfolio securities is available (i) without charge, upon request, by calling 800-345-6611 and (ii) on the Securities and Exchange Commission's website at http://www.sec.gov. 128 This page intentionally left blank. Photo of eDelivery Help your fund reduce printing and postage costs! Elect to get your shareholder reports by electronic delivery. With Columbia's eDelivery program, you receive an e-mail message when your shareholder report becomes available online. If your fund account is registered with Columbia Funds, you can sign up quickly and easily on our website at www.columbiafunds.com. Please note -- if you own your fund shares through a financial institution, contact the institution to see if it offers electronic delivery. If you own your fund shares through a retirement plan, electronic delivery may not be available to you. Columbia Equity Funds SEMIANNUAL REPORT, MARCH 31, 2004 PRSRT STD U.S. Postage PAID Holliston, MA Permit NO. 20 Columbia Funds LOGO A MEMBER OF COLUMBIA MANAGEMENT GROUP (C)2004 COLUMBIA FUNDS DISTRIBUTOR, INC. ONE FINANCIAL CENTER, BOSTON, MA 02111-2621 800.426.3750 WWW.COLUMBIAFUNDS.COM G-03/624R-0304 (05/04) 04/1036 ITEM 2. CODE OF ETHICS. Not applicable at this time. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. Not applicable at this time. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Not applicable at this time. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable. ITEM 6. SCHEDULE OF INVESTMENTS Not applicable at this time. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not applicable. ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. The registrant has not filed Schedule 14A subsequent to the effective date of that Schedule's Item 7(d)(2)(ii)(G). However, it is the registrant's policy to consider candidates for the Board of Trustees/Directors who are recommend by shareholders. A Fund shareholder who wishes to nominate a candidate to the Board may send information regarding prospective candidates to the Fund's Governance Committee, care of the Fund's Secretary. The information should include evidence of the shareholder's Fund ownership, a full listing of the proposed candidate's education, experience, current employment, date of birth, names and addresses of at least three professional references, information as to whether the candidate is not an "interested person" under the 1940 Act and "independent" under NYSE Listing Standards in relation to the Fund, and such other information as may be helpful to the independent trustees/directors in evaluating the candidate. All satisfactorily completed information packages regarding a candidate will be forwarded to an independent trustee/director for consideration. ITEM 10. CONTROLS AND PROCEDURES. (a) The registrant's principal executive officer and principal financial officer, based on his evaluation of the registrant's disclosure controls and procedures as of a date within 90 days of the filing of this report, has concluded that such controls and procedures are adequately designed to ensure that information required to be disclosed by the registrant in Form N-CSR is accumulated and communicated to the registrant's management, including the principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. (b) There were no changes in the registrant's internal control over financial reporting that occurred during the registrant's last fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 11. EXHIBITS. (a)(1) Code of ethics required to be disclosed under Item 2 of Form N-CSR: Not applicable at this time. (a)(2) Certifications pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) attached hereto as Exhibit 99.CERT. (a)(3) Not applicable. (b) Certification pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)) attached hereto as Exhibit 99.906CERT. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (registrant) Columbia Funds Trust XI ------------------------------------------------------------------ By (Signature and Title) /s/ J. Kevin Connaughton ------------------------------------------------------ J. Kevin Connaughton, President and Treasurer Date June 7, 2004 -------------------------------------------------------------------------- Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By (Signature and Title) /s/ J. Kevin Connaughton ------------------------------------------------------ J. Kevin Connaughton, President and Treasurer Date June 7, 2004 -------------------------------------------------------------------------- EX-99.CERT 2 file002.txt CERTIFICATIONS I, J. Kevin Connaughton, certify that: 1. I have reviewed this report on Form N-CSR of Columbia Funds Trust XI; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) for the registrant and have: (a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (c) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: June 7, 2004 /s/ J. Kevin Connaughton --------------------------------------------- J. Kevin Connaughton, President and Treasurer EX-99.906CERT 3 file003.txt CERTIFICATIONS CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Certified Shareholder Report of Columbia Funds Trust XI (the "Trust") on Form N-CSR for the period ending March 31, 2004, as filed with the Securities and Exchange Commission on the date hereof ("the Report"), the undersigned hereby certifies that, to his knowledge: 1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Trust. Date: June 7, 2004 /s/ J. Kevin Connaughton --------------------------------------------- J. Kevin Connaughton, President and Treasurer A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to the Registrant and will be retained by the Registrant and furnished to the Securities and Exchange Commission (the "Commission") or its staff upon request. This certification is being furnished to the Commission solely pursuant to 18 U.S.C. ss.1350 and is not being filed as part of the Form N-CSR with the Commission. -----END PRIVACY-ENHANCED MESSAGE-----