N-CSRS 1 file001.txt COLUMBIA FUNDS TRUST VI UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSRS CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-6529 --------------------- Columbia Funds Trust VI ------------------------------------------------------------------------------ (Exact name of registrant as specified in charter) One Financial Center, Boston, Massachusetts 02111 ------------------------------------------------------------------------------ (Address of principal executive offices) (Zip code) Russell L. Kane, 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: 1-617-426-3363 ------------------- Date of fiscal year end: June 30, 2004 ------------------ Date of reporting period: December 31, 2003 ----------------- 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. Photo of: Man holding a puppy in his arms. Columbia Small Cap Value Fund Semiannual Report December 31, 2003 We are Columbia Funds! INSIDE - Management's discussion of the name changes effective October 13, 2003 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 .................................... 15 Statement of Operations ................................................ 16 Statement of Changes in Net Assets ..................................... 17 Notes to Financial Statements .......................................... 19 Financial Highlights ................................................... 24 Important Information About This Report ......................................................... 29 Columbia Funds ............................................................ 30 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 PRESIDENT'S MESSAGE Columbia Small Cap Value Fund Photo of: Joseph R. Palombo DEAR SHAREHOLDER: As you know, your fund has long been associated with a larger investment management organization. In the 1990s, it was associated with Liberty Financial, whose affiliated asset management companies included Colonial, Stein Roe and Newport. In 2001, these companies became part of the asset management division of FleetBoston Financial Corporation, which you know as Columbia Management Group (CMG). In 2003, six of the asset management firms brought together under the CMG umbrella were consolidated and renamed Columbia Management Advisors, Inc. On October 13, 2003, we took the natural next step in this process by changing the name of our funds from Liberty to Columbia. For example, Liberty Small-Cap Value Fund was changed to Columbia Small Cap Value Fund. We have also modified certain fund names that existed under both the Liberty and Columbia brands. A complete list of new fund names and other information related to these changes are available online at our new website address: www.columbiafunds.com. A CONSOLIDATED IDENTITY The consolidation of our management under a single organization and the renaming of our funds are part of a larger effort to create a consistent identity. Having taken these additional steps, we believe it will be easier for shareholders to do business with us. All funds are now listed under "Columbia" in the mutual fund listings section of your newspaper (depending on the newspaper's listing requirements). All service inquiries are now handled by Columbia Funds Services, Inc., the new name of our shareholder service organization. What has not changed is our commitment to our mutual fund shareholders. We remain committed to providing the best possible customer service and to offering a wide variety of mutual funds to help you pursue your long-term financial goals. Should you have questions, please call Columbia Funds at 800-345-6611. In the report that follows, portfolio manager Stephen Barbaro discusses in depth the investment strategies and other factors that affected your fund's performance during the period. We encourage you to read the report carefully. As always, we thank you for your business and we look forward to continuing to serve your investment needs. Sincerely, /s/ Joseph R. Palombo Joseph R. Palombo President Sidebar: SUMMARY o For the six-month period ended December 31, 2003, the fund's class A shares returned 26.75% without sales charge. o The fund outperformed its benchmarks, the S&P Small Cap 600/Barra Value Index and Russell 2000 Value Index, as well as its peer group, the Morningstar Small Value Category. o Strong stock selection in most sectors, particularly industrials, as well as favorable allocations to the technology and financials sectors, helped the fund beat its benchmarks. OBJECTIVE Seeks long-term growth by investing primarily in smaller capitalization equity securities TOTAL NET ASSETS $536.4 million Artwork: 2 arrows up Class A shares 26.75% S&P Small Cap 600/Barra Value Index 23.95% style box: value style; small size FUND PROFILE Columbia Small Cap Value Fund The information below gives you a snapshot of your fund at the end of the reporting period. Because your fund is actively managed, there is no guarantee that these breakdowns and percentages will be maintained in the future. Top 10 holdings as of 12/31/03 (%) -------------------------------------------------------------------------------- Peabody Energy 1.2 -------------------------------------------------------------------------------- Imagistics International 1.0 -------------------------------------------------------------------------------- MFC Bancorp 0.9 -------------------------------------------------------------------------------- US Oncology 0.8 -------------------------------------------------------------------------------- CH Energy Group 0.8 -------------------------------------------------------------------------------- MPS Group 0.8 -------------------------------------------------------------------------------- Kellwood 0.8 -------------------------------------------------------------------------------- Harsco 0.8 -------------------------------------------------------------------------------- Cash America International 0.8 -------------------------------------------------------------------------------- Casella Waste Systems 0.8 -------------------------------------------------------------------------------- Top 5 sectors as of 12/31/03 (%) -------------------------------------------------------------------------------- Financials 22.7 -------------------------------------------------------------------------------- Industrials 20.0 -------------------------------------------------------------------------------- Consumer discretionary 16.2 -------------------------------------------------------------------------------- Information technology 15.0 -------------------------------------------------------------------------------- Materials 8.0 -------------------------------------------------------------------------------- Sector breakdown and portfolio holdings are calculated as a percentage of net assets. Investing in small-cap stock may present special risks, including possible illiquidity and greater price volatility than stocks of larger, more established companies. (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 12/31/2003. 1 Performance of a $10,000 investment 01/01/94 - 12/31/03 ($) -------------------------------------------------------------------------------- sales charge: without with -------------------------------------------------------------------------------- Class A 34,542 32,556 -------------------------------------------------------------------------------- Class B 32,038 32,038 -------------------------------------------------------------------------------- Class C 32,554 32,554 -------------------------------------------------------------------------------- Class I 35,430 n/a -------------------------------------------------------------------------------- Class Z 35,317 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 Value Fund VALUE OF A $10,000 INVESTMENT 01/01/94 - 12/31/03 Mountain chart: Class A Class A shares shares Russell S&P Small S&P without with 2000 Cap Small Cap sales sales Value 600 600/Barra charge charge Index Index Value Index 01/1994 10000 9425 10000 10000 10000 10434 9834 10357 10236 9978 10573 9965 10327 10206 9447 10116 9534 9863 9474 9587 10231 9643 9961 9616 9459 10035 9458 9947 9425 9224 9642 9087 9687 9075 9371 9873 9305 9867 9187 9860 10532 9927 10255 9813 9713 10521 9916 10147 9762 9466 10596 9986 9961 9664 9127 10405 9807 9560 9295 9317 10631 10019 9847 9521 9294 10642 10030 9799 9387 9613 11087 10450 10162 9773 9791 11445 10787 10211 9972 10205 11642 10973 10515 10195 10430 11943 11256 10740 10354 10926 12874 12134 11107 10923 11442 14361 13535 11512 11758 11765 14512 13677 11854 12013 12007 14830 13977 12031 12320 11409 14227 13409 11551 11711 11871 14748 13900 12009 12175 12177 14621 13781 12382 12376 12296 14439 13608 12463 12403 12625 15158 14286 12659 12808 12878 15664 14763 12925 13083 13510 16493 15544 13278 13834 13938 17090 16107 13614 14325 13642 16133 15205 13453 13763 12909 15029 14165 12737 12816 13664 15693 14791 13290 13609 14039 16497 15548 13653 14207 14265 16223 15290 13811 14109 15128 17192 16203 14554 14841 15355 17303 16308 15027 15015 15844 17480 16475 15259 15264 15941 17114 16130 15404 14948 15407 16332 15393 14991 14181 15607 16572 15620 15211 14354 17095 18124 17081 16422 16039 17992 19284 18175 17253 16748 19178 20431 19256 17978 17802 19550 20709 19518 18264 18250 20897 22084 20814 19478 19457 20259 21364 20135 18948 18616 20361 21370 20141 19157 18480 20947 21434 20202 19806 18854 20511 21293 20069 19448 18486 22228 23043 21718 20624 20170 23331 24370 22969 21462 20941 23482 24692 23272 21567 21064 22459 23109 21781 20803 19950 22447 22936 21617 20687 20008 20371 20803 19607 19067 18477 16696 16580 15627 16081 14911 17583 16948 15974 16990 15824 18351 18248 17199 17494 16558 19135 19662 18532 17968 17490 19887 20111 18954 18533 18608 19658 19634 18505 18112 18373 18058 17629 16616 16875 16718 17987 17314 16318 16737 16933 19554 18628 17557 18265 18053 20336 19270 18162 18825 18491 21569 20350 19180 19507 19544 21232 20262 19097 19045 19372 20340 19008 17915 18347 18519 19968 18901 17815 17981 18597 19505 19028 17934 17621 18551 19942 19610 18483 17713 19326 20488 20938 19734 18256 20915 19439 19826 18686 17778 20266 20318 20744 19551 18864 22980 21068 21327 20101 18953 22130 21215 21455 20221 19065 21751 20869 20912 19710 18773 21107 21468 21824 20569 19321 22355 21891 21992 20727 19965 21807 23170 23782 22415 20857 23739 23123 23963 22585 20738 23093 23236 23982 22603 20663 23239 21701 22179 20903 20242 20820 24762 24909 23477 22416 23385 26724 24839 23411 23035 24388 25596 24072 22687 23002 22900 24531 23556 22202 22634 21849 26010 25106 23663 23682 23514 26674 25973 24479 24291 23963 27695 26162 24658 25267 24840 27435 26154 24650 24701 24425 26993 25681 24204 24615 23869 23128 22653 21351 21897 20642 24185 23183 21850 22469 21742 26119 24794 23369 24085 23333 28005 26622 25091 25558 24913 28529 26792 25252 25898 25130 28406 27245 25678 26056 24697 30875 29226 27545 28005 26648 32138 29819 28104 28991 27403 30920 28802 27146 28032 26268 29538 27846 26245 27412 24910 24735 24449 23043 23339 21393 24703 24894 23462 23236 21596 22884 23196 21862 21577 20274 23344 23660 22299 21901 20923 24605 25491 24025 23648 22013 23953 24770 23345 22638 21269 22964 24042 22659 22000 20538 22114 22808 21497 21261 19880 22046 22852 21538 21488 20037 24041 24613 23198 23530 21664 26281 26654 25121 25932 23411 27062 27243 25676 26370 24019 28385 28684 27035 27686 25268 29750 29995 28270 28738 26499 28775 29692 27985 28408 25720 31338 32115 30268 30723 27950 32633 33390 31470 31903 29006 33560 34542 32556 33057 29516 12/2003 On October 13, 2003, the fund's primary benchmark was changed to the Russell 2000 Value Index. During the reporting period, the fund's benchmarks were the S&P Small Cap 600 Index and the S&P Small Cap 600/Barra Value Index. All results shown assume reinvestment of distributions. 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 S&P Small Cap 600/Barra Value Index is an unmanaged index that tracks the performance of value stocks contained in the S&P Small Cap 600 Index, as determined by the low price to book ratios. The S&P Small Cap 600 Index tracks the performance of 600 small capitalization stocks. The Russell 2000 Value measures the performance of those Russell 2000 companies with lower price-to-book ratios and lower 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. Performance of the S&P Small Cap 600/Barra Value Index is from 2/1/94. Performance prior to that time represents returns of the S&P Small Cap 600 Index and the Russell 2000 Value Index. AVERAGE ANNUAL TOTAL RETURN AS OF 12/31/03 (%)
-------------------------------------------------------------------------------------------------------- Share class A B C I Z -------------------------------------------------------------------------------------------------------- Inception 7/25/86 11/9/92 1/15/96 10/31/02 7/31/95 -------------------------------------------------------------------------------------------------------- Sales charge without with without with without with without without -------------------------------------------------------------------------------------------------------- 6-month (cumulative) 26.75 19.46 26.31 21.31 26.28 25.28 27.12 26.91 -------------------------------------------------------------------------------------------------------- 1-year 39.41 31.39 38.39 33.39 38.40 37.40 40.13 39.79 -------------------------------------------------------------------------------------------------------- 5-year 11.42 10.11 10.56 10.29 10.57 10.57 11.78 11.71 -------------------------------------------------------------------------------------------------------- 10-year 13.20 12.53 12.35 12.35 12.53 12.53 13.48 13.45 --------------------------------------------------------------------------------------------------------
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: first year - 5%, second year - 4%, third year - 3%, fourth year - 3%, fifth year - 2%, sixth year - 1%, thereafter - 0% and the class C contingent deferred sales charge of 1% for the first year only. Performance for different share classes 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. Classes C and Z share performance information includes returns of the fund's class A shares (the oldest existing fund class) for periods prior to the inception of the newer class shares. The returns for class I shares include the returns of class Z for periods prior to 11/1/02 and returns of class A prior to 7/31/95. These returns have not been adjusted to reflect any difference in expenses (such as 12b-1 fees) between any of the predecessor shares and the newer classes of shares. Had the expense differential been reflected, the returns for the periods prior to the inception of the newer class shares would have been different. 2 ECONOMIC UPDATE Columbia Small Cap Value Fund After struggling for two years to maintain solid, forward movement, the US economy steamed ahead during the six-month period ended December 31, 2003. The Federal Reserve Board's efforts to stimulate the economy through low short-term interest rates were finally rewarded, but the significant upswing in growth was the result of a combination of factors. A sizeable tax package gave disposable income a boost. Income taxes fell across all tax brackets and many taxpayers received rebate checks during the summer months. Corporate profits rose sharply, and orders for durable goods exceeded expectations late in the period. Consumer confidence continued to climb, although not without an occasional setback. Generally speaking, consumer spending increased and spending was strong going into the holiday season. Early in the period, economists began to become optimistic that growth for the third quarter of 2003 would reflect this renewed vigor. Yet, no one seemed prepared for how extraordinary that growth might be. When gross domestic product (GDP) for the third quarter was reported at 7.2%, then revised upward to 8.2%, it was clear that the economy was firing on all cylinders. The business sector had finally kicked into gear. Industrial production rose in the second half of 2003 and business spending--especially on technology-related items--showed strength. Even the labor market improved by year end. After unemployment peaked at 6.4% in June, it declined to 5.9%. The US stock market, which had come to life at the end of March, headed sharply higher in the second half of 2003. The S&P 500 Index returned 15.14% for the six-month period as all major sectors of the market benefited from renewed investor enthusiasm and rising corporate profits. Technology and consumer stocks were the strongest sectors, but telecommunications and health care also picked up in the last months of the period. The US bond market experienced extraordinary volatility as interest rates rose sharply in July as the economy improved and then came back down in September. High-yield bonds continued to lead the fixed income markets. The CSFB High Yield Index returned 9.05% for the six-month period compared to a negative 0.53% return for the Lehman Brothers Government/Credit Bond Index. Treasury and mortgage bonds suffered from the shift in interest rates early in the six-month period, but picked up some ground in the final month of the period. Municipal bonds also held onto modest gains. The Lehman Brothers Municipal Bond Index returned 1.45% for the six-month period. Money market fund yields fell below 1%, reflecting historically low short-term interest rates. The Investment Company Institute, which tracks the movement of assets in and out of mutual funds, reported that money continued to flow out of money market funds during the year as investors sought alternatives to the low yields offered by short-term cash equivalents. Net new cash flow to money market funds turned negative in 2002 for the first time since 1993. 3 Sidebar: NET ASSET VALUE PER SHARE AS OF 12/31/03 ($) -------------------------------------------------------------------------------- Class A 38.57 -------------------------------------------------------------------------------- Class B 34.52 -------------------------------------------------------------------------------- Class C 35.85 -------------------------------------------------------------------------------- Class I 39.78 -------------------------------------------------------------------------------- Class Z 39.65 -------------------------------------------------------------------------------- DISTRIBUTIONS DECLARED PER SHARE 07/01/03 - 12/31/03 ($) -------------------------------------------------------------------------------- Class A 1.18 -------------------------------------------------------------------------------- Class B 1.04 -------------------------------------------------------------------------------- Class C 1.04 -------------------------------------------------------------------------------- Class I 1.23 -------------------------------------------------------------------------------- Class Z 1.23 -------------------------------------------------------------------------------- PORTFOLIO MANAGER'S REPORT Columbia Small Cap Value Fund For the six-month period ended December 31, 2003, Columbia Small-Cap Value Fund class A shares returned 26.75% without sales charge. The fund beat the S&P Small Cap 600/Barra Value Index, which returned 23.95%, as well as the Russell 2000 Value Index, which returned 25.36%. The fund also came out ahead of the Morningstar Small Value Category, which returned 24.12% for the six-month period.(1) The fund benefited from strong stock returns in most sectors, particularly industrials. The fund's sector weightings, which included an above-average stake in the technology sector and a below-average stake in financials, also contributed positively to performance. The fund maintained its focus on companies with strong competitive and financial positions, good earnings growth prospects and reasonable stock valuations. Our strategy was rewarded during the period, as investors moved away from more speculative stocks and began buying higher-quality stocks with the potential to do well in a steadily improving economy. STRONG RETURNS FROM ECONOMICALLY-SENSITIVE INDUSTRIAL AND TECHNOLOGY SECTORS The fund's biggest gains came from industrial and technology stocks, both of which had suffered sharp declines during the recession but made strong comebacks as the economy improved. In the industrial sector, the fund benefited from strong stock selection among machinery and equipment, transportation, business services and construction stocks. Within the technology sector, the fund owned a mix of software and hardware names, including semiconductor stocks, which rallied sharply as demand grew. Many industrials and technology stocks with overseas sales also benefited from the weak US dollar. SIDESTEPPED DISAPPOINTMENTS IN FINANCIALS AND HEALTH CARE Financials and health care stocks contributed positively to performance largely because we avoided some of the weaker industries within each sector. Financials rallied nicely, but could not keep pace with the market's overall returns. We did well by avoiding thrift institutions--savings and loans and consumer savings banks--which moved out of favor with investors during the period. Instead we chose to focus on commercial banks, which benefited from low interest rates and a better credit environment, and insurers, which gained amid improved pricing. Within the health care sector, we did well by avoiding more speculative biotechnology stocks and investing in nursing homes, medical facilities and health maintenance organizations. Our returns exceeded those of the health-care stocks in our benchmarks. (1) 2004 by 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. 4 Sidebar: We believe small-cap stocks remain reasonably valued and that they have the potential to participate in any rally. Columbia Small Cap Value Fund GAINS FROM CONSUMER DISCRETIONARY STOCKS NOT AS ROBUST Stock selection in the consumer discretionary sector somewhat hampered the fund's relative returns. Consumer discretionary stocks had held up well in the economic downturn, benefiting from strong consumer spending. As a result, the sector had less upside as the market recovered. We focused on reasonably priced restaurant, clothing manufacturer and specialty retailing stocks, which did not do as well as more expensive stocks within the sector. Materials stocks benefited from rising commodities prices. Our higher quality chemicals, paper, packaging and construction materials names, however, came out somewhat behind the average return for the sector. OPTIMISTIC OUTLOOK FOR ECONOMY We expect the economy to continue to recover in 2004, further boosting stock prices. The pace of the market's gains, however, may slow as the recovery unfolds and interest rates edge higher. We believe small-cap stocks remain reasonably valued and that they have the potential to participate in any rally. We plan to maintain an economically-sensitive tilt to the portfolio, focusing on small-cap companies with strong balance sheets, market leadership positions and good earnings prospects. Photo of: Stephen Barbaro Stephen Barbaro has managed the fund since June 2002. /s/ Stephen Barbaro Investing in small-cap stocks may present special risks, including possible illiquidity and greater price volatility than stocks of larger, more established companies. 5 FINANCIAL STATEMENTS December 31, 2003 (Unaudited) Columbia Small Cap Value Fund A GUIDE TO UNDERSTANDING YOUR FUND'S FINANCIAL STATEMENTS -------------------------------------------------------- Investment Portfolio A list of all of the fund's holdings and their market value as of the last day of the reporting period. To show areas of concentration and diversification, portfolio holdings are organized by type of asset, industry and country or geographic region (if applicable). -------------------------------------------------------- Statement of Assets This statement shows the fund's net assets and share and Liabilities price for each share class. 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 outstanding shares in that class. -------------------------------------------------------- Statement of This statement details both the type of income earned by Operations the fund and the operating and non-operating expenses charged to the fund. 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 over the reporting period. The total of these results represents the fund's net increase or decrease in net assets from operations. -------------------------------------------------------- Statement of Changes This statement shows how the fund's net assets were in Net Assets affected by its operations results, distributions to shareholders and changes in the number of fund shares. The Statement of Changes in Net Assets also reconciles changes in the number of shares outstanding. -------------------------------------------------------- Financial Highlights The financial highlights provide an overview of the fund's investment results, including per-share analytics, such as net investment income or loss from operations and distributions; ratios of expenses and net investment income to average net assets. The financial highlights also detail the fund's portfolio turnover rate, which is a measure of trading activity. A separate table is provided for each share class. -------------------------------------------------------- Notes to Financial These notes disclose information regarding certain fund Statements background information, significant accounting policies of the fund, including security valuation and income accruals and related party transactions. 6 INVESTMENT PORTFOLIO December 31, 2003 (Unaudited) Columbia Small Cap Value Fund
Common Stocks - 98.7% CONSUMER DISCRETIONARY - 16.2% Shares Value ($) ------------------------------------------ ----------------------------------------------------------------------------- Auto Components - 1.1% BorgWarner, Inc. 35,000 2,977,450 Federal Signal Corp. 46,653 817,361 Modine Manufacturing Co. 54,143 1,460,778 Standard Motor Products, Inc. 123,300 1,498,095 Auto Components Total 6,753,684 ----------------------------------------------------------------------------- Hotels, Restaurants & Leisure - 3.0% Bally Total Fitness Holding Corp. (a) 227,200 1,590,400 Bob Evans Farms, Inc. 33,307 1,081,145 Buffalo Wild Wings, Inc. (a) 44,100 1,144,395 Landry's Restaurants, Inc. 118,800 3,055,536 Lone Star Steakhouse & Saloon 158,807 3,681,146 Prime Hospitality Corp. (a) 195,400 1,993,080 Scientific Games Corp., Class A (a) 215,300 3,662,253 Hotels, Restaurants & Leisure Total 16,207,955 ----------------------------------------------------------------------------- Household Durables - 1.8% American Greetings Corp. (a) 61,200 1,338,444 CSS Industries, Inc. 74,000 2,294,740 Interface, Inc., Class A (a) 245,300 1,356,509 Kimball International, Inc., Class B 159,734 2,483,864 Russ Berrie & Co, Inc. 24,600 833,940 Toro Co. 26,500 1,229,600 Household Durables Total 9,537,097 ----------------------------------------------------------------------------- Leisure Equipment & Products - 0.8% Jakks Pacific, Inc. (a) 152,488 2,006,742 Johnson Outdoors, Inc. (a) 81,821 1,227,560 M&F Worldwide Corp. (a) 63,000 841,680 Travis Boats & Motors, Inc. (a) 174,975 115,483 Leisure Equipment & Products Total 4,191,465 ----------------------------------------------------------------------------- Media - 2.5% Alliance Atlantis Communications, Inc., Class B (a) 242,092 3,708,849 Catalina Marketing Corp. (a) 105,800 2,132,928 Journal Communications, Inc., Class A 94,600 1,752,938 Liberty Corp. 67,700 3,059,363 Media General, Inc. 40,000 2,604,000 Media Total 13,258,078 ----------------------------------------------------------------------------- Multi-Line Retail - 0.6% BJ's Wholesale Club, Inc. (a) 64,100 1,471,736 ShopKo Stores, Inc. (a) 106,500 1,624,125 Multi-Line Retail Total 3,095,861 ----------------------------------------------------------------------------- Specialty Retail - 3.7% Building Material Holding Corp. 71,143 1,104,851 Compucom Systems, Inc. (a) 253,815 1,329,991 Friedman's, Inc. 165,674 1,111,673 Gadzooks, Inc. (a) 189,740 294,097 GameStop Corp., Class A (a) 116,900 1,801,429 Goody's Family Clothing, Inc. 205,281 1,921,430 Linens 'n Things, Inc. (a) 63,400 1,907,072 Monro Muffler, Inc. (a) 156,006 3,121,680 Movie Gallery, Inc. 50,678 946,665 Rent-Way, Inc. (a) 341,200 2,794,428 TBC Corp. (a) 43,221 1,115,534 United Rentals, Inc. (a) 115,100 2,216,826 Specialty Retail Total 19,665,676 -----------------------------------------------------------------------------
See notes to investment portfolio. 7 December 31, 2003 (Unaudited) Columbia Small Cap Value Fund
Common Stocks - (continued) CONSUMER DISCRETIONARY - (continued) Shares Value ($) ------------------------------------------ ------------------------------------------------------------------------------ Textiles, Apparel & Luxury Goods - 2.7% Delta Apparel, Inc. 48,000 854,880 Hampshire Group Ltd. (a) 82,100 2,575,477 Kellwood Co. 105,850 4,339,850 Maxwell Shoe Co. (a) 165,409 2,806,991 Russell Corp. 116,700 2,049,252 Stride Rite Corp. 146,300 1,664,894 Textiles, Apparel & Luxury Goods Total 14,291,344 ------------ CONSUMER DISCRETIONARY TOTAL 87,001,160 CONSUMER STAPLES - 3.1% ------------------------------------------ ------------------------------------------------------------------------------ Food & Drug Retailing - 0.8% NeighborCare, Inc. (a) 133,100 2,628,725 Winn-Dixie Stores, Inc. 163,000 1,621,850 Food & Drug Retailing Total 4,250,575 ----------------------------------------------------------------------------- Food Products - 2.1% Central Garden & Pet Co. (a) 65,390 1,832,882 Corn Products International, Inc. 117,200 4,037,540 Omega Protein Corp. (a) 165,400 1,276,888 Ralcorp Holdings, Inc. (a) 126,500 3,967,040 Food Products Total 11,114,350 ----------------------------------------------------------------------------- Tobacco - 0.2% Schweitzer-Mauduit International, Inc. 35,700 1,063,146 Tobacco Total 1,063,146 ------------ CONSUMER STAPLES TOTAL 16,428,071 ENERGY - 4.5% ------------------------------------------ ------------------------------------------------------------------------------ Energy Equipment & Services - 1.5% Lufkin Industries, Inc. 94,639 2,724,657 Universal Compression Holdings, Inc. (a) 82,700 2,163,432 Willbros Group, Inc. (a) 254,000 3,053,080 Energy Equipment & Services Total 7,941,169 ----------------------------------------------------------------------------- Oil & Gas - 3.0% Harvest Natural Resources, Inc. (a) 207,000 2,059,650 Stone Energy Corp. (a) 82,100 3,485,145 Vintage Petroleum, Inc. 234,800 2,824,644 Western Gas Resources, Inc. 42,600 2,012,850 Westport Resources Corp. (a) 121,800 3,636,948 Whiting Petroleum Corp. (a) 127,100 2,338,640 Oil & Gas Total 16,357,877 ------------ ENERGY TOTAL 24,299,046 FINANCIALS - 22.7% ------------------------------------------ ------------------------------------------------------------------------------ Banks - 11.1% BancFirst Corp. 15,050 883,465 BancorpSouth, Inc. 109,900 2,606,828 BancTrust Financial Group, Inc. 46,754 748,999 Bank of Granite Corp. 105,493 2,297,638 Bryn Mawr Bank Corp. 129,810 3,179,047 Capitol Bancorp Ltd. 47,379 1,345,564 Chemical Financial Corp. 104,880 3,816,583 Chittenden Corp. 119,900 4,033,436 Community First Bankshares, Inc. 82,900 2,399,126 Community Trust Bancorp, Inc. 64,478 1,947,224 Corus Bankshares, Inc. 111,600 3,522,096 First Citizens BancShares, Inc. 17,100 2,078,163 First Financial Bankshares, Inc. 53,700 2,239,290
8 See notes to investment portfolio. December 31, 2003 (Unaudited) Columbia Small Cap Value Fund
Common Stocks - (continued) FINANCIALS - (continued) Shares Value ($) ------------------------------------------ ----------------------------------------------------------------------------- Banks - (continued) Greater Bay Bancorp 85,000 2,420,800 Hancock Holding Co. 24,594 1,342,094 MainSource Financial Group, Inc. 42,693 1,309,394 MASSBANK Corp. 35,600 1,516,560 Merchants Bancshares, Inc. 85,032 2,597,728 MetroCorp. Bancshares, Inc. 17,800 265,042 Mid-State Bancshares 151,260 3,848,054 Northrim BanCorp., Inc. 77,700 1,783,215 Omega Financial Corp. 18,237 701,942 Riggs National Corp. 167,696 2,772,015 S.Y. Bancorp, Inc. 16,500 339,240 Simmons First National Corp. 77,872 2,172,629 Sterling Bancshares, Inc. 118,000 1,572,940 TriCo Bancshares 107,365 3,388,439 Whitney Holding Corp. 61,800 2,533,182 Banks Total 59,660,733 ----------------------------------------------------------------------------- Diversified Financials - 2.2% Cash America International, Inc. 196,500 4,161,870 LaBranche & Co, Inc. 134,900 1,574,283 Metris Companies, Inc. 323,400 1,435,896 MFC Bancorp Ltd. (a) 260,570 4,794,488 Diversified Financials Total 11,966,537 ----------------------------------------------------------------------------- Insurance - 4.1% AmerUs Group Co. 42,700 1,493,219 CNA Surety Corp. (a) 127,100 1,208,721 Commerce Group, Inc. 53,700 2,121,150 Delphi Financial Group, Inc., Class A 111,702 4,021,272 Horace Mann Educators Corp. 127,400 1,779,778 Kansas City Life Insurance Co. 12,900 595,980 Navigators Group, Inc. (a) 49,600 1,531,152 Phoenix Companies, Inc. 270,000 3,250,800 RLI Corp. 78,300 2,933,118 State Auto Financial Corp. 79,963 1,870,335 Universal American Financial Corp. (a) 110,194 1,092,022 Insurance Total 21,897,547 ----------------------------------------------------------------------------- Real Estate - 5.3% American Financial Realty Trust, REIT 51,400 876,370 Boykin Lodging Co., REIT 215,800 1,974,570 EastGroup Properties, Inc., REIT 79,500 2,574,210 Equity One, Inc., REIT 126,600 2,137,008 First Potomac Realty Trust, REIT (a) 48,000 899,520 Getty Realty Corp. 84,200 2,201,830 Gladstone Commercial Corp. 101,600 1,711,960 Keystone Property Trust, REIT 85,200 1,882,068 Mid-America Apartment Communities, Inc., REIT 83,900 2,817,362 Nationwide Health Properties, Inc., REIT 138,600 2,709,630 PS Business Parks, Inc., REIT 89,400 3,688,644 Tanger Factory Outlet Centers, Inc., REIT 30,900 1,257,630 Universal Health Reality Income Trust, REIT 56,300 1,694,630 Urstadt Biddle Properties, REIT 123,700 1,750,355 Real Estate Total 28,175,787 ------------ FINANCIALS TOTAL 121,700,604
See notes to investment portfolio. 9 December 31, 2003 (Unaudited) Columbia Small Cap Value Fund
Common Stocks - (continued) HEALTH CARE - 4.5% Shares Value ($) ------------------------------------------ ----------------------------------------------------------------------------- Health Care Equipment & Supplies - 0.3% Sola International, Inc. (a) 77,700 1,460,760 Health Care Equipment & Supplies Total 1,460,760 ----------------------------------------------------------------------------- Health Care Providers & Services - 4.2% Chronimed, Inc. (a) 170,200 1,443,296 Cross Country Healthcare, Inc. (a) 122,400 1,826,208 Genesis HealthCare Corp. (a) 66,550 1,516,009 Hooper Holmes, Inc. 144,500 893,010 Kindred Healthcare, Inc. (a) 71,300 3,706,174 MAXIMUS, Inc. (a) 42,700 1,670,851 National Healthcare Corp. (a) 400 7,960 Pediatrix Medical Group, Inc. (a) 61,300 3,377,017 Province Healthcare Co. (a) 85,300 1,364,800 Stewart Enterprises, Inc. (a) 400,896 2,277,089 US Oncology, Inc. (a) 414,198 4,456,770 Health Care Providers & Services Total 22,539,184 ------------ HEALTH CARE TOTAL 23,999,944 INDUSTRIALS - 20.0% ------------------------------------------ ----------------------------------------------------------------------------- Aerospace & Defense - 2.5% AAR Corp. (a) 179,002 2,676,080 Armor Holdings, Inc. (a) 66,600 1,752,246 Herley Industries, Inc. (a) 89,700 1,856,790 InVision Technologies, Inc. (a) 67,900 2,279,403 Ladish Co., Inc. (a) 190,038 1,541,398 Precision Castparts Corp. 73,100 3,319,471 Aerospace & Defense Total 13,425,388 ----------------------------------------------------------------------------- Air Freight & Logistics - 0.7% HUB Group, Inc., Class A (a) 21,969 473,212 Ryder System, Inc. 87,400 2,984,710 Air Freight & Logistics Total 3,457,922 ----------------------------------------------------------------------------- Airlines - 0.8% Atlantic Coast Airlines Holdings, Inc. (a) 111,406 1,102,919 MAIR Holdings, Inc. (a) 101,924 742,007 Skywest, Inc. 133,100 2,411,772 Airlines Total 4,256,698 ----------------------------------------------------------------------------- Building Products - 1.8% Hughes Supply, Inc. 51,200 2,540,544 Jacuzzi Brands, Inc. (a) 232,400 1,647,716 NCI Building Systems, Inc. (a) 97,200 2,323,080 Watsco, Inc. 147,600 3,354,948 Building Products Total 9,866,288 ----------------------------------------------------------------------------- Commercial Services & Supplies - 6.7% ActivCard Corp. (a) 206,200 1,624,856 Angelica Corp. 63,000 1,386,000 Casella Waste Systems, Inc. (a) 301,827 4,132,012 Century Business Services, Inc. (a) 335,656 1,500,382 Consolidated Graphics, Inc. (a) 125,400 3,960,132 Danka Business Systems, ADR (a) 326,600 1,437,040 Electro Rent Corp. (a) 55,081 734,781 First Consulting Group, Inc. (a) 171,103 963,310 Healthcare Services Group, Inc. 106,800 2,060,172 Imagistics International, Inc. (a) 138,600 5,197,500 Ionics, Inc. (a) 75,900 2,417,415 Lightbridge, Inc. (a) 165,178 1,503,120
10 See notes to investment portfolio. December 31, 2003 (Unaudited) Columbia Small Cap Value Fund
Common Stocks - (continued) INDUSTRIALS - (continued) Shares Value ($) ------------------------------------------ ----------------------------------------------------------------------------- Commercial Services & Supplies - (continued) MPS Group, Inc. (a) 468,950 4,384,682 NCO Group, Inc. (a) 84,900 1,933,173 RemedyTemp, Inc., Class A (a) 9,440 102,990 Sourcecorp, Inc. (a) 84,800 2,173,424 TeleTech Holdings, Inc. (a) 26,276 296,919 Commercial Services & Supplies Total 35,807,908 ----------------------------------------------------------------------------- Construction & Engineering - 1.7% Comfort Systems USA, Inc. (a) 285,200 1,562,896 EMCOR Group, Inc. (a) 40,800 1,791,120 MasTec, Inc. (a) 51,600 764,196 Quanta Services, Inc. (a) 84,700 618,310 Shaw Group, Inc. (a) 139,200 1,895,904 Washington Group International, Inc. (a) 79,700 2,707,409 Construction & Engineering Total 9,339,835 ----------------------------------------------------------------------------- Electrical Equipment - 2.0% C&D Technologies, Inc. 123,000 2,357,910 Genlyte Group, Inc. (a) 47,318 2,762,425 Tecumseh Products Co. 57,512 2,785,306 Woodward Governor Co. 46,600 2,648,278 Electrical Equipment Total 10,553,919 ----------------------------------------------------------------------------- Machinery - 2.9% Alamo Group, Inc. 59,700 911,022 Briggs & Stratton Corp. 43,600 2,938,640 Esterline Technologies Corp. (a) 123,300 3,288,411 Harsco Corp. 95,400 4,180,428 Kadant, Inc. (a) 124,500 2,695,425 UNOVA, Inc. (a) 69,500 1,595,025 Machinery Total 15,608,951 ----------------------------------------------------------------------------- Road & Rail - 0.9% Covenant Transport, Inc. (a) 96,200 1,828,762 Dollar Thrifty Automotive Group, Inc. (a) 83,800 2,173,772 U.S. Xpress Enterprises, Inc., Class A (a) 57,683 706,617 Road & Rail Total 4,709,151 ------------ INDUSTRIALS TOTAL 107,026,060 INFORMATION TECHNOLOGY - 15.0% ------------------------------------------ ----------------------------------------------------------------------------- Communications Equipment - 3.0% Advanced Fibre Communications, Inc. (a) 133,000 2,679,950 Anaren, Inc. (a) 170,700 2,410,284 Andrew Corp. (a) 201,882 2,323,662 Black Box Corp. 51,900 2,391,033 Cable Design Technologies Corp. (a) 163,100 1,466,269 McDATA Corp., Class A (a) 201,900 1,924,107 Optical Communication Products, Inc. (a) 335,968 1,243,082 Tollgrade Communications, Inc. (a) 104,410 1,830,307 Communications Equipment Total 16,268,694 ----------------------------------------------------------------------------- Computers & Peripherals - 1.4% Advanced Digital Information Corp. (a) 34,700 485,800 Electronics for Imaging, Inc. (a) 87,700 2,281,954 Imation Corp. 23,800 836,570 Innovex, Inc. (a) 161,700 1,363,131 Intergraph Corp. (a) 50,100 1,198,392 Iomega Corp. (a) 229,800 1,374,204 Computers & Peripherals Total 7,540,051 -----------------------------------------------------------------------------
See notes to investment portfolio. 11 December 31, 2003 (Unaudited) Columbia Small Cap Value Fund
Common Stocks - (continued) INFORMATION TECHNOLOGY - (continued) Shares Value ($) ------------------------------------------ ----------------------------------------------------------------------------- Electronic Equipment & Instruments - 3.5% Analogic Corp. 35,600 1,459,600 Anixter International, Inc. (a) 52,700 1,363,876 Benchmark Electronics, Inc. (a) 47,750 1,662,177 Checkpoint Systems, Inc. (a) 129,600 2,450,736 MTS Systems Corp. 141,582 2,722,622 NU Horizons Electronics Corp. (a) 215,807 2,114,909 OSI Systems, Inc. (a) 85,000 1,632,850 Planar Systems, Inc. (a) 62,600 1,522,432 Plexus Corp. (a) 65,300 1,121,201 Vishay Intertechnology, Inc. (a) 110,800 2,537,320 Electronic Equipment & Instruments Total 18,587,723 ----------------------------------------------------------------------------- Information Technology Consulting & Services - 1.5% Acxiom Corp. (a) 125,541 2,331,296 Agilysys, Inc. 104,379 1,163,826 American Management Systems, Inc. (a) 147,062 2,216,224 Computer Horizons Corp. (a) 238,061 935,580 Inforte Corp. (a) 163,100 1,352,099 Information Technology Consulting & Services Total 7,999,025 ----------------------------------------------------------------------------- Internet Software & Services - 1.3% Equinix, Inc. (a) 143,300 4,041,060 Keynote Systems, Inc. (a) 164,600 1,958,740 Modem Media, Inc. (a) 153,800 1,256,546 Internet Software & Services Total 7,256,346 ----------------------------------------------------------------------------- Semiconductor Equipment & Products - 1.3% Dupont Photomasks, Inc. (a) 93,614 2,259,842 Exar Corp. (a) 131,100 2,239,188 FSI International, Inc. (a) 134,500 992,610 Pericom Semiconductor Corp. (a) 130,645 1,392,676 Semiconductor Equipment & Products Total 6,884,316 ----------------------------------------------------------------------------- Software - 3.0% Captaris, Inc. (a) 240,000 1,348,800 Group 1 Software, Inc. (a) 122,300 2,154,926 Internet Security Systems, Inc. (a) 122,200 2,301,026 Lawson Software, Inc. (a) 162,800 1,339,844 MSC.Software Corp. (a) 210,800 1,992,060 PLATO Learning, Inc. (a) 316,186 3,335,762 Sybase, Inc. (a) 100,600 2,070,348 Transaction Systems Architects, Inc. (a) 63,300 1,432,479 Software Total 15,975,245 ------------ INFORMATION TECHNOLOGY TOTAL 80,511,400 MATERIALS - 8.0% ------------------------------------------ ----------------------------------------------------------------------------- Chemicals - 3.2% Cytec Industries, Inc. (a) 63,600 2,441,604 H.B. Fuller Co. 74,000 2,200,760 Hercules, Inc. (a) 94,800 1,156,560 Lubrizol Corp. 92,300 3,001,596 Minerals Technologies, Inc. 47,800 2,832,150 Schulman (A.), Inc. 97,444 2,077,506 Sensient Technologies Corp. 96,000 1,897,920 Stepan Co. 58,300 1,495,395 Chemicals Total 17,103,491 -----------------------------------------------------------------------------
12 See notes to investment portfolio. December 31, 2003 (Unaudited) Columbia Small Cap Value Fund
Common Stocks - (continued) MATERIALS - (continued) Shares Value ($) ------------------------------------------ ----------------------------------------------------------------------------- Construction Materials - 1.0% AMCOL International Corp. 86,900 1,764,070 Centex Construction Products, Inc. 61,500 3,706,605 Construction Materials Total 5,470,675 ----------------------------------------------------------------------------- Containers & Packaging - 1.0% AptarGroup, Inc. 56,000 2,184,000 Greif, Inc., Class A 94,100 3,341,491 Containers & Packaging Total 5,525,491 ----------------------------------------------------------------------------- Metals & Mining - 2.4% Carpenter Technology Corp. 133,200 3,938,724 Peabody Energy Corp. 149,800 6,248,158 RTI International Metals, Inc. (a) 168,700 2,845,969 Metals & Mining Total 13,032,851 ----------------------------------------------------------------------------- Paper & Forest Products - 0.4% Glatfelter 70,800 881,460 Mercer International, Inc. (a) 164,900 1,052,062 Paper & Forest Products Total 1,933,522 ------------ MATERIALS TOTAL 43,066,030 TELECOMMUNICATION SERVICES - 0.7% ------------------------------------------ ----------------------------------------------------------------------------- Diversified Telecommunication Services - 0.4% North Pittsburgh Systems, Inc. 99,613 1,883,682 Diversified Telecommunication Services Total 1,883,682 ----------------------------------------------------------------------------- Wireless Telecommunication Services - 0.3% Price Communications Corp. (a) 122,200 1,677,806 Wireless Telecommunication Services Total 1,677,806 ------------ TELECOMMUNICATION SERVICES TOTAL 3,561,488 UTILITIES - 4.0% ------------------------------------------ ----------------------------------------------------------------------------- Electric Utilities - 3.0% Central Vermont Public Service Corp. 140,600 3,304,100 CH Energy Group, Inc. 94,400 4,427,360 El Paso Electric Co. (a) 159,600 2,130,660 Maine & Maritimes Corp. 30,400 1,064,304 MGE Energy, Inc. 55,586 1,751,515 Northeast Utilities 113,300 2,285,261 Otter Tail Corp. 50,000 1,336,500 Electric Utilities Total 16,299,700 ----------------------------------------------------------------------------- Gas Utilities - 1.0% Cascade Natural Gas Corp. 60,600 1,278,054 MDU Resources Group, Inc. 57,500 1,369,075 Northwest Natural Gas Co. 45,300 1,392,975 WGL Holdings, Inc. 48,600 1,350,594 Gas Utilities Total 5,390,698 ------------ UTILITIES TOTAL 21,690,398 ------------ TOTAL COMMON STOCKS (COST OF $403,721,509) 529,284,201
See notes to investment portfolio. 13 December 31, 2003 (Unaudited) Columbia Small Cap Value Fund
Single Purpose Trust - 0.0% MATERIALS - 0.0% Shares Value ($) ------------------------------------------ ----------------------------------------------------------------------------- Paper & Forest Products - 0.0% PRT Forest Regeneration Income Fund (a) (cost of $297,727) 46,001 320,354 Paper & Forest Products Total 320,354 ------------ MATERIALS TOTAL 320,354 Short-Term Obligation - 1.3% Par($) ------------------------------------------ ----------------------------------------------------------------------------- Repurchase agreement with State Street Bank & Trust Co., dated 12/31/03, due 01/02/04 at 0.780%, collateralized by a U.S. Treasury Bond maturing 05/15/18, market value $7,002,000 (repurchase proceeds $6,864,297) (cost of $6,864,000) 6,864,000 6,864,000 Total Investments - 100.0% (cost of $410,883,236) (b) 536,468,555 Other Assets & Liabilities, Net - 0.0% (82,339) Net Assets - 100.0% 536,386,216 Notes to Investment Portfolio: (a) Non-income producing. (b) Cost for both financial statement and federal income tax purposes is the same. Acronym Name ------- ---- ADR American Depositary Receipt REIT Real Estate Investment Trust
14 See notes to financial statements. STATEMENT OF ASSETS AND LIABILITIES December 31, 2003 (Unaudited) Columbia Small Cap Value Fund
($) ------------------------------------------ ----------------------------------------------------------------------------- Assets Investments, at cost 410,883,236 Investments, at value 536,468,555 Cash 136 Receivable for: Investments sold 942,956 Fund shares sold 1,137,256 Interest 149 Dividends 423,711 Deferred Trustees' compensation plan 21,887 Other assets 72,932 ------------ Total Assets 539,067,582 ----------------------------------------------------------------------------- Liabilities Payable to custodian bank (cost of $256) 198 Expense reimbursement due to Investment Advisor 64,493 Payable for: Investments purchased 380,257 Fund shares repurchased 918,663 Investment advisory fee 373,800 Transfer agent fee 605,646 Pricing and bookkeeping fees 27,956 Merger fee 16,349 Custody fee 2,207 Distribution and service fees 259,794 Deferred Trustees' fees 21,887 Other liabilities 10,116 ------------ Total Liabilities 2,681,366 Net Assets 536,386,216 ----------------------------------------------------------------------------- Composition of Net Assets Paid-in capital 405,590,260 Overdistributed net investment income (95,016) Accumulated net realized gain 5,305,532 Net unrealized appreciation on: Investments 125,585,319 Foreign currency translations 121 Net Assets 536,386,216 ----------------------------------------------------------------------------- Class A Net assets 242,112,126 Shares outstanding 6,277,015 Net asset value per share 38.57(a) Maximum offering price per share($38.57/0.9425) 40.92(b) ----------------------------------------------------------------------------- Class B Net assets 216,314,848 Shares outstanding 6,265,695 Net asset value and offering price per share 34.52(a) ----------------------------------------------------------------------------- Class C Net assets 32,776,488 Shares outstanding 914,152 Net asset value and offering price per share 35.85(a) ----------------------------------------------------------------------------- Class I Net assets 2,546 Shares outstanding 64 Net asset value, offering and redemption price per share 39.78 ----------------------------------------------------------------------------- Class Z Net assets 45,180,208 Shares outstanding 1,139,373 Net asset value, offering and redemption price per share 39.65 (a) Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. (b) On sales of $50,000 or more the offering price is reduced.
See notes to financial statements. 15 STATEMENT OF OPERATIONS For the Six Months Ended December 31, 2003 Columbia Small Cap Value Fund (Unaudited)
($) ------------------------------------------ ----------------------------------------------------------------------------- Investment Income Dividends 4,077,516 Interest 23,268 Total Investment Income (net of foreign taxes withheld of $8,895) 4,100,784 ----------------------------------------------------------------------------- Expenses Investment advisory fee 1,905,269 Distribution fee: Class B 767,156 Class C 107,114 Service fee: Class A 265,663 Class B 255,719 Class C 35,705 Transfer agent fee 947,709 Pricing and bookkeeping fees 75,629 Trustees' fees 7,780 Custody fee 17,720 Other expenses 95,253 ------------ Total Expenses 4,480,717 Fees and expenses waived or reimbursed by Investment Advisor: Class A (33,001) Class B (33,148) Class C (4,414) Class I --(a) Class Z (3,234) Custody earnings credit (224) ------------ Net Expenses 4,406,696 ------------ Net Investment Loss (305,912) ----------------------------------------------------------------------------- Net Realized and Unrealized Net realized gain (loss) on: Gain (Loss) on Investments Investments 34,956,942 and Foreign Currency Foreign currency transactions (1,857) ------------ Net realized gain 34,955,085 Net change in unrealized appreciation/depreciation on: Investments 75,963,811 Foreign currency translations 136 ------------ Net change in unrealized appreciation/depreciation 75,963,947 ------------ Net Gain 110,919,032 ------------ Net Increase in Net Assets from Operations 110,613,120
(a) Rounds to less than $1. 16 See notes to financial statements. STATEMENT OF CHANGES IN NET ASSETS Columbia Small Cap Value Fund
(Unaudited) Six Months Ended Year Ended December 31, June 30, Increase (Decrease) in Net Assets: 2003($) 2003($) ------------------------------------------ --------------------------------------------------------------------------------- Operations: Net investment loss (305,912) (1,339,540) Net realized gain (loss) on investments and foreign currency transactions 34,955,085 (11,163,115) Net change in unrealized appreciation/depreciation on investments and foreign currency translations 75,963,947 3,793,153 Net Increase (Decrease) from Operations 110,613,120 (8,709,502) --------------------------------------------------------------------------------- Distributions Declared to Shareholders: From net realized gains: Class A (7,140,653) (17,262,144) Class B (6,385,636) (28,475,602) Class C (920,797) (3,407,918) Class I (77) -- Class Z (1,339,466) (31,120) Return of capital: Class A -- (441,172) Class B -- (727,756) Class C -- (87,097) Class Z -- (795) Total Distributions Declared to Shareholders (15,786,629) (50,433,604) --------------------------------------------------------------------------------- Share Transactions: Class A: Subscriptions 43,172,582 92,368,303 Proceeds received in connection with merger -- 25,103,297 Distributions reinvested 6,411,319 14,993,575 Redemptions (31,653,349) (77,460,669) ----------------------------- Net Increase 17,930,552 55,004,506 Class B: Subscriptions 8,626,778 22,179,249 Proceeds received in connection with merger -- 112,583 Distributions reinvested 5,644,623 25,322,455 Redemptions (27,177,346) (50,728,910) ----------------------------- Net Decrease (12,905,945) (3,114,623) Class C: Subscriptions 4,241,437 7,973,792 Proceeds received in connection with merger -- 15,456 Distributions reinvested 752,490 2,749,843 Redemptions (3,080,714) (7,852,369) ----------------------------- Net Increase 1,913,213 2,886,722 Class I: Subscriptions 1,050 1,000 Proceeds received in connection with merger -- 1,408,563 Distributions reinvested 77 -- Redemptions -- (1,358,005) ----------------------------- Net Increase 1,127 51,558
See notes to financial statements. 17 STATEMENT OF CHANGES IN NET ASSETS (continued) Columbia Small Cap Value Fund
(Unaudited) Six Months Ended Year Ended December 31, June 30, 2003($) 2003($) ------------------------------------------ ------------------------------------------------------------------------------------ Share Transactions (continued): Class Z: Subscriptions 33,157,792 27,400,365 Proceeds received in connection with merger -- 720 Distributions reinvested 693,082 31,915 Redemptions (6,622,629) (16,882,639) ---------------------------- Net Increase 27,228,245 10,550,361 Net Increase from Share Transactions 34,167,192 65,378,524 Total Increase in Net Assets 128,993,683 6,235,418 ------------------------------------------------------------------------------------ Net Assets: Beginning of period 407,392,533 401,157,115 End of period (including overdistributed net investment income of $(95,016) and undistributed net investment income of $210,896, respectively) 536,386,216 407,392,533 ------------------------------------------------------------------------------------ Changes in Shares: Class A: Subscriptions 1,230,093 3,154,270 Issued in connection with merger -- 902,337 Issued for distributions reinvested 171,197 550,829 Redemptions (902,672) (2,626,500) ---------------------------- Net Increase 498,618 1,980,936 Class B: Subscriptions 269,948 826,123 Issued in connection with merger -- 4,484 Issued for distributions reinvested 168,345 1,030,619 Redemptions (852,614) (1,894,962) ---------------------------- Net Decrease (414,321) (33,736) Class C: Subscriptions 125,208 279,298 Issued in connection with merger -- 594 Issued for distributions reinvested 21,611 107,881 Redemptions (94,065) (277,391) ---------------------------- Net Increase 52,754 110,382 Class: I Subscriptions 26 36 Issued in connection with merger -- 49,371 Issued for distributions reinvested 2 -- Redemptions -- (49,371) ---------------------------- Net Increase 28 36 Class: Z Subscriptions 916,961 998,716 Issued in connection with merger -- 25 Issued for distributions reinvested 18,002 1,145 Redemptions (185,073) (617,673) ---------------------------- Net Increase 749,890 382,213
18 See notes to financial statements. NOTES TO FINANCIAL STATEMENTS December 31, 2003 (Unaudited) Columbia Small Cap Value Fund NOTE 1. ORGANIZATION Columbia Small Cap Value Fund (the "Fund"), a series of Columbia Funds Trust VI (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 GOAL The Fund seeks long-term growth by investing primarily in smaller capitalization equity securities. FUND SHARES The Fund may issue an unlimited number of shares and offers five classes of shares: Class A, Class B, Class C, Class I 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 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 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 I and Class Z shares are offered continuously at net asset value. There are certain restrictions on the purchase of Class I and Class Z shares, as described in each Fund's prospectus. Effective October 13, 2003, the Fund changed its name from Liberty Small-Cap Value Fund to Columbia Small Cap Value Fund. Also on that date, the Trust changed its name from Liberty Funds Trust VI to Columbia Funds Trust VI. 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 obligations maturing within 60 days are valued at amortized cost, which approximates market value. Investments for which market quotations are not readily available 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 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. 19 December 31, 2003 (Unaudited) Columbia Small Cap Value Fund INCOME RECOGNITION Interest income is recorded on the accrual basis. Corporate actions and dividend income are recorded on the ex-date except for foreign securities which are recorded as soon after ex-date as the Fund becomes aware of such, net of non-reclaimable tax withholdings. Awards from class action litigation are recorded as a reduction of cost if the Fund still owns the applicable securities on the payment date. If the Fund no longer owns the applicable securities, the proceeds are recorded as realized gains. 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. The Fund does 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 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 or tax-exempt 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. Income and capital gains dividends are determined in accordance with income tax regulations which may differ from GAAP. NOTE 3. FEDERAL TAX INFORMATION The timing and character of income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. Reclassifications are made to the Fund's capital accounts for permanent tax differences to reflect income and gains available for distribution (or available capital loss carryforwards) under income tax regulations. The tax character of distributions paid during the year ended June 30, 2003 was as follows: Distributions paid from: Ordinary income $ -- Long-term capital gains 49,176,784 Return of capital 1,256,820 -------------------------------------------------------------------------------- $50,433,604 As of June 30, 2003, the components of distributable earnings on a tax basis were as follows: Unrealized Appreciation* -------------------------------------------------------------------------------- $47,765,128 * The difference between book-basis and tax-basis unrealized appreciation is attributable primarily to the tax deferral of losses on wash sales and REIT adjustments. Unrealized appreciation and depreciation at December 31, 2003, based on cost of investments for federal income tax purposes was: Unrealized appreciation $132,124,987 Unrealized depreciation (6,539,668) -------------------------------------------------------------------------------- Net unrealized appreciation $125,585,319 The following capital loss carryforwards, determined as of June 30, 2003, are available to reduce taxable income arising from future net realized gains on 20 December 31, 2003 (Unaudited) Columbia Small Cap Value Fund investments, if any, to the extent permitted by the Internal Revenue Code: -------------------------------------------------------------------------------- Year of Capital Loss Expiration Carryforward -------------------------------------------------------------------------------- 2005* $2,466,892 -------------------------------------------------------------------------------- 2006* 1,233,446 -------------------------------------------------------------------------------- 2007* 1,233,446 -------------------------------------------------------------------------------- 2009* 2,466,892 -------------------------------------------------------------------------------- 2011 2,466,892 -------------------------------------------------------------------------------- $9,867,568 -------------------------------------------------------------------------------- * Any capital loss carryforwards acquired as part of a merger that are permanently lost due to provisions under the Internal Revenue Code are included as being expired. Expired capital loss carryforwards 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"), an indirect, wholly owned subsidiary of FleetBoston Financial Corporation, is the investment advisor to the Fund. Columbia provides administrative and other services and receives a monthly fee based on the Fund's average daily net assets at the following annual rates: -------------------------------------------------------------------------------- Average Daily Net Assets Annual Fee Rate -------------------------------------------------------------------------------- First $500 million 0.80% -------------------------------------------------------------------------------- Next $500 million 0.75% -------------------------------------------------------------------------------- Over $1 billion 0.70% -------------------------------------------------------------------------------- Prior to November 1, 2003, Columbia was entitled to receive a monthly investment advisory fee based on the Fund's average daily net assets at the following annual rates: -------------------------------------------------------------------------------- Average Daily Net Assets Annual Fee Rate -------------------------------------------------------------------------------- First $1 billion 0.80% -------------------------------------------------------------------------------- Over $1 billion 0.75% -------------------------------------------------------------------------------- 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 December 31, 2003, the annualized effective pricing and bookkeeping fee rate was 0.032%. TRANSFER AGENT FEE Columbia Funds Services, Inc. (the "Transfer Agent"), an affiliate of Columbia, provides shareholder services for an annual fee by class 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 the Fund's average daily net assets attributable to Class A, Class B, Class C and Class Z shares and 0.0025% of the Fund's average daily net assets attributable to Class I shares. The Transfer Agent also received flat-rate charges based on the number of shareholder accounts and transactions, in addition to reimbursement for certain out-of-pocket expenses. For the six months ended December 31, 2003, the annualized effective transfer agent fee rate, exclusive of out-of-pocket expenses, was 0.27%. Effective October 13, 2003, Liberty Funds Services, Inc. changed its name to Columbia Funds Services, Inc. UNDERWRITING DISCOUNTS, SERVICE AND DISTRIBUTION FEES Columbia Funds Distributor, Inc. (the "Distributor"), an affiliate of Columbia, is the principal underwriter of the Fund. Prior to October 13, 2003, Columbia Funds Distributor, Inc. was known as Liberty Funds Distributor, Inc. For the six months ended December 31, 2003, the Distributor has retained net underwriting discounts of $16,716 on sales of the Fund's Class A shares and received CDSC of $8,743, $122,764 and $1,505 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 21 December 31, 2003 (Unaudited) Columbia Small Cap Value Fund daily net assets of the Fund attributable to Class A, Class B and Class C shares. The Plan also requires the payment of a monthly distribution fee to the Distributor at the annual rate of 0.75% of the average daily net assets attributable to Class B and Class C shares only. The CDSC and the fees received from the Plan are used principally as repayment to the Distributor for amounts paid by the Distributor to dealers who sold such shares. FEE WAIVERS Columbia has voluntarily agreed to reimburse the Fund for certain expenses so that the total annual Fund operating expenses (exclusive of distribution and service fees, brokerage commissions, interest, taxes and extraordinary expenses, if any) will not exceed 1.25% annually of the Fund's average daily net assets. Prior to November 1, 2003, Columbia voluntarily agreed to reimburse the Fund for certain expenses so that the total annual Fund operating expenses (exclusive of distribution, service and transfer agent fees, brokerage commissions, interest, taxes and extraordinary expenses, if any) would not exceed 1.00% annually of the Fund's average daily net assets. Columbia had also voluntarily agreed to reimburse the Fund so that Class A, Class B, Class C and Class Z transfer agent fees (excluding out-of-pocket fees) did not exceed 0.25% annually of each class's average daily net assets. 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 Purchases and Sales of Securities For the six months ended December 31, 2003, the cost of purchases and proceeds from sales of securities, excluding short-term obligations, were $143,574,498 and $124,883,890, 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 December 31, 2003, the Fund did not borrow under these arrangements. 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 authorities, including the Securities and Exchange Commission ("SEC") and the New York Attorney General, 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 was knowingly involved in late trading of mutual fund shares. The Columbia Group has identified a limited number of investors who had informal arrangements for trading certain Columbia Fund shares between 1998 and 2003. A substantial majority of the trading had ended by October 2002. None of these arrangements exists today. Information relating to those trading arrangements has been supplied to various regulatory authorities. To the extent that any Columbia Fund, whose shares were involved in those trading activities, 22 December 31, 2003 (Unaudited) Columbia Small Cap Value Fund was harmed by them, the Columbia Group has undertaken to reimburse such fund. The SEC staff has issued notices to the effect that it has made a preliminary determination to recommend that the SEC bring civil enforcement actions, including injunctive proceedings, against Columbia and the Distributor, alleging that they have violated certain provisions of the federal securities laws. The Columbia Group believes that those allegations are based principally on the trading arrangements referred to above. Columbia and the Distributor are engaged in discussions with the SEC staff in an effort to reach a satisfactory resolution of these matters. However, there can be no assurance that such a resolution will be reached. Any potential resolution of these matters may include, but not be limited to, sanctions, financial penalties, damages or injunctions regarding Columbia or the Distributor, and structural changes in the conduct of their business. Although the Columbia Group does not believe that these regulatory developments or their resolution will have a material adverse effect on the Columbia Funds, or on the ability of Columbia and the Distributor to provide services to the Columbia Funds, there can be no assurance that these matters or any adverse publicity or other developments resulting from them will not result in increased redemptions or reduced sales of Columbia Fund shares, which could increase transaction costs or operating expenses, or other consequences for the Columbia Funds. NOTE 8. BUSINESS COMBINATIONS AND MERGERS FUND MERGERS As of the end of business on November 1, 2002, the Liberty Contrarian Small-Cap Fund merged into the Fund as follows: -------------------------------------------------------------------------------- Shares Net Assets Unrealized Issued Received Depreciation(1) -------------------------------------------------------------------------------- 956,811 $26,640,619 $(11,030,471) -------------------------------------------------------------------------------- Net Assets of Net Assets Net Assets Liberty Contrarian of the Fund of the Fund Small-Cap Fund Immediately Prior to Immediately Prior After Combination to Combination Combination -------------------------------------------------------------------------------- $333,518,938 $26,640,619 $360,159,557 (1) Unrealized depreciation is included in the Net Assets Received amount above. 23 FINANCIAL HIGHLIGHTS Columbia Small Cap Value Fund Selected data for a share outstanding throughout each period is as follows:
(Unaudited) Six Months Ended Year Ended June 30, December 31, ------------------------------------------------------------------- Class A Shares 2003 2003 2002 2001 2000 1999 --------------------------------------------------------------------------------------------------------------------------------- Net Asset Value, Beginning of Period $ 31.39 $ 37.54 $ 37.49 $ 32.56 $ 30.36 $ 34.21 --------------------------------------------------------------------------------------------------------------------------------- Income from Investment Operations: Net investment income (loss) (a) 0.04 0.02 (0.20) (0.06) (0.10) (0.16) Net realized and unrealized gain (loss) on investments and foreign currency 8.32 (1.54) 2.42 6.38 2.30 (3.69) ----------- --------- --------- --------- --------- --------- Total from Investment Operations 8.36 (1.52) 2.22 6.32 2.20 (3.85) --------------------------------------------------------------------------------------------------------------------------------- Less Distributions Declared to Shareholders: From net realized gains (1.18) (4.51) (2.17) (1.39) -- -- Return of capital -- (0.12) -- -- -- -- ----------- --------- --------- --------- --------- --------- Total Distributions Declared to Shareholders (1.18) (4.63) (2.17) (1.39) -- -- --------------------------------------------------------------------------------------------------------------------------------- Net Asset Value, End of Period $ 38.57 $ 31.39 $ 37.54 $ 37.49 $ 32.56 $ 30.36 Total return (b) 26.75%(c)(d) (2.16)%(c) 6.43% 19.86% 7.25% (11.25)% --------------------------------------------------------------------------------------------------------------------------------- Ratios to Average Net Assets/Supplemental Data: Operating expenses (e) 1.49%(f) 1.54% 1.57% 1.58% 1.49% 1.49% Interest expense -- --%(g) -- -- -- -- Total expenses (e) 1.49%(f) 1.54% 1.57% 1.58% 1.49% 1.49% Net investment income (loss) (e) 0.22%(f) 0.07% (0.55)% (0.18)% (0.33)% (0.57)% Waiver/reimbursement 0.03%(f) 0.12% -- -- -- -- Portfolio turnover rate 27%(d) 118% 77% 29% 77% 53% Net assets, end of period (000's) $ 242,112 $ 181,377 $ 142,551 $ 137,042 $ 138,969 $ 263,436 ---------------------------------------------------------------------------------------------------------------------------------
(a) Per share data was calculated using average shares outstanding during the period. (b) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (c) Had the Investment Advisor not waived or reimbursed a portion of expenses, total return would have been reduced. (d) Not annualized. (e) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (f) Annualized. (g) Rounds to less than 0.01%. 24 Columbia Small Cap Value Fund Selected data for a share outstanding throughout each period is as follows:
(Unaudited) Six Months Ended Year Ended June 30, December 31, ------------------------------------------------------------------- Class B Shares 2003 2003 2002 2001 2000 1999 --------------------------------------------------------------------------------------------------------------------------------- Net Asset Value, Beginning of Period $ 28.18 $ 34.50 $ 34.88 $ 30.64 $ 28.78 $ 32.67 --------------------------------------------------------------------------------------------------------------------------------- Income from Investment Operations: Net investment loss (a) (0.09) (0.19) (0.44) (0.31) (0.31) (0.36) Net realized and unrealized gain (loss) on investments and foreign currency 7.47 (1.50) 2.23 5.94 2.17 (3.53) ----------- --------- --------- --------- --------- --------- Total from Investment Operations 7.38 (1.69) 1.79 5.63 1.86 (3.89) --------------------------------------------------------------------------------------------------------------------------------- Less Distributions Declared to Shareholders: From net realized gains (1.04) (4.51) (2.17) (1.39) -- -- Return of capital -- (0.12) -- -- -- -- ----------- --------- --------- --------- --------- --------- Total Distributions Declared to Shareholders (1.04) (4.63) (2.17) (1.39) -- -- --------------------------------------------------------------------------------------------------------------------------------- Net Asset Value, End of Period $ 34.52 $ 28.18 $ 34.50 $ 34.88 $ 30.64 $ 28.78 Total return (b) 26.31%(c)(d) (2.93)%(c) 5.65% 18.83% 6.46% (11.91)% --------------------------------------------------------------------------------------------------------------------------------- Ratios to Average Net Assets/Supplemental Data: Operating expenses (e) 2.24%(f) 2.30% 2.32% 2.33% 2.24% 2.24% Interest expense -- --%(g) -- -- -- -- Total expenses (e) 2.24%(f) 2.30% 2.32% 2.33% 2.24% 2.24% Net investment loss (e) (0.54)%(f) (0.71)% (1.30)% (0.93)% (1.08)% (1.32)% Waiver/reimbursement 0.03%(f) 0.09% -- -- -- -- Portfolio turnover rate 27%(d) 118% 77% 29% 77% 53% Net assets, end of period (000's) $ 216,315 $ 188,270 $ 231,602 $ 240,252 $ 238,607 $ 307,252 ---------------------------------------------------------------------------------------------------------------------------------
(a) Per share data was calculated using average shares outstanding during the period. (b) Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge. (c) Had the Investment Advisor not waived or reimbursed a portion of expenses, total return would have been reduced. (d) Not annualized. (e) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (f) Annualized. (g) Rounds to less than 0.01%. 25 Columbia Small Cap Value Fund Selected data for a share outstanding throughout each period is as follows:
(Unaudited) Six Months Ended Year Ended June 30, December 31, --------------------------------------------------------------- Class C Shares 2003 2003 2002 2001 2000 1999 ------------------------------------------------------------------------------------------------------------------------------- Net Asset Value, Beginning of Period $ 29.24 $ 35.59 $ 35.91 $ 31.50 $ 29.59 $ 33.59 ------------------------------------------------------------------------------------------------------------------------------- Income from Investment Operations: Net investment loss (a) (0.09) (0.19) (0.45) (0.31) (0.32) (0.37) Net realized and unrealized gain (loss) on investments and foreign currency 7.74 (1.53) 2.30 6.11 2.23 (3.63) ---------- --------- -------- -------- -------- -------- Total from Investment Operations 7.65 (1.72) 1.85 5.80 1.91 (4.00) ------------------------------------------------------------------------------------------------------------------------------- Less Distributions Declared to Shareholders: From net realized gains (1.04) (4.51) (2.17) (1.39) -- -- Return of capital -- (0.12) -- -- -- -- ---------- --------- -------- -------- -------- -------- Total Distributions Declared to Shareholders (1.04) (4.63) (2.17) (1.39) -- -- ------------------------------------------------------------------------------------------------------------------------------- Net Asset Value, End of Period $ 35.85 $ 29.24 $ 35.59 $ 35.91 $ 31.50 $ 29.59 Total return (b) 26.28%(c)(d) (2.92)%(c) 5.66% 18.85% 6.45% (11.91)% ------------------------------------------------------------------------------------------------------------------------------- Ratios to Average Net Assets/Supplemental Data: Operating expenses (e) 2.24%(f) 2.30% 2.32% 2.33% 2.24% 2.24% Interest expense -- --%(g) -- -- -- -- Total expenses (e) 2.24%(f) 2.30% 2.32% 2.33% 2.24% 2.24% Net investment loss (e) (0.54)%(f) (0.71)% (1.30)% (0.93)% (1.08)% (1.32)% Waiver/reimbursement 0.03%(f) 0.10% -- -- -- -- Portfolio turnover rate 27%(d) 118% 77% 29% 77% 53% Net assets, end of period (000's) $ 32,776 $ 25,186 $ 26,726 $ 27,886 $ 27,400 $ 35,987 -------------------------------------------------------------------------------------------------------------------------------
(a) Per share data was calculated using average shares outstanding during the period. (b) Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge. (c) Had the Investment Advisor not waived or reimbursed a portion of expenses, total return would have been reduced. (d) Not annualized. (e) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (f) Annualized. (g) Rounds to less than 0.01%. 26 Columbia Small Cap Value Fund Selected data for a share outstanding throughout each period is as follows:
(Unaudited) Six Months Period Ended Ended December 31, June 30, Class I Shares 2003 2003 (a) ------------------------------------------------------------------------------------------------------ Net Asset Value, Beginning of Period $ 32.29 $ 27.95 ------------------------------------------------------------------------------------------------------ Income from Investment Operations: Net investment income (b) 0.08 0.13 Net realized and unrealized gain on investments and foreign currency 8.64 4.21 ------- ------- Total from Investment Operations 8.72 4.34 ------------------------------------------------------------------------------------------------------ Less Distributions Declared to Shareholders: From net realized gains (1.23) -- ------------------------------------------------------------------------------------------------------ Net Asset Value, End of Period $ 39.78 $ 32.29 Total return (c)(d)(e) 27.12% 15.53% ------------------------------------------------------------------------------------------------------ Ratios to Average Net Assets/Supplemental Data: Operating expenses (f)(g) 1.02% 1.03% Interest expense (g) -- --%(h) Total expenses (f)(g) 1.02% 1.03% Net investment income (f)(g) 0.66% 0.64% Waiver/reimbursement (g) 0.03% 0.04% Portfolio turnover rate 27%(e) 118% Net assets, end of period (000's) $ 3 $ 1 ------------------------------------------------------------------------------------------------------
(a) Class I shares were initially offered on October 31, 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 all distributions reinvested. (d) Had the Investment Advisor not waived or reimbursed a portion of expenses, total return would have been reduced. (e) Not annualized. (f) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (g) Annualized. (h) Rounds to less than 0.01%. 27 Columbia Small Cap Value Fund Selected data for a share outstanding throughout each period is as follows:
(Unaudited) Six Months Ended Year Ended June 30, December 31, ------------------------------------------------------------------- Class Z Shares 2003 2003 2002 2001 2000 1999 ---------------------------------------------------------------------------------------------------------------------------------- Net Asset Value, Beginning of Period $ 32.24 $ 38.28 $ 38.09 $ 33.01 $ 30.70 $ 34.49 ---------------------------------------------------------------------------------------------------------------------------------- Income from Investment Operations: Net investment income (loss) (a) 0.11 0.24 (0.12) 0.02 (0.02) (0.09) Net realized and unrealized gain (loss) on investments and foreign currency 8.53 (1.65) 2.48 6.45 2.33 (3.70) ---------- ---------- -------- -------- -------- -------- Total from Investment Operations 8.64 (1.41) 2.36 6.47 2.31 (3.79) ---------------------------------------------------------------------------------------------------------------------------------- Less Distributions Declared to Shareholders: From net realized gains (1.23) (4.51) (2.17) (1.39) -- -- Return of capital -- (0.12) -- -- -- -- ---------- ---------- -------- -------- -------- -------- Total Distributions Declared to Shareholders (1.23) (4.63) (2.17) (1.39) -- -- ---------------------------------------------------------------------------------------------------------------------------------- Net Asset Value, End of Period $ 39.65 $ 32.24 $ 38.28 $ 38.09 $ 33.01 $ 30.70 Total return (b) 26.91%(c)(d) (1.79)%(c) 6.71% 20.05% 7.52% (10.99)% ---------------------------------------------------------------------------------------------------------------------------------- Ratios to Average Net Assets/Supplemental Data: Operating expenses (e) 1.24%(f) 1.25% 1.32% 1.33% 1.24% 1.24% Interest expense -- --%(g) -- -- -- -- Total expenses (e) 1.24%(f) 1.25% 1.32% 1.33% 1.24% 1.24% Net investment income (loss) (e) 0.58%(f) 0.82% (0.30)% 0.07% (0.08)% (0.32)% Waiver/reimbursement 0.03%(f) 0.38% -- -- -- -- Portfolio turnover rate 27%(d) 118% 77% 29% 77% 53% Net assets, end of period (000's) $ 45,180 $ 12,558 $ 278 $ 21 $ 11,431 $ 11,654 ----------------------------------------------------------------------------------------------------------------------------------
(a) Per share data was calculated using average shares outstanding during the period. (b) Total return at net asset value assuming all distributions reinvested. (c) Had the Investment Advisor not waived or reimbursed a portion of expenses, total return would have been reduced. (d) Not annualized. (e) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (f) Annualized. (g) Rounds to less than 0.01%. 28 IMPORTANT INFORMATION ABOUT THIS REPORT Columbia Small Cap Value 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 02111 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 Small Cap Value 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. 29 COLUMBIA FUNDS Columbia Small Cap Value 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 30 Columbia Small Cap Value 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 Funds Columbia Large Company Index Columbia Small Company Index Columbia U.S. Treasury Index Columbia funds are offered only by prospectus. Please see your financial advisor for a prospectus, which describes in detail fund objectives, investment policies, risks, sales charges, fees, liquidity and other matters of interest. Please read the prospectus carefully before you invest or send money. 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 to Columbia Funds Distributor, Inc. 31 This page intentionally left blank. This page intentionally left blank. Photo of: Hands on keyboard. 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 Small Cap Value Fund Semiannual Report, December 31, 2003 PRSRT STD U.S. Postage PAID Holliston, MA Permit NO. 20 [LOGO] ColumbiaFunds 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 769-03/736Q-1203 (02/04) 04/0175 ITEM 2. CODE OF ETHICS. Note applicable at this time. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. Note applicable at this time. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Note applicable at this time. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable. ITEM 6. RESERVED. 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. Not applicable at this time. ITEM 10. CONTROLS AND PROCEDURES. (a) The registrant's principal executive officer and principal financial officer, based on their evaluation of the registrant's disclosure controls and procedures as of a date within 90 days of the filing of this report, have concluded that such controls and procedures are adequately designed to ensure that information required to be disclosed by the registrant in Form N-CSR is accumulated and communicated to the registrant's management, including the principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. (b) There were no changes in the registrant's internal control over financial reporting that occurred during the registrant's 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 VI ------------------------------------------------------------------ By (Signature and Title) /s/ J. Kevin Connaughton ------------------------------------------------------ J. Kevin Connaughton, President and Treasurer Date March 4, 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 March 4, 2004 --------------------------------------------------------------------------