COLUMBIA FUNDS SERIES TRUST (Form: 485APOS, Received: 05/28/2010 16:07:01)

(Value of assets of the share class)

— (Liabilities of the share class)

Number of outstanding shares of the class

As filed with the Securities and Exchange Commission on May 28, 2010

Registration No. 333-89661; 811-09645

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM N-1A

REGISTRATION STATEMENT *UNDER* *THE SECURITIES ACT OF 1933*		x

Pre-Effective Amendment No.		¨

Post-Effective Amendment No. 82		x

REGISTRATION STATEMENT *UNDER* *THE INVESTMENT COMPANY ACT OF 1940*		x

Amendment No. 83

(Check appropriate box or boxes)

COLUMBIA FUNDS SERIES TRUST

(Exact Name of Registrant as specified in Charter)

One Financial Center

Boston, MA 02111

(Address of Principal Executive Offices, including Zip Code)

Registrant’s Telephone Number, including Area Code: (800) 321-7854

Scott R. Plummer

c/o Columbia Management Investment Advisers, LLC

100 Federal Street

Boston, MA 02110

(Name and Address of Agent for Service)

With copies to:

Robert M. Kurucza, Esq.

Marco E. Adelfio, Esq.

Goodwin Procter LLP

901 New York Avenue, NW

Washington, DC 20001

It is proposed that this filing will become effective (check appropriate box):

¨	Immediately upon filing pursuant to paragraph (b)

¨	on (date) pursuant to paragraph (b)

¨	60 days after filing pursuant to paragraph (a)(1)

x	on July 29, 2010 pursuant to paragraph (a)(1)

¨	75 days after filing pursuant to paragraph (a)(2))

¨	on (date) pursuant to paragraph (a)(2) of Rule 485.

If appropriate, check the following box:

¨	this post-effective amendment designates a new effective date for a previously filed post-effective amendment.

This Post-Effective Amendment relates solely to the Registrant’s Columbia California Intermediate Municipal Bond Fund, Columbia Georgia Intermediate Municipal Bond Fund, Columbia Maryland Intermediate Municipal Bond Fund, Columbia North Carolina Intermediate Municipal Bond Fund, Columbia South Carolina Intermediate Municipal Bond Fund, Columbia Virginia Intermediate Municipal Bond Fund, Corporate Bond Portfolio, Mortgage- and Asset-Backed Portfolio, Columbia Short Term Bond Fund, Columbia Short Term Municipal Bond Fund, Columbia Total Return Bond Fund and Columbia High Income Fund. Information contained in the Registrant’s Registration Statement relating to any other series of the Registrant is neither amended nor superseded hereby.

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Prospectus

August 1, 2010

Columbia Funds

Corporate Bond Portfolio

Ticker symbol

Shares NCOBX

The Securities and Exchange Commission (SEC) has not approved or disapproved these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

Table of Contents



Corporate Bond Portfolio		3

Investment Objective		3

Fees and Expenses of the Portfolio		3

Principal Investment Strategies		5

Principal Risks		5

Performance Information		9

Investment Adviser and Portfolio Manager(s)		10

Purchase and Sale of Portfolio Shares		10

Tax Information		10

Payments to Broker-Dealers and Other Financial Intermediaries		10

Additional Investment Strategies and Policies		11

Management of the Portfolio		13

Primary Service Providers		13

Other Roles and Relationships of Ameriprise Financial and its Affiliates—Certain Conflicts of Interest		15

Certain Legal Matters		16

About the Portfolio’s Shares		17

Description of the Share Class		17

Financial Intermediary Compensation		18

Buying and Selling Shares		19

Share Price Determination		19

Transaction Rules and Policies		20

Opening an Account and Placing Orders		24

Distributions and Taxes		25

Financial Highlights		28

Hypothetical Fees and Expenses		29

Icons Guide


		Investment Objective

		Fees and Expenses of the Portfolio

		Principal Investment Strategies

		Principal Risks

		Performance Information

		Other Roles and Relationships of Ameriprise Financial and its Affiliates - Certain Conflicts of Interest

Corporate Bond Portfolio

Investment Objective

The Portfolio seeks total return, consisting of current income and capital appreciation.

Fees and Expenses of the Portfolio

The fee table below describes the fees and expenses that you may pay if you buy and hold Shares of the Portfolio. Additional hypothetical fee and expense information relating to Shares of the Portfolio can be found in Hypothetical Fees and Expenses . This fee table reflects the fact that no fees or expenses are charged to the Portfolio. Participants in the wrap fee programs eligible to invest in the Portfolio, however, pay an asset-based fee, which is negotiable, for investment services, brokerage services and investment consultation. Consult your wrap program documents for information regarding fees charged to the Portfolio. The Portfolio may incur significant transaction costs that are in addition to the wrap fees paid to the program sponsor described in this fee table.

Shareholder Fees (fees paid directly from your investment)


		Shares
Maximum sales charge (load) imposed on purchases, as a % of offering price		N/A
Maximum deferred sales charge (load) imposed on redemptions, as a % of the lower of the original purchase price or net asset value		N/A

Annual Portfolio Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)


	Shares
Management fees	0.00	%
Distribution and/or service (Rule 12b-1) fees	0.00	%
Other expenses	0.00	%
Acquired fund fees and expenses	—
Total annual Portfolio operating expenses	0.00	%

Example

The following example is intended to help you compare the cost of investing in the Portfolio with the cost of investing in other mutual funds.

The example illustrates the hypothetical expenses that you would incur over the time periods indicated, and assumes that:

•

you invest $10,000 in Shares of the Portfolio for the periods indicated,

•

your investment has a 5% return each year, and

•

the Portfolio’s total annual operating expenses remain the same as shown in the table above.

Based on the assumptions listed above, your costs would be:


	1 year		3 years		5 years		10 years
Shares	$	0	$	0	$	0	$	0

Remember this is an example only. Your actual costs may be higher or lower.

Portfolio Turnover

The Portfolio pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Portfolio shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Portfolio’s performance. During the most recent fiscal year, the Portfolio’s portfolio turnover rate was [X]% of the average value of its portfolio.

Principal Investment Strategies

Under normal circumstances, the Portfolio invests at least 80% of its net assets in corporate debt securities (rated BBB or better by Standard & Poor’s (S&P)), including asset-backed securities and dollar denominated foreign securities. The Portfolio may invest up to 20% of its net assets in U.S. Treasury obligations or other U.S. Government obligations, preferred stocks and convertible securities. The Portfolio also may invest in unrated securities determined by Columbia Management Investment Advisers, LLC, the Fund’s investment adviser (the Adviser), to be of comparable quality to investment grade securities at the time of purchase. Under normal circumstances, the Portfolio’s dollar-weighted average maturity will be between five and fifteen years and its duration will be between four and seven years.

The Portfolio may invest in derivatives, including futures, forwards, options, swap contracts and other derivative instruments. The Portfolio may invest in derivatives for both hedging and non-hedging purposes, including, for example, to seek to enhance returns or as a substitute for a position in an underlying asset. The Portfolio may also invest in private placements.

The Portfolio may also participate in mortgage dollar rolls up to the Portfolio’s then current position in mortgage-backed securities.

The Adviser evaluates a number of factors in identifying investment opportunities and constructing the Portfolio’s portfolio. The Adviser considers local, national and global economic conditions, market conditions, interest rate movements, and other relevant factors to determine the allocation of the Portfolio’s assets among different issuers, industry sectors and maturities.

The Adviser, in connection with selecting individual investments for the Portfolio, evaluates a security based on its potential to generate income and/or capital appreciation. The Adviser considers, among other factors, the creditworthiness of the issuer of the security and the various features of the security, such as its interest rate, yield, maturity, any call features and value relative to other securities.

The Adviser may sell a security if the Adviser believes that there is deterioration in the issuer’s financial circumstances, or that other investments are more attractive; if there is deterioration in a security’s credit rating; or for other reasons.

The Portfolio’s investment strategy may involve the frequent trading of portfolio securities. This may cause the Portfolio to incur higher transaction costs (which may adversely affect the Portfolio’s performance) and may increase taxable distributions for shareholders.

Principal Risks

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Investment Strategy Risk – The Adviser uses the principal investment strategies and other investment strategies to seek to achieve the Portfolio’s investment objective. There is no assurance that the Portfolio will achieve its investment objective. Investment decisions made by the Adviser in using these strategies may not produce the returns expected by the Adviser, may cause the Portfolio’s shares to lose value or may cause the Portfolio to underperform other funds with similar investment objectives.

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Market Risk – Market risk refers to the possibility that the market values of securities that the Portfolio holds will rise or fall, sometimes rapidly or unpredictably. Security values may fall because of factors affecting individual companies, industries or sectors, or the markets as a whole, reducing the value of an investment in the Portfolio. Accordingly, an investment in the Portfolio could lose money over short or even long periods. The market values of the securities the Portfolio holds also can be affected by changes or perceived changes in U.S. or foreign economies and financial markets, and the liquidity of these securities, among other factors. In general, equity securities tend to have greater price volatility than debt securities.

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Interest Rate Risk – Debt securities are subject to interest rate risk. In general, if prevailing interest rates rise, the values of debt securities will tend to fall, and if interest rates fall, the values of debt securities will tend to rise. Changes in the value of a debt security usually will not affect the amount of income the Portfolio receives from it but may affect the value of the Portfolio’s shares. Interest rate risk is generally greater for debt securities with longer maturities/durations.

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Association and the Federal Home Loan Banks are neither insured nor guaranteed by the U.S. Government. These securities may be supported by the ability to borrow from the U.S. Treasury or only by the credit of the issuing agency, authority, instrumentality or enterprise and, as a result, are subject to greater credit risk than securities issued or guaranteed by the U.S. Treasury.

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Mortgage-Backed Securities Risk – The value of the Portfolio’s mortgage-backed securities may be affected by, among other things, changes or perceived changes in: interest rates, factors concerning the interests in and structure of the issuer or the originator of the mortgages, the creditworthiness of the entities that provide any supporting letters of credit, surety bonds or other credit enhancements, or the market’s assessment of the quality of underlying assets. Mortgage-backed securities represent interests in, or are backed by, pools of mortgages from which payments of interest and principal (net of fees paid to the issuer or guarantor of the securities) are distributed to the holders of the mortgage-backed securities. Mortgage-backed securities can have a fixed or an adjustable rate. Payment of principal and interest on some mortgage-backed securities (but not the market value of the securities themselves) may be guaranteed (i) by the full faith and credit of the U.S. Government (in the case of securities guaranteed by the Government National Mortgage Association) or (ii) by its agencies, authorities, enterprises or instrumentalities (in the case of securities guaranteed by the Federal National Mortgage Association (FNMA) or the Federal Home Loan Mortgage Corporation (FHLMC)), which are not insured or guaranteed by the U.S. Government (although FNMA and FHLMC may be able to access capital from the U.S. Treasury to meet their obligations under such securities). Mortgage-backed securities issued by non-governmental issuers (such as commercial banks, savings and loan institutions, private mortgage insurance companies, mortgage bankers and other secondary market issuers) may be supported by various credit enhancements, such as pool insurance, guarantees issued by governmental entities, letters of credit from a bank or senior/subordinated structures, and may entail greater risk than obligations guaranteed by the U.S. Government, whether or not such obligations are guaranteed by the private issuer. Mortgage-backed securities are subject to prepayment risk, which is the possibility that the underlying mortgage may be refinanced or prepaid prior to maturity during periods of declining or low interest rates, causing the Portfolio to have to reinvest the money received in securities that have lower yields. In addition, the impact of prepayments on the value of mortgage-backed securities may be difficult to predict and may result in greater volatility. Rising or high interest rates tend to extend the duration of mortgage-backed securities, making them more volatile and more sensitive to changes in interest rates.

•

Asset-Backed Securities Risk – The value of the Portfolio’s asset-backed securities may be affected by, among other things, changes in: interest rates, factors concerning the interests in and structure of the issuer or the originator of the receivables, the creditworthiness of the entities that provide any supporting letters of credit, surety bonds or other credit enhancements, or the market’s assessment of the quality of underlying assets. Asset-backed securities represent interests in, or are backed by, pools of receivables such as credit card, auto, student and home equity loans. They may also be backed, in turn, by securities backed by these types of loans and others, such as mortgage loans. Asset-backed securities can have a fixed or an adjustable rate. Most asset-backed securities are subject to prepayment risk, which is the possibility that the underlying debt may be refinanced or prepaid prior to maturity during periods of declining or low interest rates, causing the Portfolio to have to reinvest the money received in securities that have lower yields. In addition, the impact of prepayments on the value of asset-backed securities may be difficult to predict and may result in greater volatility. Rising or high interest rates tend to extend the duration of asset-backed securities, making them more volatile and more sensitive to changes in interest rates.

•

Credit Risk – Credit risk applies to most debt securities, but is generally not a factor for obligations backed by the “full faith and credit” of the U.S. Government. The Portfolio could lose money if the issuer of a debt security is unable or perceived to be unable to pay interest or repay principal when it becomes due. Various factors could affect the issuer’s actual or perceived willingness or ability to make timely interest or principal payments, including changes in the issuer’s financial condition or in general economic conditions. Debt securities backed by an issuer’s taxing authority may be subject to legal limits on the issuer’s power to increase taxes or otherwise to raise revenue, or may be dependent on legislative appropriation or government aid. Certain debt securities are backed only by revenues derived from a particular project or source, rather than by an issuer’s taxing authority, and thus may have a greater risk of default.

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Foreign Securities Risk – Foreign securities are subject to special risks as compared to securities of U.S. issuers. For example, foreign markets can be extremely volatile. Fluctuations in currency exchange rates may impact the value of foreign securities denominated in foreign currencies, or in U.S. dollars, without a change in the intrinsic value of those securities. Foreign securities may be less liquid than domestic securities so that the Portfolio may, at times, be unable to sell foreign securities at desirable times or prices. Brokerage commissions, custodial fees and other fees are also generally higher for foreign securities. The Portfolio may have limited or no legal recourse in the event of default with respect to certain foreign securities, including those issued by foreign governments. In addition, foreign governments may impose potentially confiscatory withholding or other taxes, which could reduce the amount of income and capital gains available to distribute to shareholders. Other risks include possible delays in the settlement of transactions or in the payment of income; generally less publicly available information about companies; the impact of political, social or diplomatic events; possible seizure, expropriation or nationalization of a company or its assets; possible imposition of currency exchange controls; and accounting, auditing and financial reporting standards that may be less comprehensive and stringent than those applicable to domestic companies.

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Convertible Securities Risk – Convertible securities are subject to the usual risks associated with debt securities, such as interest rate risk and credit risk. Convertible securities also react to changes in the value of the common stock into which they convert, and are thus subject to market risk. Because the value of a convertible security can be influenced by both interest rates and market movements, a convertible security generally is not as sensitive to interest rates as a similar debt security, and generally will not vary in value in response to other factors to the same extent as the underlying common stock. In the event of a liquidation of the issuing company, holders of convertible securities would typically be paid before the company’s common stockholders but after holders of any senior debt obligations of the company. The Portfolio may be forced to convert a convertible security before it otherwise would choose to do so, which may decrease the Portfolio’s return.

•

Reinvestment Risk – Income from the Portfolio’s debt securities portfolio will decline if and when the Portfolio invests the proceeds from matured, traded or called securities in securities with market interest rates that are below the current earnings rate of the Portfolio’s portfolio.

•

Repurchase Agreements Risk – Repurchase agreements are agreements in which the seller of a security to the Portfolio agrees to repurchase that security from the Portfolio at a mutually agreed upon price and time. Repurchase agreements carry the risk that the counterparty may not fulfill its obligations under the agreement. This could cause the Portfolio’s income and the value of your investment in the Portfolio to decline.

•

Derivatives Risk – Derivatives are financial contracts whose values are, for example, based on (or “derived” from) traditional securities (such as a stock or bond), assets (such as a commodity like gold or a foreign currency), reference rates (such as LIBOR) or market indices (such as the S&P 500 ^® Index). Derivatives involve special risks and may result in losses or may limit the Portfolio’s potential gain from favorable market movements. Derivative strategies often involve leverage, which may exaggerate a loss, potentially causing the Portfolio to lose more money than it would have lost had it invested in the underlying security or other asset. The values of derivatives may move in unexpected ways, especially in unusual market conditions, and may result in increased volatility, among other consequences. The use of derivatives may also increase the amount of taxes payable by shareholders holding shares in a taxable account. Other risks arise from the Portfolio’s potential inability to terminate or to sell derivative positions. A liquid secondary market may not always exist for the Portfolio’s derivative positions at times when the Portfolio might wish to terminate or to sell such positions. Over-the-counter instruments (investments not traded on an exchange) may be illiquid, and transactions in derivatives traded in the over-the-counter market are subject to the risk that the other party will not meet its obligations. The use of derivatives also involves the risks of mispricing or improper valuation and that changes in the value of the derivative may not correlate perfectly with the underlying security, asset, reference rate or index. The Portfolio also may not be able to find a suitable derivative transaction counterparty, and thus may be unable to engage in derivative transactions when it is deemed favorable to do so, or at all. For more information on the risks of derivative investments and strategies, see the Statement of Additional Information.

•

Changing Distribution Levels Risk – The amount of the distributions paid by the Portfolio generally depends on the amount of interest and/or dividends received by the Portfolio on the securities it holds. The Portfolio may not be able to pay distributions or may have to reduce its distribution level if the interest and/or dividends the Portfolio receives from its investments decline.

•

Frequent Trading Risk – Frequent trading of investments increases the possibility that the Portfolio will realize taxable capital gains (including short-term capital gains, which are generally taxable at higher rates than long-term capital gains for federal income tax purposes), which could reduce the Portfolio’s after-tax return. Frequent trading can also mean higher brokerage and other transaction costs, which could reduce the Portfolio’s return.

Performance Information

The following bar chart and table show you how the Portfolio has performed in the past, and can help you understand the risks of investing in the Portfolio. The Portfolio’s past performance (before or after taxes) is no guarantee of how the Portfolio will perform in the future.

Year by Year Total Return (%) as of December 31 Each Year*

The bar chart below shows you how the performance of the Portfolio’s Shares has varied from year to year.

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*	Year-to-date return as of June 30, 2010: [ ]%

Best and Worst Quarterly Returns During this Period


Best:	[ ] quarter [ ]:	[ ]%
Worst:	[ ] quarter [ ]:	[ ]%

Average Annual Total Return as of December 31, 2009

The table compares the Portfolio’s returns for each period with those of the Barclays Capital U.S. Credit Bond Index, an index of publicly issued investment grade, corporate securities and dollar-denominated SEC registered global debentures.


	1 year		5 years		Life of Portfolio (August 30, 2002)
Shares returns before taxes	[	]%	[	]%	[	]%
Shares returns after taxes on distributions	[	]%	[	]%	[	]%
Shares returns after taxes on distributions and sale of Portfolio Shares	[	]%	[	]%	[	]%
Barclays Capital U.S. Credit Bond Index (reflects no deductions for fees, expenses or taxes)	[	]%	[	]%	[	]%

The after-tax returns shown in the table above are calculated using the highest historical individual federal marginal income tax rates and do not reflect the impact of state, local or foreign taxes. Your actual after-tax returns will depend on your personal tax situation and may differ from those shown in the table. In addition, the after-tax returns shown in the table do not apply to shares held in tax-deferred accounts such as 401(k) plans or IRAs.

Investment Adviser and Portfolio Manager(s)

Investment Adviser

Columbia Management Investment Advisers, LLC

Portfolio Manager

Carl W. Pappo Manager. Service with the Portfolio since 2006.

Purchase and Sale of Portfolio Shares

Portfolio Shares are available only to certain eligible investors through certain wrap fee programs, certain other managed accounts and certain registered investment companies, including those sponsored or managed by Ameriprise Financial and certain of its affiliates. There is no minimum initial investment.

Tax Information

The Portfolio normally distributes net investment income and net realized capital gains, if any, to shareholders. These distributions are generally taxable to you as ordinary income or capital gains, unless you are investing through a tax-deferred arrangement, such as a 401(k) plan or an individual retirement account (IRA).

Payments to Broker-Dealers and Other Financial Intermediaries

If you purchase the Portfolio through a broker-dealer or other financial intermediary (such as a bank), the Portfolio and its related companies – including Columbia Management Investment Advisers, LLC (the Adviser), Columbia Management Investment Distributors, Inc. (the Distributor) and Columbia Management Investment Services Corp. (the Transfer Agent) – may pay the intermediary for the sale of Portfolio shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your financial advisor to recommend the Portfolio over another investment. Ask your financial advisor or visit your financial intermediary’s website for more information.

Additional Investment Strategies and Policies

This section describes certain strategies and policies that the Portfolio may utilize in pursuit of its investment objective, and describes some additional factors and risks involved with investing in the Portfolio.

Changing the Portfolio’s Investment Objective and Policies

The Portfolio’s investment objective and certain of its investment policies can be changed without shareholder approval unless otherwise stated in this prospectus or the SAI. Shareholders vote on changes to other investment policies that are designated as fundamental in accordance with the requirements of the Investment Company Act of 1940 (the 1940 Act).

The Portfolio’s policy of investing at least 80% of its “net assets” (which includes net assets plus any borrowings for investment purposes) discussed in the Principal Investment Strategies section of this prospectus may be changed by the Board without shareholder approval as long as shareholders are given 60 days advance notice of the change.

Investment Guidelines

As a general matter, unless otherwise noted, whenever an investment policy or limitation states a percentage of the Portfolio’s assets that may be invested in any security or other asset, or sets forth a policy regarding an investment standard, compliance with that percentage limitation or standard will be determined solely at the time of the Portfolio’s acquisition of the security or asset.

Holding Other Kinds of Investments

The Portfolio may hold investments that aren’t part of its principal investment strategies. These investments are described in the Statement of Additional Information (SAI). The Portfolio may choose not to invest in certain securities described in this prospectus and in the SAI, although it has the ability to do so.

Investing in Money Market Funds

The Portfolio may invest uninvested cash, including cash collateral received in connection with its securities lending program, in shares of registered or unregistered money market funds, including funds advised by the Adviser. The Portfolio and its shareholders indirectly bear a portion of the expenses of any money market fund or other fund in which the Portfolio may invest. The Adviser and its affiliates receive fees from affiliated funds for providing advisory and other services in addition to the fees which they are entitled to receive from the Portfolio for services provided directly.

Lending Securities

The Portfolio may lend portfolio securities to approved broker/dealers or other financial intermediaries on a fully collateralized basis in order to earn additional income. The Portfolio may lose money from securities lending if, for example, it is delayed in or prevented from selling the collateral after the loan is made or recovering the securities loaned or if it incurs losses on the reinvestment of cash collateral. The Portfolio may invest some or all of the cash collateral it receives in connection with its securities lending program in one or more pooled investment vehicles, including, among other vehicles, money market funds managed by the Portfolio’s securities lending agent (or its affiliates). The securities lending agent shares in any income resulting from the investment of such cash collateral, and an affiliate of the securities lending agent receives asset-based fees for the management of such pooled investment vehicles, which may create a conflict of interest between the securities lending agent (or its affiliates) and the Portfolio with respect to the management of such cash collateral. Engaging in securities lending is subject to certain risks, including counterparty risk, which is the risk that the counterparty to a transaction could default.

Portfolio Holdings Disclosure

A description of Columbia Funds’ policies and procedures with respect to the disclosure of portfolio securities is available in the SAI.

In addition, more current information concerning the Portfolio’s portfolio holdings as of specified dates also may be disclosed on the Columbia Funds’ website.

Investing Defensively

The Portfolio may from time to time take temporary defensive investment positions that are inconsistent with the Portfolio’s principal investment strategies in attempting to respond to adverse market, economic, political or other conditions including, for example, investments in money market instruments or holdings of cash or cash equivalents. The Portfolio may not achieve its investment objective while it is investing defensively.

Mailings to Households

In order to reduce shareholder expenses we may, if prior consent has been provided, mail only one copy of the Portfolio’s prospectus and each annual and semi-annual report to those addresses shared by two or more accounts. If you wish to receive individual copies of these documents, call 800.345.6611 or, if your Shares are held through a financial intermediary, contact your intermediary directly.

Additional Information on Portfolio Turnover

A mutual fund that replaces, or turns over, more than 100% of its investments in a year is considered to have a high portfolio turnover rate. A high portfolio turnover rate can generate larger distributions of short-term capital gains to shareholders, which for individuals are generally taxable at higher rates than long-term capital gains for U.S. federal income tax purposes. A high portfolio turnover rate can also mean higher brokerage and other transaction costs, which could reduce a fund’s returns. In general, the greater the volume of buying and selling by a fund, the greater the impact that brokerage commissions will have on its returns. The Portfolio generally buys securities for capital appreciation, investment income or both. However, the Portfolio may sell securities regardless of how long they’ve been held. You’ll find the Portfolio’s portfolio turnover rate for its most recent fiscal year in the Fees and Expenses of the Portfolio - Portfolio Turnover section of this prospectus and portfolio turnover rates for prior fiscal years in the Financial Highlights section of this prospectus.

Management of the Portfolio

Primary Service Providers

The Adviser, which is also the Portfolio’s administrator, the Distributor and the Transfer Agent, all affiliates of Ameriprise Financial, Inc. (Ameriprise Financial), currently provide key services to the Portfolio and various other funds, including the Columbia-branded funds (Columbia Funds) and the RiverSource-, Seligman- and Threadneedle-branded funds, including investment advisory, administration, distribution, shareholder servicing and transfer agency services, and are paid for providing these services. These service relationships with respect to the Portfolio are described below.

The Adviser

The Adviser is located at 100 Federal Street, Boston, MA 02110 and serves as investment adviser to the Columbia Funds as well as to RiverSource-, Seligman- and Threadneedle-branded funds. The Adviser is a registered investment adviser and a wholly-owned subsidiary of Ameriprise Financial. Prior to May 1, 2010, the Adviser’s name was RiverSource Investments, LLC. Ameriprise Financial is a financial planning and financial services company that has been offering solutions for clients’ asset accumulation, income management and protection needs for more than 110 years. The Adviser’s management experience covers all major asset classes, including equity securities, fixed-income securities and money market instruments. In addition to serving as an investment adviser to mutual funds, the Adviser acts as an investment manager for itself, its affiliates, individuals, corporations, retirement plans, private investment companies and financial intermediaries.

Subject to oversight by the Board, the Adviser manages the day-to-day operations of the Portfolio, determines what securities and other investments the Portfolio should buy or sell and executes the portfolio transactions. Although the Adviser is responsible for the investment management of the Portfolio, the Adviser may delegate certain of its duties to one or more investment subadvisers. The Adviser may use the research and other capabilities of its affiliates and third parties in managing investments.

A discussion regarding the basis for the Board’s approval of the Portfolio’s investment advisory agreement with the Adviser is available in the Portfolio’s annual report to shareholders for the fiscal year ended March 31, 2010.

Subadviser(s)

The Adviser may engage an investment subadviser or subadvisers to make the day-to-day investment decisions for the Portfolio. The Adviser retains ultimate responsibility (subject to Board oversight) for overseeing any subadviser it engages and for evaluating the Portfolio’s needs and the subadvisers’ skills and abilities on an ongoing basis. Based on its evaluations, the Adviser may at times recommend to the Board that the Portfolio change, add or terminate one or more subadvisers; continue to retain a subadviser even though the subadviser’s ownership or corporate structure has changed; or materially change a subadvisory agreement with a subadviser.

The SEC has issued an order that permits the Adviser, subject to the approval of the Board, to appoint an unaffiliated subadviser or to change the terms of a subadvisory agreement for the Portfolio without first obtaining shareholder approval. The order permits the Portfolio to add or to change unaffiliated subadvisers or to change the fees paid to subadvisers from time to time without the expense and delays associated with obtaining shareholder approval of the change. The Adviser and its affiliates may have other relationships, including significant financial relationships, with current or potential subadvisers or their affiliates, which may create certain conflicts of interest. When making recommendations to the Board to appoint or to change a subadviser, or to change the terms of a subadvisory agreement, the Adviser discloses to the Board the nature of any material relationships it has with a subadviser or its affiliates.

At present, the Adviser has not engaged any investment subadviser for the Portfolio.

Portfolio Manager

Information about the Adviser’s portfolio manager who is primarily responsible for overseeing the Portfolio’s investments is shown in the table below. The SAI provides more information about the portfolio manager’s compensation, other accounts managed by the portfolio manager and the portfolio manager’s ownership of securities in the Portfolio.

Carl W. Pappo, CFA

Service with the Portfolio since 2006.

Portfolio manager of the Adviser. From 1993 until joining the Adviser in May 2010, Mr. Pappo was associated with the Fund’s previous investment adviser, Columbia Management Advisors, LLC or its predecessors as an investment professional.

The Administrator

Columbia Management Investment Advisers, LLC (the Administrator) is responsible for overseeing the administrative operations of the Portfolio, including the general supervision of the Portfolio’s operations, coordination of the Portfolio’s service providers, and the provision of office facilities and related clerical and administrative services.

The Administrator does not currently receive any fees for the administrative services it provides to the Portfolio.

The Distributor

Shares of the Portfolio are distributed by the Distributor. The Distributor is a registered broker/dealer and an indirect, wholly-owned subsidiary of Ameriprise Financial. The Distributor and its affiliates may pay commissions, distribution and service fees and/or other compensation to entities, including Ameriprise Financial affiliates, for selling shares and providing services to investors.

The Transfer Agent

The Transfer Agent is a registered transfer agent and a wholly-owned subsidiary of Ameriprise Financial. The Transfer Agent’s responsibilities include processing purchases, sales and exchanges, calculating and paying distributions, keeping shareholder records, preparing account statements and providing customer service. The Portfolio pays the Transfer Agent monthly fees on a per-account basis. Fees paid to the Transfer Agent include reimbursements for certain out-of-pocket expenses and sub-transfer agency fees, subject to certain limitations, paid by the Transfer Agent on the Portfolio’s behalf.

Other Roles and Relationships of Ameriprise Financial and its Affiliates—Certain Conflicts of Interest

The Adviser, Administrator, Distributor and Transfer Agent, all affiliates of Ameriprise Financial, provide various services to the Portfolio and other Columbia Funds, as well as RiverSource-, Seligman- and Threadneedle-branded funds, for which they are compensated. Ameriprise Financial and its other affiliates may also provide other services to these funds and be compensated for them.

The Adviser and its affiliates may provide investment advisory and other services to other clients and customers substantially similar to those provided to the Columbia Funds. These activities, and other financial services activities of Ameriprise Financial and its affiliates, may present actual and potential conflicts of interest and introduce certain investment constraints.

Ameriprise Financial is a major financial services company, engaged in a broad range of financial activities beyond the mutual fund-related activities of the Adviser, including, among others, insurance, broker/dealer (sales and trading), asset management, banking and other financial activities. These additional activities may involve multiple advisory, financial, insurance and other interests in securities and other instruments, and in companies that issue securities and other instruments, that may be bought, sold or held by the Columbia Funds.

Conflicts of interest and limitations that could affect a Columbia Fund may arise from, for example, the following:

•

compensation and other benefits received by the Adviser and other Ameriprise Financial affiliates related to the management/administration of a Columbia Fund and the sale of its shares;

•

the allocation of, and competition for, investment opportunities among the Fund and other funds and accounts advised/managed by the Adviser and other Ameriprise Financial affiliates, or Ameriprise Financial itself and its affiliates;

•

separate and potentially divergent management of a Columbia Fund and other funds and accounts advised/managed by the Adviser and other Ameriprise Financial affiliates;

•

regulatory and other investment restrictions on investment activities of the Adviser and other Ameriprise Financial affiliates and accounts advised/managed by them;

•

insurance and other relationships of Ameriprise Financial affiliates with companies and other entities in which a Columbia Fund invests; and

•

regulatory and other restrictions relating to the sharing of information between Ameriprise Financial and its affiliates, including the Adviser, and a Columbia Fund.

The Adviser and Ameriprise Financial have adopted various policies and procedures that are intended to identify, monitor and address conflicts of interest. However, there is no assurance that these policies, procedures and disclosures will be effective.

Additional information about Ameriprise Financial and the types of conflicts of interest and other matters referenced above is set forth in the “Investment Advisory and Other Services – Other Roles and Relationships of Ameriprise Financial and its Affiliates – Certain Conflicts of Interest” section of the SAI, which is identified by the icon. Investors in the Columbia Funds should carefully review these disclosures and consult with their financial advisor if they have any questions.

Certain Legal Matters

Ameriprise Financial and certain of its affiliates have historically been involved in a number of legal, arbitration and regulatory proceedings, including routine litigation, class actions and governmental actions, concerning matters arising in connection with the conduct of their business activities. Ameriprise Financial believes that the Portfolio is not currently the subject of, and that neither Ameriprise Financial nor any of its affiliates is the subject of, any pending legal, arbitration or regulatory proceedings that are likely to have a material adverse effect on the Portfolio or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Portfolio. Information regarding certain pending and settled legal proceedings may be found in the Portfolio’s shareholder reports and in the SAI. Additionally, Ameriprise Financial is required to make 10-Q, 10-K and, as necessary, 8-K filings with the SEC on legal and regulatory matters that relate to Ameriprise Financial and its affiliates. Copies of these filings may be obtained by accessing the SEC website at www.sec.gov.

About the Portfolio’s Shares

Description of the Share Class

Share Class Features

The Portfolio offers its only class of shares in this prospectus. This share class has its own investment eligibility criteria, cost structure and other features. The following summarizes the primary features of the Shares offered by this prospectus. Contact your financial advisor or Columbia Funds for more information about the Portfolio’s Shares.


		Shares

Eligible Investors and Minimum Initial Investments ^(a)		Shares of the Portfolio are available only to certain eligible investors. Eligible investors are not subject to any minimum initial investment requirements.

Investment Limits		none

Conversion Features		none

Front-End Sales Charges		none

Contingent Deferred Sales Charges (CDSCs)		none

Maximum Distribution and Service Fees		none

^(a)	See Buying and Selling Shares – Opening an Account and Placing Orders for more details on the eligible investors and investment minimums of this share class.

FUNDamentals ^TM

Selling and/or Servicing Agents

The terms “selling agent” and “servicing agent” refer to the financial intermediary that employs your financial advisor. Selling and/or servicing agents include, for example,brokerage firms, banks, investment advisors, third party administrators and other financial intermediaries, including Ameriprise Financial and its affiliates.

Financial Intermediary Compensation

The Distributor and the Adviser make payments, from their own resources, to certain financial intermediaries, including other Ameriprise Financial affiliates, for marketing/sales support services relating to the Columbia Funds. Such payments are generally based upon one or more of the following factors: average net assets of the Columbia Funds sold by the Distributor attributable to that intermediary, gross sales of the Columbia Funds distributed by the Distributor attributable to that intermediary, reimbursement of ticket charges (fees that an intermediary firm charges its representatives for effecting transactions in Portfolio shares) or a negotiated lump sum payment. While the financial arrangements may vary for each intermediary, the support payments to any one intermediary are generally between 0.05% and 0.50% on an annual basis for payments based on average net assets of the Portfolio attributable to the intermediary, and between 0.05% and 0.25% on an annual basis for firms receiving a payment based on gross sales of the Columbia Funds attributable to the intermediary.

The Distributor and the Adviser may make payments in larger amounts or on a basis other than those described above when dealing with certain affiliates of Bank of America Corporation (Bank of America). Such increased payments to Bank of America affiliates may enable them to offset credits that they may provide to customers.

The Distributor, the Transfer Agent and the Adviser may also make payments to financial intermediaries, including other Ameriprise Financial affiliates, that provide shareholder services to retirement plans and other investment programs to compensate those intermediaries for services they provide to such programs, including, but not limited to, sub-accounting, sub-transfer agency, similar shareholder or participant recordkeeping, shareholder or participant reporting or shareholder or participant transaction processing.

These payments for shareholder servicing support vary by financial intermediary but generally are not expected, with certain limited exceptions, to exceed 0.40% of the average aggregate value of the Portfolio’s Shares in any intermediary’s program on an annual basis for those classes of shares that pay a service fee pursuant to a plan under Rule 12b-1 under the 1940 Act, and 0.45% of the average aggregate value of the Portfolio’s Shares in any intermediary’s program on an annual basis for those classes of shares that do not pay a service fee pursuant to a plan under Rule 12b-1 under the 1940 Act.

The Board has authorized the Portfolio to reimburse the Transfer Agent for amounts paid to financial intermediaries that maintain assets in omnibus accounts, subject to an annual cap of 0.15% of the average aggregate value of the Portfolio’s Shares maintained in such accounts. The amounts in excess of that reimbursed by the Portfolio are borne by the Distributor or the Adviser. The Distributor and the Adviser may make other payments or allow promotional incentives to broker/dealers to the extent permitted by SEC and Financial Industry Regulatory Authority (FINRA) rules and by other applicable laws and regulations.

Amounts paid by the Distributor and the Adviser and their affiliates are paid out of the Distributor’s and the Adviser’s own resources and do not increase the amount paid by you or the Portfolio. You can find further details about the payments made by the Distributor and the Adviser and their affiliates and the services provided by financial intermediaries as well as a list of the intermediaries to which the Distributor and the Adviser have agreed to make marketing support payments in the SAI. Your financial intermediary may charge you fees and commissions in addition to those described in this prospectus. You should consult with your financial intermediary and review carefully any disclosure your financial intermediary provides regarding its services and compensation. Depending on the financial arrangement in place at any particular time, a financial intermediary and its financial consultants may have a financial incentive for recommending the Portfolio or a particular share class over others. See Management of the Portfolio – Other Roles and Relationships of Ameriprise Financial and its Affiliates – Certain Conflicts of Interest for more information.

Buying and Selling Shares

Share Price Determination

The price you pay or receive when you buy or sell Shares is the Portfolio’s next determined net asset value (or NAV) per share. The Portfolio calculates the net asset value per Share at the end of each business day.

FUNDamentals ^TM

NAV Calculation

The Portfolio’s Shares calculate the NAV as follows:

The value of the Portfolio’s Shares is based on the total market value of all of the securities and other assets that it holds as of a specified time. The prices reported on stock exchanges and other securities markets around the world are usually used to value securities in the Portfolio. The Portfolio uses the amortized cost method, which approximates market value, to value short-term investments maturing in 60 days or less.

If a market price isn’t readily available, the Portfolio will determine the price of the security held by the Portfolio based on the Adviser’s determination of the security’s fair value. A market price is considered not readily available if, among other circumstances, the most recent reported price is deemed unreliable. In addition, the Portfolio may use fair valuation to price securities that trade on a foreign exchange when a significant event has occurred after the foreign exchange closes but before the time at which the Portfolio’s share price is calculated. Foreign exchanges typically close before the time at which Portfolio share prices are calculated, and may be closed altogether on some days when the Portfolio is open. Such significant events affecting a foreign security may include, but are not limited to: (1) those impacting a single issuer; (2) governmental action that affects securities in one sector or country; (3) natural disasters or armed conflicts affecting a country or region; or (4) significant domestic or foreign market fluctuations. The Portfolio uses various criteria, including an evaluation of U.S. market moves after the close of foreign markets, in determining whether a security’s market price is readily available and, if not, the fair value of the security.

Fair valuation may have the effect of reducing stale pricing arbitrage opportunities presented by the pricing of Portfolio Shares. However, when the Portfolio uses fair valuation to price securities, it may value those securities higher or lower than another mutual fund. Also, the use of fair valuation may cause the Portfolio’s performance to diverge to a greater degree from the performance of various benchmarks used to compare the Portfolio’s performance because benchmarks generally do not use fair valuation techniques. Because of the judgment involved in fair valuation decisions, there can be no assurance that the value ascribed to a particular security is accurate. The Portfolio has retained an independent fair valuation pricing service to assist in the fair valuation process for foreign securities. International markets are sometimes open on days when U.S. markets are closed, which means that the value of foreign securities owned by the Portfolio could change on days when Portfolio Shares cannot be bought or sold.

Transaction Rules and Policies

Remember that sales charges may apply to your transactions. You should also ask your selling and/or servicing agent about its rules, fees and policies for buying and selling Portfolio Shares, which may be different from those described here, and about its related programs or services.

Also remember that the Portfolio may refuse any order to buy Shares. If this happens, we’ll return any money we’ve received, but no interest will be paid on that money.

Order Processing

Orders to buy or sell the Portfolio’s Shares are processed on business days. Orders can be delivered by mail, by telephone or online. Orders received in “good form” by the Transfer Agent or your selling and/or servicing agent before the end of a business day will receive that day’s net asset value per share. Orders received after the end of a business day will receive the next business day’s net asset value per share. The market value of the Portfolio’s investments may change between the time you submit your order and the time the Portfolio next calculates its net asset value per share. The business day that applies to your order is also called a trade date.

FUNDamentals ^TM

Business Days

A business day is any day that the New York Stock Exchange (NYSE) is open. A business day ends at the close of regular trading on the NYSE, usually at 4:00 p.m. Eastern time. If the NYSE closes early, the business day ends as of the time the NYSE closes. On holidays and other days when the NYSE is closed, the Portfolio’s net asset value is not calculated and the Portfolio does not accept buy or sell orders. However, the value of the Portfolio’s assets may still be affected on such days to the extent that the Portfolio holds foreign securities that trade on days that foreign securities markets are open.

“Good Form”

An order is in “good form” if the Transfer Agent or your selling and/or servicing agent has all of the information and documentation it deems necessary to effect your order. For example, when you sell Shares by letter of instruction, “good form” means that your letter has (i) complete instructions and the signatures of all account owners, (ii) a Medallion signature guarantee for amounts equal to or greater than $100,000 and (iii) any other required documents completed and attached. For the documents required for sales by corporations, agents, fiduciaries, surviving joint owners and other legal entities, call 800.345.6611.

Medallion Signature Guarantees

Qualified customers can obtain a Medallion signature guarantee from any financial institution – including commercial banks, credit unions and broker/dealers – that participates in one of the three Medallion signature guarantee programs recognized by the SEC. These Medallion signature guarantee programs are the Securities Transfer Agents Medallion Program (STAMP), the Stock Exchanges Medallion Program (SEMP) and the New York Stock Exchange Medallion Signature Program (MSP).

Written Transactions

Once you have an account, you can communicate written buy and sell orders to the Transfer Agent at the following address: Columbia Funds, c/o Columbia Investment Management Services, Corp., P.O. Box 8081, Boston, MA 02266-8081.

Telephone Transactions

Once you have an account, you may place orders to buy or sell by telephone. To place orders by telephone, call 800.422.3737. Have your account number and taxpayer identification number (TIN) available when calling.

You can sell up to an aggregate of $100,000 of shares via the telephone in any 30-day period if you qualify for telephone orders. Wire redemptions requested via the telephone are not subject to this maximum amount. You can buy up to $100,000 of shares through your bank account as an Automated Clearing House (ACH) transaction via the telephone per day if you qualify for telephone orders.

Telephone orders may not be as secure as written orders. Columbia Funds will take reasonable steps to confirm that telephone instructions are genuine. For example, we require proof of your identification before we will act on instructions received by telephone and may record telephone conversations. However, the Portfolio and its agents will not be responsible for any losses, costs or expenses resulting from an unauthorized telephone instruction when reasonable steps have been taken to confirm that telephone instructions are

genuine. Telephone orders may be difficult to complete during periods of significant economic or market change or business interruption.

Online Transactions

Once you have an account, contact Columbia Funds at 800.345.6611 for more information on account trading restrictions and the special sign-up procedures required for online transactions. The Transfer Agent has procedures in place to authenticate electronic orders you deliver through the internet. You will be required to accept the terms of an online agreement and establish and utilize a password in order to access online account services.

You can sell up to an aggregate of $100,000 of Shares through the internet in any 30-day period if you qualify for internet orders.

Customer Identification Program

Federal law requires the Portfolio to obtain and record specific personal information to verify your identity when you open an account. This information may include your name, address, date of birth (for individuals) and taxpayer or other government issued identification. If you fail to provide the requested information, the Portfolio may need to delay the date of your purchase or may be unable to open your account, which may result in a return of your investment monies. In addition, if the Portfolio is unable to verify your identity after your account is open, the Portfolio reserves the right to close your account or to take other steps as deemed reasonable. The Portfolio shall not be held liable for any loss resulting from any purchase delay, application rejection or account closure due to a failure to provide proper identifying information.

Cash Flows

The timing and magnitude of cash inflows from investors buying Portfolio shares could prevent the Portfolio from always being fully invested. Conversely, the timing and magnitude of cash outflows to investors selling Portfolio shares could require large ready reserves of uninvested cash to meet shareholder redemptions. Either situation could adversely impact the Portfolio’s performance.

Information Sharing Agreements

As required by Rule 22c-2 under the 1940 Act, the Columbia Funds or certain of their service providers will enter into information sharing agreements with financial intermediaries, including participating life insurance companies and financial intermediaries that sponsor or offer retirement plans through which shares of the Columbia Funds are made available for purchase. Pursuant to Rule 22c-2, financial intermediaries are required, upon request, to: (i) provide shareholder account and transaction information and (ii) execute instructions from the Portfolio to restrict or prohibit further purchases of Portfolio shares by shareholders who have been identified by the Portfolio as having engaged in transactions that violate the Portfolio’s excessive trading policies and procedures. See Buying and Selling Shares – Excessive Trading Practices for more information.

In-Kind Distributions

The Portfolio reserves the right to honor sell orders with in-kind distributions of portfolio securities instead of cash. In the event the Portfolio makes such an in-kind distribution, you may incur the brokerage and transaction costs associated with converting the portfolio securities you receive into cash. Also, the portfolio securities you receive may increase or decrease in value before you convert them into cash.

Excessive Trading Practices

Right to Reject or Restrict Share Transaction Orders – The Portfolio is intended for investors with long-term investment purposes and is not intended as a vehicle for frequent trading activity (market timing) that is excessive. Investors should transact in Portfolio Shares primarily for investment purposes. The Board has adopted excessive trading policies and procedures that are designed to deter excessive trading by investors (the Excessive Trading Policies and Procedures). The Portfolio discourages and does not accommodate excessive trading.

The Portfolio reserves the right to reject, without any prior notice, any buy order for any reason, and will not be liable for any loss resulting from rejected orders. For example, the Portfolio may in its discretion restrict or reject a buy order even if the transaction is not subject to the specific exchange limitation described below if the Portfolio or its agents determine that accepting the order could interfere with efficient management of the Portfolio’s portfolio or is otherwise contrary to the Portfolio’s best interests. The

Excessive Trading Policies and Procedures apply equally to buy or exchange transactions communicated directly to the Transfer Agent and to those received by selling and/or servicing agents.

Specific Buying and Exchanging Limitations – If the Portfolio detects that an investor has made two “material round trips” in any 28-day period, it will generally reject the investor’s future buy orders, including exchange buy orders, involving any Columbia Fund.

For these purposes, a “round trip” is a purchase or exchange into the Portfolio followed by a sale or exchange out of the Portfolio, or a sale or exchange out of the Portfolio followed by a purchase into the Portfolio. A “material” round trip is one that is deemed by the Portfolio to be material in terms of its amount or its potential detrimental impact on the Portfolio. Independent of this limit, the Portfolio may, in its discretion, reject future buy orders by any person, group or account that appears to have engaged in any type of excessive trading activity.

These limits generally do not apply to automated transactions or transactions by registered investment companies that invest in the Portfolio using a “fund of funds” structure. These limits do not apply to payroll deduction contributions by retirement plan participants, transactions initiated by a retirement plan sponsor or certain other retirement plan transactions consisting of rollover transactions, loan repayments and disbursements, and required minimum distribution redemptions. They may be modified or rescinded for accounts held by certain retirement plans to conform to plan limits, for considerations relating to the Employee Retirement Income Security Act of 1974 or regulations of the Department of Labor, and for certain asset allocation or wrap programs. Accounts known to be under common ownership or control generally will be counted together, but accounts maintained or managed by a common intermediary generally will not be considered to be under common ownership or control. The Portfolio retains the right to modify these restrictions at any time without prior notice to shareholders.

Limitations on the Ability to Detect and Prevent Excessive Trading Practices – The Portfolio takes various steps designed to detect and prevent excessive trading, including daily review of available shareholder transaction information. However, the Portfolio receives buy, sell and exchange orders through financial intermediaries, and cannot always know of or reasonably detect excessive trading that may be facilitated by financial intermediaries or by the use of the omnibus account arrangements they offer. Omnibus account arrangements are common forms of holding shares of mutual funds, particularly among certain financial intermediaries such as broker/ dealers, retirement plans and variable insurance products. These arrangements often permit financial intermediaries to aggregate their clients’ transactions and accounts, and in these circumstances, the identity of the shareholders is often not known.

Some financial intermediaries apply their own restrictions or policies to underlying investor accounts, which may be more or less restrictive than those described here. This may impact the Portfolio’s ability to curtail excessive trading, even where it is identified. For these and other reasons, it is possible that excessive trading may occur despite the Portfolio’s efforts to detect and prevent it.

Although these restrictions and policies involve judgments that are inherently subjective and may involve some selectivity in their application, the Portfolio seeks to act in a manner that it believes is consistent with the best interests of shareholders in making any such judgments.

Risks of Excessive Trading – Excessive trading creates certain risks to the Portfolio’s long-term shareholders and may create the following adverse effects:

•

negative impact on the Portfolio’s performance;

•

potential dilution of the value of the Portfolio’s Shares;

•

interference with the efficient management of the Portfolio’s portfolio, such as the need to maintain undesirably large cash positions, the need to use its line of credit or the need to buy or sell securities it otherwise would not have bought or sold;

•

losses on the sale of investments resulting from the need to sell securities at less favorable prices;

•

increased taxable gains to the Portfolio’s remaining shareholders resulting from the need to sell securities to meet sell orders; and

•

increased brokerage and administrative costs.

To the extent that the Portfolio invests significantly in foreign securities traded on markets that close before the Portfolio’s valuation time, it may be particularly susceptible to dilution as a result of excessive trading. Because events may occur after the close of foreign markets and before the Portfolio’s valuation time that influence the value of foreign securities,

investors may seek to trade Portfolio Shares in an effort to benefit from their understanding of the value of foreign securities as of the Portfolio’s valuation time. This is often referred to as price arbitrage. The Portfolio has adopted procedures designed to adjust closing market prices of foreign securities under certain circumstances to reflect what the Portfolio believes to be the fair value of those securities as of its valuation time. To the extent the adjustments don’t work fully, investors engaging in price arbitrage may cause dilution in the value of the Portfolio’s Shares held by other shareholders.

Similarly, to the extent that the Portfolio invests significantly in thinly traded high-yield bonds (junk bonds) or equity securities of small-capitalization companies, because these securities are often traded infrequently, investors may seek to trade their shares in an effort to benefit from their understanding of the value of these securities. This is also a type of price arbitrage. Any such frequent trading strategies may interfere with efficient management of the Portfolio’s portfolio to a greater degree than would be the case for mutual funds that invest in highly liquid securities, in part because the Portfolio may have difficulty selling those portfolio securities at advantageous times or prices to satisfy large and/or frequent sell orders. Any successful price arbitrage may also cause dilution in the value of Portfolio Shares held by other shareholders.

Opening an Account and Placing Orders

Columbia Funds encourages you to consult with a financial advisor who can help you with your investment decisions and who can help you open an account. Once you have an account, you can buy and sell Portfolio Shares by contacting your financial advisor who will send your order to the Transfer Agent. As described above in Buying and Selling Shares – Transaction Rules and Policies , once you have an account you can also communicate your orders directly to the Transfer Agent by mail, by telephone or online.

Buying Shares

Eligible Investors

Minimum Initial Investments

There is no minimum initial investment for the Portfolio’s Shares.

Minimum Additional Investments

There is no minimum additional investment for the Portfolio’s Shares.

Other Purchase Rules You Should Know

•

You buy Shares of the Portfolio at net asset value per share because no front-end sales charge applies to purchases of this share class.

•

Portfolio Shares bought are recorded on the books of the Portfolio. The Portfolio doesn’t issue certificates.

Selling Shares

When you sell your Portfolio Shares, the Portfolio is effectively buying them back from you. This is called a redemption.

Other Redemption Rules You Should Know

•

Once the Transfer Agent receives your sell order in “good form,” your Portfolio Shares will be sold at the next calculated net asset value per share.

•

If you sell your Portfolio Shares directly through Columbia Funds, we will normally send the sale proceeds by mail or electronically transfer them to your bank account within three business days after the Transfer Agent receives your order in “good form.”

•

If you paid for your Portfolio Shares by check or from your bank account as an Automated Clearing House (ACH) transaction, Columbia Funds will hold the sale proceeds when you sell those Portfolio Shares for up to 10 days after the trade date of the purchase.

•

If you hold any Portfolio Shares in certificate form, you will not be able to sell those Portfolio Shares until you have returned the certificates to the Transfer Agent.

•

No interest will be paid on uncashed redemption checks.

•

Columbia Funds can delay payment of the sale proceeds for up to seven days and may suspend redemptions and/or postpone payment of redemption proceeds when the NYSE is closed or during emergency circumstances as determined by the SEC.

•

Under certain circumstances allowed under the 1940 Act, the Portfolio can pay you in securities or other property rather than in cash when you sell your Portfolio Shares. See Buying and Selling Shares – Transaction Rules and Policies – In-Kind Distributions for details.

Distributions and Taxes

Distributions to Shareholders

A mutual fund can make money two ways:

•

It can earn income on its investments. Examples of fund income are interest paid on money market instruments and bonds, and dividends paid on common stocks.

•

A mutual fund can also have capital gains if the value of its investments increases. While a fund continues to hold an investment, any gain is unrealized. If the fund sells an investment, it generally will realize a capital gain if it sells that investment for a higher price than it originally paid. Capital gains are either short-term or long-term, depending on whether the fund holds the securities for one year or less (short-term gains) or more than one year (long-term gains).

FUNDamentals ^TM

Distributions

Mutual funds make payments of fund earnings to shareholders, distributing them among all shareholders of the fund. As a shareholder, you are entitled to your portion of a fund’s distributed income, including capital gains.

Reinvesting your distributions buys you more shares of a fund – which lets you take advantage of the potential for compound growth. Putting the money you earn back into your investment means it, in turn, may earn even more money. Over time, the power of compounding has the potential to significantly increase the value of your investment. There is no assurance, however, that you’ll earn more money if you reinvest your distributions rather than receive them in cash.

The Portfolio intends to pay out, in the form of distributions to shareholders, a sufficient amount of its income and gains so that the Portfolio will qualify for treatment as a regulated investment company and generally will not have to pay any federal excise tax. The Portfolio generally intends to distribute any net realized capital gain (whether long-term or short-term gain) at least once a year. Normally, the Portfolio will declare and pay distributions of net investment income according to the following schedule:

Declaration and Distribution Schedule


Declarations		monthly
Distributions		monthly

The Portfolio may, however, declare and pay distributions of net investment income more frequently.

Each time a distribution is made, the net asset value per share of the share class is reduced by the amount of the distribution.

The Portfolio generally pays cash distributions within five business days after the distribution was declared. If you sell all of your shares after the record date, but before the payment date, for a distribution, you’ll normally receive that distribution in cash within five business days after the sale was made.

The Portfolio will automatically reinvest distributions in additional shares of the Portfolio unless you inform us you want to receive your distributions in cash. You can do this by writing Columbia Funds at the address on the back cover, or by calling us at 800.345.6611. No sales charges apply to the purchase or sale of such shares. Distributions of $10 or less will automatically be reinvested in additional Portfolio shares only. If you elect to receive distributions by check and the check is returned as undeliverable, all subsequent distributions will be reinvested in additional shares of the Portfolio.

Unless you are a tax-exempt investor or holding Fund shares through a tax-advantaged account (such as a 401(k) plan or IRA), you should consider avoiding buying Portfolio shares shortly before the Portfolio makes a distribution of net investment income or net realized capital gain, because doing so can cost you money in taxes. This is because you will, in effect, receive part of your purchase price back in the distribution. This is known as “buying a dividend.” To avoid “buying a dividend,” check the Portfolio’s distribution schedule online at www.columbiafunds.com, or by calling us at 800.345.6611, before you invest.

If you buy shares of the Portfolio when it holds securities with unrealized capital gain, you may, in effect, receive part of your purchase price back if and when the Portfolio sells those securities and distributes any net realized gain. Any such distribution is generally subject to tax. The Portfolio may have, or may build up over time, high levels of unrealized capital gain. If you buy shares of the Portfolio when it has capital loss

carryforwards, the Portfolio may have the ability to offset capital gains realized by the Portfolio that otherwise would have been distributed to shareholders with such carryforwards, although capital loss carryforwards generally expire after eight taxable years and may be subject to substantial limitations.

Taxes and Your Investment

The Portfolio will send you a statement each year showing how much you’ve received in distributions in the prior year and the distributions’ character for federal income tax purposes. The Portfolio expects that distributions will consist primarily of ordinary income. In addition, you should be aware of the following:

•

The Portfolio intends to qualify each year as a regulated investment company. A regulated investment company generally is not subject to tax at the portfolio level on income and gains from investments that are distributed to shareholders. However, the Portfolio’s failure to qualify as a regulated investment company would result in portfolio level taxation, and consequently, a reduction in income available for distribution to you.

•

Distributions generally are taxable to you when paid, whether they are paid in cash or automatically reinvested in additional Shares of the Portfolio.

•

Distributions of the Portfolio’s ordinary income and net short-term capital gain, if any, generally are taxable to you as ordinary income. Distributions of the Portfolio’s net long-term capital gain, if any, generally are taxable to you as long-term capital gain. Whether capital gains are long-term or short-term is determined by how long the Portfolio has owned the investments that generated them, rather than how long you have owned your Shares.

•

For taxable years beginning on or before December 31, 2010, if you are an individual and you meet certain holding period and other requirements for your Portfolio Shares, a portion of your distributions may be treated as “qualified dividend income” taxable at lower net long-term capital gain rates. It is currently unclear whether Congress will extend this provision to taxable years beginning after December 31, 2010. Qualified dividend income is income attributable to the Portfolio’s dividends received from certain U.S. and foreign corporations, as long as the Portfolio meets certain holding period and other requirements for the stock producing such dividends. The Portfolio does not expect a significant portion of Portfolio distributions to be derived from qualified dividend income.

•

For taxable years beginning on or before December 31, 2010, the maximum individual federal income tax rate on net long-term capital gain (and thus qualified dividend income) has been temporarily reduced to 15%. It is currently unclear whether Congress will extend this rate reduction to taxable years beginning after December 31, 2010.

•

A sale or redemption of Portfolio Shares is a taxable event. This includes redemptions where you are paid in securities. Your sales and redemptions of Portfolio Shares (including those paid in securities) usually will result in a taxable capital gain or loss to you, equal to the difference between the amount you receive for your Shares (or are deemed to have received in the case of exchanges) and the amount you paid (or are deemed to have paid in the case of exchanges) for them. Any such capital gain or loss generally will be long-term capital gain or loss if you have held your Portfolio Shares for more than one year at the time of sale or exchange. In certain circumstances, capital losses may be converted from short-term to long-term or disallowed.

•

The Portfolio is required by federal law to withhold tax on any taxable distributions and sale proceeds paid to you (including amounts paid to you in securities) if: you haven’t provided a correct taxpayer identification number (TIN) or haven’t certified to the Portfolio that withholding doesn’t apply; the Internal Revenue Service (IRS) has notified us that the TIN listed on your account is incorrect according to its records; or the IRS informs the Portfolio that you are otherwise subject to backup withholding.

FUNDamentals ^TM

Taxes

The information provided above is only a summary of how U.S. federal income taxes may affect your investment in the Portfolio. It is not intended as a substitute for careful tax planning. Your investment in the Portfolio may have other tax implications.

It does not apply to certain types of investors who may be subject to special rules, including foreign or tax-exempt investors or those holding Portfolio Shares through a tax-advantaged account, such as a 401(k) plan or IRA.

You should consult with your own tax advisor about the particular tax consequences to you of an investment in the Portfolio, including the effect of any foreign, state and local taxes, and the effect of possible changes in applicable tax laws.

Financial Highlights

The financial highlights table is designed to help you understand how the Portfolio has performed for the past five full fiscal years, or if shorter, the Portfolio’s period of operations. Certain information reflects financial results for a single Portfolio Share. The total return line indicates how much an investment in the Portfolio would have earned each period assuming all dividends and distributions had been reinvested.

This information has been audited by [ ], an independent registered public accounting firm whose report, along with the Portfolio’s financial statements, is included in the Portfolio’s annual report. The independent registered public accounting firm’s report and the Portfolio’s financial statements are also incorporated by reference into the SAI.

Corporate Bond Portfolio—Shares


	Year Ended March 31, 2010			Year Ended March 31, 2009			Year Ended March 31, 2008			Year Ended March 31, 2007			Year Ended March 31, 2006
Net Asset Value, Beginning of Period	$	[	]	$	9.66		$	10.06		$	9.93		$	10.19
Income from Investment Operations:
Net investment income (a)		[	]		0.56			0.58			0.55			0.49
Net realized and unrealized gain (loss) on investments, futures contracts and credit default swap contracts		[	]		(1.01	)		(0.40	)		0.13			(0.25	)
Total from investment operations		[	]		(0.45	)		0.18			0.68			0.24
Less Distributions to Shareholders:
From net investment income		[	]		(0.57	)		(0.58	)		(0.55	)		(0.49	)
From net realized gains		[	]		—			—			—			(0.01	)
Total distributions to shareholders		[	]		(0.57	)		(0.58	)		(0.55	)		(0.50	)
Net Asset Value, End of Period	$	[	]	$	8.64		$	9.66		$	10.06		$	9.93
Total return (b)		[	]%		(4.65	)%		1.81	% ^(c)		7.01	%		2.34	%
Ratios to Average Net Assets/Supplemental Data:
Net expenses (d)		[	]		—			—			—			—
Net investment income (d)		[	]%		6.10	%		5.84	%		5.55	%		4.83	%
Portfolio turnover rate		[	]%		137	%		189	%		114	%		62	%
Net assets, end of period (000’s)	$	[	]	$	19,555		$	73,803		$	78,588		$	64,597

^(a)	Per share data was calculated using the average shares outstanding during the period.

^(b)	Total return at net asset value assuming all distributions reinvested.

^(c)	Total return includes a voluntary reimbursement by the investment advisor for a realized investment loss due to a trading error. This reimbursement increased total return and net asset value per share by less than 0.01% and less than $0.01, respectively.

^(d ⁾

The net investment income and expense ratios exclude expenses charged directly to shareholders.

Hypothetical Fees and Expenses

The following supplemental hypothetical investment information provides additional information about the effect of the fees and expenses of the Portfolio, including investment advisory fees and other Portfolio costs, on the Portfolio’s returns over a 10-year period. The chart shows the estimated fees and expenses that would be charged on a hypothetical investment of $10,000 in Shares of the Portfolio, assuming a 5% return each year, the cumulative return after fees and expenses and the hypothetical year-end balance after fees and expenses. The chart also assumes that all dividends and distributions are reinvested. The annual expense ratio used for the share class, which is the same as that stated in the Annual Portfolio Operating Expenses table, is presented in the chart and is net of any contractual fee waivers or expense reimbursements for the period of contractual commitment. Your actual costs may be higher or lower.

Corporate Bond Portfolio—Shares


Maximum Initial Sales Charge 0.00%			Initial Hypothetical Investment Amount $10,000.00				Assumed Rate of Return 5%
Year	Cumulative Return Before Fees and Expenses		Annual Expense Ratio		Cumulative Return After Fees and Expenses		Hypothetical Year- End Balance After Fees and Expenses		Annual Fees and Expenses ^(a)
1	5.00	%	0.00	%	5.00	%	$	10,500.00	$	0.00
2	10.25	%	0.00	%	10.25	%	$	11,025.00	$	0.00
3	15.76	%	0.00	%	15.76	%	$	11,576.25	$	0.00
4	21.55	%	0.00	%	21.55	%	$	12,155.06	$	0.00
5	27.63	%	0.00	%	27.63	%	$	12,762.81	$	0.00
6	34.01	%	0.00	%	34.01	%	$	13,400.95	$	0.00
7	40.71	%	0.00	%	40.71	%	$	14,071.00	$	0.00
8	47.75	%	0.00	%	47.75	%	$	14,774.55	$	0.00
9	55.13	%	0.00	%	55.13	%	$	15,513.28	$	0.00
10	62.89	%	0.00	%	62.89	%	$	16,288.94	$	0.00
Total Gain After Fees and Expenses							$	6,288.94
Total Annual Fees and Expenses Paid									$	0.00

^(a)	Annual Fees and Expenses are calculated based on the average between the beginning and ending balance for each year. All information is calculated on an annual compounding basis.

LOGO

Corporate Bond Portfolio Shares

Prospectus, August 1, 2010

For More Information

You’ll find more information about the Portfolio and the other Columbia Funds in the documents described below. Contact Columbia Funds as follows to obtain these documents free of charge, to request other information about the Portfolio and to make shareholder inquiries:


By Mail:		Columbia Funds c/o Columbia Management Investment Services Corp. P.O. Box 8081 Boston, MA 02266-8081

By Telephone:		800.345.6611

Online:		www.columbiafunds.com

Annual and Semi-Annual Reports to Shareholders

Additional information about the Portfolio’s investments is available in the Portfolio’s annual and semi-annual reports to shareholders. In the annual report, you will find a discussion of the market conditions and investment strategies that significantly affected the Portfolio’s performance during its last fiscal year.

Statement of Additional Information

The SAI provides more detailed information about the Portfolio and its policies. The SAI is legally part of this prospectus (incorporated by reference). A copy has been filed with the SEC.

The annual and semi-annual reports and the SAI are not available on a website because Columbia Management does not maintain a website for the Portfolio, which is available only through wrap fee programs.

Shareholder Communications with the Board

The Portfolio’s Board of Trustees has adopted procedures by which shareholders may communicate with the Board. Shareholders who wish to communicate with the Board should send their written communications to the Board by mail, c/o Columbia Management Investment Advisers, LLC, One Financial Center, Mail Stop MA5-515-11-05, Boston, MA 02111, Attention: Secretary. Shareholder communications must (i) be in writing, (ii) identify the Columbia Fund to which the communication relates and (iii) state the particular class and number of shares held by the communicating shareholder.

Information Provided by the SEC

You can review and copy information about the Portfolio (including this prospectus, the SAI and shareholder reports) at the SEC’s Public Reference Room in Washington, DC. To find out more about the operation of the Public Reference Room, call the SEC at 202.551.8090. Reports and other information about the Portfolio are also available in the EDGAR Database on the SEC’s website at http://www.sec.gov. You can receive copies of this information, for a fee, by electronic request at the following e-mail address: publicinfo@sec.gov or by writing the Public Reference Section, Securities and Exchange Commission, Washington, DC 20549-1520

For purposes of any electronic version of this prospectus, all references to websites, or universal resource locators (URLs), are intended to be inactive and are not meant to incorporate the contents of any website into this prospectus.

FUNDamentals™ is a trademark of Ameriprise Financial.

The investment company registration number of Columbia Funds Series Trust, of which the Portfolio is a series, is 811-09645.

One Financial Center, Boston, MA 02111-2621

800.345.6611 www.columbiafunds.com

INT-36/[ ]-0810

LOGO

Prospectus

August 1, 2010

Columbia Funds

Mortgage- and Asset-Backed Portfolio

Ticker symbol

Shares NMTGX

Table of Contents


Mortgage- and Asset-Backed Portfolio		3

Investment Objective		3

Fees and Expenses of the Portfolio		3

Principal Investment Strategies		5

Principal Risks		5

Performance Information		8

Investment Adviser and Portfolio Manager(s)		9

Purchase and Sale of Portfolio Shares		9

Tax Information		9

Payments to Broker-Dealers and Other Financial Intermediaries		9

Additional Investment Strategies and Policies		10

Management of the Portfolio		12

Primary Service Providers		12

Other Roles and Relationships of Ameriprise Financial and its Affiliates—Certain Conflicts of Interest		14

Certain Legal Matters		15

About the Portfolio’s Shares		16

Description of the Share Class		16

Financial Intermediary Compensation		17

Buying and Selling Shares		18

Share Price Determination		18

Transaction Rules and Policies		19

Opening an Account and Placing Orders		23

Distributions and Taxes		24

Financial Highlights		27

Hypothetical Fees and Expenses		28

Icons Guide

Investment Objective

Fees and Expenses of the Portfolio

Principal Investment Strategies

Principal Risks

Performance Information

Other Roles and Relationships of Ameriprise Financial and its Affiliates - Certain Conflicts of Interest

Mortgage- and Asset-Backed Portfolio

Investment Objective

The Portfolio seeks total return, consisting of current income and capital appreciation.

Fees and Expenses of the Portfolio

This fee table reflects the fact that no fees or expenses are charged to the Portfolio. Participants in the wrap fee programs eligible to invest in the Portfolio, however, pay an asset-based fee, which is negotiable, for investment services, brokerage services and investment consultation. Consult your wrap program documents for information regarding fees charged to the Portfolio. The Portfolio may incur significant transaction costs that are in addition to the wrap fees paid to the program sponsor described in this fee table.

Shareholder Fees (fees paid directly from your investment)


		Shares
Maximum sales charge (load) imposed on purchases, as a % of offering price		N/A
Maximum deferred sales charge (load) imposed on redemptions, as a % of the lower of the original purchase price or net asset value		N/A

Annual Portfolio Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)


	Shares
Management fees	0.00	%
Distribution and/or service (Rule 12b-1) fees	0.00	%
Other expenses	0.00	%
Acquired fund fees and expenses	—
Total annual Portfolio operating expenses	0.00	%

Example

The following example is intended to help you compare the cost of investing in the Portfolio with the cost of investing in other mutual funds.

The example illustrates the hypothetical expenses that you would incur over the time periods indicated, and assumes that:

•

you invest $10,000 in Shares of the Portfolio for the periods indicated,

•

your investment has a 5% return each year, and

•

the Portfolio’s total annual operating expenses remain the same as shown in the table above.

Based on the assumptions listed above, your costs would be:


	1 year		3 years		5 years		10 years
Shares	$	0	$	0	$	0	$	0

Remember this is an example only. Your actual costs may be higher or lower.

Portfolio Turnover

LOGO Principal Investment Strategies

Under normal circumstances, the Portfolio invests at least 80% of its net assets in mortgage-related securities or other asset-backed securities. The Portfolio may invest up to 20% of its net assets in U.S. Treasury obligations or other U.S. Government obligations. All investments in mortgage- and other asset-backed securities normally will be rated investment grade by one or more nationally recognized statistical rating agencies or unrated securities determined by Columbia Management Investment Advisers, LLC, the Portfolio’s investment adviser (the Adviser), to be of comparable quality at the time of purchase. Under normal circumstances, the Portfolio’s dollar-weighted effective duration will be between one and six years.

The Portfolio may also participate in mortgage dollar rolls up to the Portfolio’s then current position in mortgage-backed securities.

Principal Risks

•

the Federal National Mortgage Association (FNMA) or the Federal Home Loan Mortgage Corporation (FHLMC)), which are not insured or guaranteed by the U.S. Government (although FNMA and FHLMC may be able to access capital from the U.S. Treasury to meet their obligations under such securities). Mortgage-backed securities issued by non-governmental issuers (such as commercial banks, savings and loan institutions, private mortgage insurance companies, mortgage bankers and other secondary market issuers) may be supported by various credit enhancements, such as pool insurance, guarantees issued by governmental entities, letters of credit from a bank or senior/subordinated structures, and may entail greater risk than obligations guaranteed by the U.S. Government, whether or not such obligations are guaranteed by the private issuer. Mortgage-backed securities are subject to prepayment risk, which is the possibility that the underlying mortgage may be refinanced or prepaid prior to maturity during periods of declining or low interest rates, causing the Portfolio to have to reinvest the money received in securities that have lower yields. In addition, the impact of prepayments on the value of mortgage-backed securities may be difficult to predict and may result in greater volatility. Rising or high interest rates tend to extend the duration of mortgage-backed securities, making them more volatile and more sensitive to changes in interest rates.

•

U.S. Government Obligations Risk – U.S. Treasury obligations are backed by the “full faith and credit” of the U.S. Government and generally have negligible credit risk. Securities issued or guaranteed by federal agencies or authorities and U.S. Government-sponsored instrumentalities or enterprises may or may not be backed by the full faith and credit of the U.S. Government. For example, securities issued by the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association and the Federal Home Loan Banks are neither insured nor guaranteed by the U.S. Government. These securities may be supported by the ability to borrow from the U.S. Treasury or only by the credit of the issuing agency, authority, instrumentality or enterprise and, as a result, are subject to greater credit risk than securities issued or guaranteed by the U.S. Treasury.

•

able to pay distributions or may have to reduce its distribution level if the interest and/or dividends the Portfolio receives from its investments decline.

•

Dollar Rolls Risk – Dollar rolls are transactions in which the Portfolio sells securities to a counterparty and simultaneously agrees to purchase those or similar securities in the future at a predetermined price. Dollar rolls involve the risk that the market value of the securities the Portfolio is obligated to repurchase may decline below the repurchase price, or that the counterparty may default on its obligations. These transactions may also increase the Portfolio’s portfolio turnover rate. If the Portfolio reinvests the proceeds of the security sold, the Portfolio will also be subject to the risk that the investments purchased with such proceeds will decline in value (a form of leverage risk).

•

Performance Information

Year by Year Total Return (%) as of December 31 Each Year*

The bar chart below shows you how the performance of the Portfolio’s Shares has varied from year to year.

LOGO

*	Year-to-date return as of June 30, 2010: [ ]%

Best and Worst Quarterly Returns During this Period


Best:	[ ] quarter [ ]:	[	]%
Worst:	[ ] quarter [ ]:	[	]%

Average Annual Total Return as of December 31, 2009

The table compares the Portfolio’s returns for each period with those of the Barclays Capital U.S. Securitized Index, which is the largest component of the U.S. Aggregate Index and consists of the U.S. MBS Index, the ERISA-Eligible CMBS Index, and the fixed-rate ABS Index. As of April 1, 2007, the U.S. MBS Index includes both fixed-rate agency passthroughs and agency hybrid ARM securities.


	1 year		5 years		Life of Portfolio (August 30, 2002)
Shares returns before taxes	[	]%	[	]%	[	]%
Shares returns after taxes on distributions	[	]%	[	]%	[	]%
Shares returns after taxes on distributions and sale of Portfolio Shares	[	]%	[	]%	[	]%
Barclays Capital U.S. Securitized Index (reflects no deductions for fees, expenses or taxes)	[	]%	[	]%	[	]%

Investment Adviser and Portfolio Manager(s)

Investment Adviser

Columbia Management Investment Advisers, LLC

Portfolio Managers

Lee Reddin, CFA

Co-manager. Service with the Portfolio since 2007.

Michael W. Zazzarino Co-manager.

Service with the Portfolio since 2007.

Purchase and Sale of Portfolio Shares

Tax Information

Payments to Broker-Dealers and Other Financial Intermediaries

Additional Investment Strategies and Policies

Changing the Portfolio’s Investment Objective and Policies

Investment Guidelines

Holding Other Kinds of Investments

Investing in Money Market Funds

Lending Securities

Portfolio Holdings Disclosure

A description of Columbia Funds’ policies and procedures with respect to the disclosure of portfolio securities is available in the SAI.

In addition, more current information concerning the Portfolio’s portfolio holdings as of specified dates also may be disclosed on the Columbia Funds’ website.

Investing Defensively

Mailings to Households

Additional Information on Portfolio Turnover

Management of the Portfolio

Primary Service Providers

The Adviser

Subject to oversight by the Board, the Adviser manages the day-to-day operations of the Portfolio, determines what securities and other investments the Portfolio should buy or sell and executes the portfolio transactions. Although the Adviser is responsible for the investment management of the Portfolio, the Adviser may delegate certain of its duties to one or more investment subadviser. The Adviser may use the research and other capabilities of its affiliates and third parties in managing investments.

Subadviser(s)

At present, the Adviser has not engaged any investment subadviser for the Portfolio.

Portfolio Managers

Information about the Adviser’s portfolio managers who are primarily responsible for overseeing the Portfolio’s investments is shown in the table below. The SAI provides more information about each portfolio manager’s compensation, other accounts managed by each portfolio manager and each portfolio manager’s ownership of securities in the Portfolio.

Lee Reddin, CFA

Co-manager. Service with the Portfolio since 2007.

Portfolio manager of the Adviser. From 2000 until joining the Adviser in May 2010, Mr. Reddin was associated with the Fund’s previous investment adviser, Columbia Management Advisors, LLC, or its predecessors as an investment professional.

Michael W. Zazzarino

Co-manager. Service with the Portfolio since 2007.

Portfolio manager of the Adviser. From March 2005 until joining the Adviser in May 2010, Mr. Zazzarino was associated with the Fund’s previous investment adviser, Columbia Management Advisors, LLC, or its predecessors as an investment professional.

The Administrator

The Administrator does not currently receive any fees for the administrative services it provides to the Portfolio.

The Distributor

The Transfer Agent

LOGO Other Roles and Relationships of Ameriprise Financial and its Affiliates—Certain Conflicts of Interest

Conflicts of interest and limitations that could affect a Columbia Fund may arise from, for example, the following:

•

compensation and other benefits received by the Adviser and other Ameriprise Financial affiliates related to the management/administration of a Columbia Fund and the sale of its shares;

•

separate and potentially divergent management of a Columbia Fund and other funds and accounts advised/managed by the Adviser and other Ameriprise Financial affiliates;

•

regulatory and other investment restrictions on investment activities of the Adviser and other Ameriprise Financial affiliates and accounts advised/managed by them;

•

insurance and other relationships of Ameriprise Financial affiliates with companies and other entities in which a Columbia Fund invests; and

•

regulatory and other restrictions relating to the sharing of information between Ameriprise Financial and its affiliates, including the Adviser, and a Columbia Fund.

Certain Legal Matters

About the Portfolio’s Shares

Description of the Share Class

Share Class Features


		Shares
Eligible Investors and Minimum Initial Investments ^(a)		Shares of the Portfolio are available only to certain eligible investors. Eligible investors are not subject to any minimum initial investment requirements.

Investment Limits		none

Conversion Features		none

Front-End Sales Charges		none

Contingent Deferred Sales Charges (CDSCs)		none

Maximum Distribution and Service Fees		none

^(a)	See Buying and Selling Shares – Opening an Account and Placing Orders for more details on the eligible investors and investment minimums of this share class.

FUNDamentals ^TM

Selling and/or Servicing Agents

The terms “selling agent” and “servicing agent” refer to the financial intermediary that employs your financial advisor. Selling and/or servicing agents include, for example, brokerage firms, banks, investment advisors, third party administrators and other financial intermediaries, including Ameriprise Financial and its affiliates.

Financial Intermediary Compensation

Buying and Selling Shares

Share Price Determination

FUNDamentals ^TM

NAV Calculation

The Portfolio’s Shares calculate the NAV as follows:


		(Value of assets of the share class)
NAV	=	— (Liabilities of the share class)
		Number of outstanding shares of the class

Transaction Rules and Policies

Also remember that the Portfolio may refuse any order to buy Shares. If this happens, we’ll return any money we’ve received, but no interest will be paid on that money.

Order Processing

FUNDamentals ^TM

Business Days

“Good Form”

Medallion Signature Guarantees

Written Transactions

Once you have an account, you can communicate written buy and sell orders to the Transfer Agent at the following address: Columbia Funds, c/o Columbia Management Investment Services, Corp., P.O. Box 8081, Boston, MA 02266-8081.

Telephone Transactions

genuine. Telephone orders may be difficult to complete during periods of significant economic or market change or business interruption.

Online Transactions

You can sell up to an aggregate of $100,000 of Shares through the internet in any 30-day period if you qualify for internet orders.

Customer Identification Program

Cash Flows

Information Sharing Agreements

In-Kind Distributions

Excessive Trading Practices

Excessive Trading Policies and Procedures apply equally to buy or exchange transactions communicated directly to the Transfer Agent and to those received by selling and/or servicing agents.

Risks of Excessive Trading – Excessive trading creates certain risks to the Portfolio’s long-term shareholders and may create the following adverse effects:

•

negative impact on the Portfolio’s performance;

•

potential dilution of the value of the Portfolio’s Shares;

•

losses on the sale of investments resulting from the need to sell securities at less favorable prices;

•

increased taxable gains to the Portfolio’s remaining shareholders resulting from the need to sell securities to meet sell orders; and

•

increased brokerage and administrative costs.

Opening an Account and Placing Orders

Buying Shares

Eligible Investors

Minimum Initial Investments

There is no minimum initial investment for the Portfolio’s Shares.

Minimum Additional Investments

There is no minimum additional investment for the Portfolio’s Shares.

Other Purchase Rules You Should Know

•

You buy Shares of the Portfolio at net asset value per share because no front-end sales charge applies to purchases of this share class.

•

Portfolio Shares bought are recorded on the books of the Portfolio. The Portfolio doesn’t issue certificates.

Selling Shares

When you sell your Portfolio Shares, the Portfolio is effectively buying them back from you. This is called a redemption.

Other Redemption Rules You Should Know

•

Once the Transfer Agent receives your sell order in “good form,” your Portfolio Shares will be sold at the next calculated net asset value per share.

•

If you hold any Portfolio Shares in certificate form, you will not be able to sell those Portfolio Shares until you have returned the certificates to the Transfer Agent.

•

No interest will be paid on uncashed redemption checks.

•

Distributions and Taxes

Distributions to Shareholders

A mutual fund can make money two ways:

•

It can earn income on its investments. Examples of fund income are interest paid on money market instruments and bonds, and dividends paid on common stocks.

•

FUNDamentals ^TM

Distributions

Declaration and Distribution Schedule


Declarations		monthly
Distributions		monthly

The Portfolio may, however, declare and pay distributions of net investment income more frequently.

Each time a distribution is made, the net asset value per share of the share class is reduced by the amount of the distribution.

Taxes and Your Investment

•

Distributions generally are taxable to you when paid, whether they are paid in cash or automatically reinvested in additional Shares of the Portfolio.

•

FUNDamentals ^TM

Taxes

Financial Highlights

Mortgage- and Asset-Backed Portfolio—Shares


	Year Ended March 31, 2010			Year Ended March 31, 2009			Year Ended March 31, 2008			Year Ended March 31, 2007			Year Ended March 31, 2006
Net Asset Value, Beginning of Period	$	[	]	$	9.32		$	10.01		$	9.85		$	10.01
Income from Investment Operations:
Net investment income ^(a)		[	]		0.44			0.54			0.54			0.40
Net realized and unrealized gain (loss) on investments		[	]		(0.44	)		(0.67	)		0.14			(0.12	)
Total from investment operations		[	]		—			(0.13	)		0.68			0.28
Less Distributions to Shareholders:
From net investment income		[	]		(0.44	)		(0.53	)		(0.52	)		(0.40	)
From net realized gains		[	]		—			(0.03	)		—			(0.04	)
Total distributions to shareholders		[	]		(0.44	)		(0.56	)		(0.52	)		(0.44	)
Net Asset Value, End of Period	$	[	]	$	8.88		$	9.32		$	10.01		$	9.85
Total return ^(b)		[	]%		0.10	%		(1.34	)%		7.12	%		2.85	%
Ratios to Average Net Assets/Supplemental Data:
Net expenses ^(c)		[	]		—			—			—			—
Net investment income ^(c)		[	]%		4.92	%		5.50	%		5.41	%		4.00	%
Portfolio turnover rate		[	]%		142	%		369	%		543	%		561	%
Net assets, end of period (000’s)	$	[	]	$	48,128		$	138,196		$	135,358		$	89,569

^(a)	Per share data was calculated using the average shares outstanding during the period.

^(b)	Total return at net asset value assuming all distributions reinvested.

^(c)	The net investment income and expense ratios exclude expenses charged directly to shareholders.

Hypothetical Fees and Expenses

Mortgage- and Asset-Backed Portfolio—Shares


Maximum Initial Sales Charge 0.00%			Initial Hypothetical Investment Amount $10,000.00				Assumed Rate of Return 5%
Year	Cumulative Return Before Fees and Expenses		Annual Expense Ratio		Cumulative Return After Fees and Expenses		Hypothetical Year- End Balance After Fees and Expenses		Annual Fees and Expenses ^(a)
1	5.00	%	0.00	%	5.00	%	$	10,500.00	$	0.00
2	10.25	%	0.00	%	10.25	%	$	11,025.00	$	0.00
3	15.76	%	0.00	%	15.76	%	$	11,576.25	$	0.00
4	21.55	%	0.00	%	21.55	%	$	12,155.06	$	0.00
5	27.63	%	0.00	%	27.63	%	$	12,762.81	$	0.00
6	34.01	%	0.00	%	34.01	%	$	13,400.95	$	0.00
7	40.71	%	0.00	%	40.71	%	$	14,071.00	$	0.00
8	47.75	%	0.00	%	47.75	%	$	14,774.55	$	0.00
9	55.13	%	0.00	%	55.13	%	$	15,513.28	$	0.00
10	62.89	%	0.00	%	62.89	%	$	16,288.94	$	0.00
Total Gain After Fees and Expenses							$	6,288.94
Total Annual Fees and Expenses Paid									$	0.00

^(a)	Annual Fees and Expenses are calculated based on the average between the beginning and ending balance for each year. All information is calculated on an annual compounding basis.

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Mortgage- and Asset-Backed Portfolio Shares

Prospectus, August 1, 2010

For More Information


By Mail:		Columbia Funds c/o Columbia Management Investment Services Corp. P.O. Box 8081 Boston, MA 02266-8081

By Telephone:		800.345.6611

Online:		www.columbiafunds.com

Annual and Semi-Annual Reports to Shareholders

Statement of Additional Information

The SAI provides more detailed information about the Portfolio and its policies. The SAI is legally part of this prospectus (incorporated by reference). A copy has been filed with the SEC.

Shareholder Communications with the Board

Information Provided by the SEC

FUNDamentals™ is a trademark of Ameriprise Financial.

The investment company registration number of Columbia Funds Series Trust, of which the Portfolio is a series, is 811-09645.

One Financial Center, Boston, MA 02111-2621

800.345.6611 www.columbiafunds.com

INT-36/[ ]-0810

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Prospectus

August 1, 2010

Columbia Funds

Columbia Georgia Intermediate Municipal Bond Fund


Ticker symbols
Class A Shares NGIMX
Class B Shares NGITX
Class C Shares NGINX

Table of Contents


Columbia Georgia Intermediate Municipal Bond Fund		3

Investment Objective		3

Fees and Expenses of the Fund		3

Principal Investment Strategies		5

Principal Risks		5

Performance Information		8

Investment Adviser and Portfolio Manager(s)		9

Purchase and Sale of Fund Shares		9

Tax Information		9

Payments to Broker-Dealers and Other Financial Intermediaries		9

Additional Investment Strategies and Policies		10

Management of the Fund		12

Primary Service Providers		12

Other Roles and Relationships of Ameriprise Financial and its Affiliates—Certain Conflicts of Interest		14

Certain Legal Matters		15

Choosing a Share Class		16

Comparison of the Share Classes		16

Sales Charges and Commissions		17

Reductions/Waivers of Sales Charges		21

Distribution and Service Fees		23

Financial Intermediary Compensation		24

Buying, Selling and Exchanging Shares		25

Share Price Determination		25

Transaction Rules and Policies		26

Opening an Account and Placing Orders		30

Distributions and Taxes		34

Financial Highlights		37

Hypothetical Fees and Expenses		40

Icons Guide

Investment Objective

Fees and Expenses of the Fund

Principal Investment Strategies

Principal Risks

Performance Information

Other Roles and Relationships of Ameriprise Financial and its Affiliates - Certain Conflicts of Interest

Columbia Georgia Intermediate Municipal Bond Fund

Investment Objective

The Fund seeks current income exempt from federal income tax and Georgia individual income tax, consistent with moderate fluctuation of principal.

Fees and Expenses of the Fund

This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $50,000 in Class A shares of eligible Columbia Funds. More information about these and other discounts is available from your financial advisor, in the Choosing a Share Class section beginning on page 16 of this prospectus and in the Purchase, Redemption and Pricing of Shares section of the Statement of Additional Information.

Shareholder Fees (fees paid directly from your investment)


	Class A Shares		Class B Shares		Class C Shares
Maximum sales charge (load) imposed on purchases, as a % of offering price	3.25	%	N/A		N/A
Maximum deferred sales charge (load) imposed on redemptions, as a % of the lower of the original purchase price or net asset value	1.00	% ^(a)	3.00	% ^(b)	1.00	% ^(c)

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)


	Class A Shares		Class B Shares		Class C Shares
Management fees	0.5	5%	0.5	5%	0.5	5%
Distribution and/or service (Rule 12b-1) fees	0.2	5%	1.0	0%	1.0	0%
Other expenses	[	]%	[	]%	[	]%
Acquired fund fees and expenses	0.0	1%	0.0	1%	0.0	1%
Total annual Fund operating expenses ^(d)	[	]%	[	]%	[	]%

^(a)	This charge applies to investors who buy $1 million or more of Class A shares and redeem them within one year of purchase, with certain limited exceptions.

^(b)	This charge decreases over time.

^(c)	This charge applies to investors who buy Class C shares and redeem them within one year of purchase, with certain limited exceptions.

^(d)	“Total annual Fund operating expenses” do not match “Net Expenses” in the Financial Highlights section of this prospectus, which does not include, among other things, fees and expenses incurred as a result of investment in shares of certain pooled investment vehicles.

Example

The following example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds.

The example illustrates the hypothetical expenses that you would incur over the time periods indicated, and assumes that:

•

you invest $10,000 in Class A, Class B or Class C shares of the Fund for the periods indicated,

•

your investment has a 5% return each year, and

•

the Fund’s total annual operating expenses remain the same as shown in the table above.

Based on the assumptions listed above, your costs would be:

1 year

3 years

5 years

10 years

Class A Shares

[

]

[

]

[

]

[

]

Class B Shares

Assuming no redemption of shares

[

]

[

]

[

]

[

]

Assuming complete redemption of shares at the end of the period

[

]

[

]

[

]

[

]

Class C Shares

Assuming no redemption of shares

[

]

[

]

[

]

[

]

Assuming complete redemption of shares at the end of the period

[

]

[

]

[

]

[

]

Remember this is an example only. Your actual costs may be higher or lower.

Portfolio Turnover

The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio turnover rate was [X]% of the average value of its portfolio.

Principal Investment Strategies

Under normal circumstances, the Fund invests at least 80% of its net assets in securities that pay interest exempt from federal income tax (but not necessarily the federal alternative minimum tax) and Georgia individual income tax. These securities are issued by or on behalf of the State of Georgia, its political subdivisions, agencies, instrumentalities and authorities, and other qualified issuers.

The Fund normally invests at least 80% of its total assets in investment grade municipal securities. Under normal circumstances, the Fund’s dollar-weighted average maturity will be between three and ten years. The Fund may invest up to 10% of its total assets in securities that, at the time of purchase, are rated below investment grade or are unrated but determined by Columbia Management Investment Advisers, LLC, the Fund’s investment adviser (the Adviser), to be of comparable quality.

The Fund may invest in derivatives, including futures, forwards, options, swap contracts, inverse floaters and other derivative instruments. The Fund may invest in derivatives for both hedging and non-hedging purposes, including, for example, to seek to enhance returns or as a substitute for a position in an underlying asset.

The Adviser evaluates a number of factors in identifying investment opportunities and constructing the Fund’s portfolio. The Adviser considers local, national and global economic conditions, market conditions, interest rate movements and other relevant factors to determine the allocation of the Fund’s assets among different issuers, industry sectors and maturities.

The Adviser, in connection with selecting individual investments for the Fund, evaluates a security based on its potential to generate income and/or capital appreciation. The Adviser considers, among other factors, the creditworthiness of the issuer of the security and the various features of the security, such as its interest rate, yield, maturity, any call features and value relative to other securities.

Principal Risks

•

Investment Strategy Risk – The Adviser uses the principal investment strategies and other investment strategies to seek to achieve the Fund’s investment objective. There is no assurance that the Fund will achieve its investment objective. Investment decisions made by the Adviser in using these strategies may not produce the returns expected by the Adviser, may cause the Fund’s shares to lose value or may cause the Fund to underperform other funds with similar investment objectives.

•

Market Risk – Market risk refers to the possibility that the market values of securities that the Fund holds will rise or fall, sometimes rapidly or unpredictably. Security values may fall because of factors affecting individual companies, industries or sectors, or the markets as a whole, reducing the value of an investment in the Fund. Accordingly, an investment in the Fund could lose money over short or even long periods. The market values of the securities the Fund holds also can be affected by changes or perceived changes in U.S. or foreign economies and financial markets, and the liquidity of these securities, among other factors. In general, equity securities tend to have greater price volatility than debt securities.

•

State-Specific Municipal Securities Risk – Securities issued by a particular state and its instrumentalities are subject to the risk of unfavorable developments in such state. The value of Fund shares may be more volatile than the value of shares of funds that invest in municipal securities of issuers in more than one state, as unfavorable developments have the potential to impact more significantly the Fund than funds that invest in municipal securities of many different states. A municipal security can be significantly affected by adverse tax, legislative, demographic or political changes as well as changes in the state’s financial or economic condition and prospects. The SAI provides greater detail about risks specific to the municipal securities of the state in which the Fund invests, which investors should carefully consider.

•

Interest Rate Risk – Debt securities are subject to interest rate risk. In general, if prevailing interest rates rise, the values of debt securities will tend to fall, and if interest rates fall, the values of debt securities will tend to rise. Changes in the value of a debt security usually will not affect the amount of income the Fund receives from it but may affect the value of the Fund’s shares. Interest rate risk is generally greater for debt securities with longer maturities/durations.

•

Credit Risk – Credit risk applies to most debt securities, but is generally not a factor for obligations backed by the “full faith and credit” of the U.S. Government. The Fund could lose money if the issuer of a debt security is unable or perceived to be unable to pay interest or repay principal when it becomes due. Various factors could affect the issuer’s actual or perceived willingness or ability to make timely interest or principal payments, including changes in the issuer’s financial condition or in general economic conditions. Debt securities backed by an issuer’s taxing authority may be subject to legal limits on the issuer’s power to increase taxes or otherwise to raise revenue, or may be dependent on legislative appropriation or government aid. Certain debt securities are backed only by revenues derived from a particular project or source, rather than by an issuer’s taxing authority, and thus may have a greater risk of default.

•

Low and Below Investment Grade Securities Risk – Debt securities with the lowest investment grade rating (e.g., BBB by Standard & Poor’s or Fitch) or that are below investment grade (which are commonly referred to as “junk bonds”) (e.g., BB or below by Standard & Poor’s, a division of the McGraw & Hill Companies, Inc. (Standard & Poor’s) or Fitch, Inc. (Fitch)) are more speculative than securities with higher ratings, and tend to be more sensitive to credit risk, particularly during a downturn in the economy, which is more likely to weaken the ability of the issuers to make principal and interest payments on these securities than is the case for higher-rated securities. These securities typically pay a premium – a higher interest rate or yield – because of the increased risk of loss, including default. These securities also are generally less liquid than higher-rated securities. The securities ratings provided by Moody’s Investors Service, Inc. (Moody’s), Standard & Poor’s and Fitch are based on analyses by these ratings agencies of the credit quality of the securities and may not take into account every risk related to whether interest or principal will be timely repaid.

•

Municipal Securities Risk – Municipal securities are debt obligations generally issued to obtain funds for various public purposes, including general financing for state and local governments, or financing for a specific project or public facility. Municipal securities may be fully or partially backed by the taxing authority of the local government, by the credit of a private issuer, by the current or anticipated revenues from a specific project or specific assets or by domestic or foreign entities providing credit support, such as letters of credit, guarantees or insurance, and are generally classified into general obligation bonds and special revenue obligations. General obligation bonds are backed by an issuer’s taxing authority and may be vulnerable to limits on a government’s power or ability to raise revenue or increase taxes. They may also depend for payment on legislative appropriation and/or funding or other support from other governmental bodies. Revenue obligations are payable from revenues generated by a particular project or other revenue source, and are typically subject to greater risk of default than general obligation bonds because investors can look only to the revenue generated by the project or other revenue source backing the project, rather than to the general taxing authority of the state or local government issuer of the obligations. Because many municipal securities are issued to finance projects in sectors such as education, health care, transportation and utilities, conditions in those sectors can affect the overall municipal market. Municipal securities pay interest that, in the opinion of bond counsel, is free from U.S. federal income tax (and, in some cases, the federal alternative minimum tax). There is no assurance that the IRS will agree with this opinion. In the event the IRS determines that the issuer does not comply with relevant tax requirements, interest payments from a security could become federally taxable, possibly retroactively to the date the security was issued, and the value of the security would likely fall. As a shareholder of the Fund, you may be required to file an amended tax return and pay additional taxes as a result.

•

might wish to terminate or to sell such positions. Over-the-counter instruments (investments not traded on an exchange) may be illiquid, and transactions in derivatives traded in the over-the-counter market are subject to the risk that the other party will not meet its obligations. The use of derivatives also involves the risks of mispricing or improper valuation and that changes in the value of the derivative may not correlate perfectly with the underlying security, asset, reference rate or index. The Fund also may not be able to find a suitable derivative transaction counterparty, and thus may be unable to engage in derivative transactions when it is deemed favorable to do so, or at all. For more information on the risks of derivative investments and strategies, see the Statement of Additional Information.

•

Changing Distribution Levels Risk – The amount of the distributions paid by the Fund generally depends on the amount of interest and/or dividends received by the Fund on the securities it holds. The Fund may not be able to pay distributions or may have to reduce its distribution level if the interest and/or dividends the Fund receives from its investments decline.

•

Reinvestment Risk – Income from the Fund’s debt securities portfolio will decline if and when the Fund invests the proceeds from matured, traded or called securities in securities with market interest rates that are below the current earnings rate of the Fund’s portfolio.

Performance Information

The following bar chart and table show you how the Fund has performed in the past, and can help you understand the risks of investing in the Fund. The Fund’s past performance (before or after taxes) is no guarantee of how the Fund will perform in the future.

Year by Year Total Return (%) as of December 31 Each Year ^*

The bar chart below shows you how the performance of the Fund’s Class A shares has varied from year to year. These returns do not reflect deductions of sales charges, if any, paid by investors and would be lower if they did.

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*	Year-to-date return as of June 30, 2010: [ ]%

Best and Worst Quarterly Returns During this Period


Best:	[ ] quarter [ ]:	[ ]%
Worst:	[ ] quarter [ ]:	[ ]%

Average Annual Total Return as of December 31, 2009


	1 year		5 years		10 years
Class A shares returns before taxes	[	]%	[	]%	[	]%
Class A shares returns after taxes on distributions	[	]%	[	]%	[	]%
Class A shares returns after taxes on distributions and sale of Fund shares	[	]%	[	]%	[	]%
Class B shares returns before taxes	[	]%	[	]%	[	]%
Class C shares returns before taxes	[	]%	[	]%	[	]%
Barclays Capital 3-15 Year Blend Municipal Bond Index (reflects no deductions for fees, expenses or taxes)	[	]%	[	]%	[	]%

Investment Adviser and Portfolio Manager(s)

Investment Adviser

Columbia Management Investment Advisers, LLC

Portfolio Manager

James D’Arcy, CFA

Manager. Service with the Fund since 2010.

Purchase and Sale of Fund Shares

Tax Information

Generally, a substantial portion of the Fund’s distributions consists of exempt-interest dividends, which are generally not taxable to you for federal income tax purposes or for purposes of the federal alternative minimum tax. A portion of the Fund’s distributions may not qualify as exempt-interest dividends; such distributions will generally be taxable to you as ordinary income or capital gains, unless you are investing through a tax-deferred arrangement, such as a 401(k) plan or an individual retirement account.

Payments to Broker-Dealers and Other Financial Intermediaries

If you purchase the Fund through a broker-dealer or other financial intermediary (such as a bank), the Fund and its related companies – including Columbia Management Investment Advisers, LLC (the Adviser), Columbia Management Investment Distributors, Inc. (the Distributor) and Columbia Management Investment Services Corp. (the Transfer Agent) – may pay the intermediary for the sale of Fund shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your financial advisor to recommend the Fund over another investment. Ask your financial advisor or visit your financial intermediary’s website for more information.

Additional Investment Strategies and Policies

This section describes certain strategies and policies that the Fund may utilize in pursuit of its investment objective, and describes some additional factors and risks involved with investing in the Fund.

Changing the Fund’s Investment Objective and Policies

The Fund’s investment objective and certain of its investment policies can be changed without shareholder approval unless otherwise stated in this prospectus or the Statement of Additional Information (SAI). Shareholders vote on changes to other investment policies that are designated as fundamental in accordance with the requirements of the Investment Company Act of 1940 (the 1940 Act).

The Fund’s policy of investing at least 80% of its “net assets” (which includes net assets plus any borrowings for investment purposes) discussed in the Principal Investment Strategies section of this prospectus may not be changed without shareholder approval.

Investment Guidelines

As a general matter, unless otherwise noted, whenever an investment policy or limitation states a percentage of the Fund’s assets that may be invested in any security or other asset, or sets forth a policy regarding an investment standard, compliance with that percentage limitation or standard will be determined solely at the time of the Fund’s acquisition of the security or asset.

Holding Other Kinds of Investments

The Fund may hold investments that aren’t part of its principal investment strategies. These investments are described in the SAI. The Fund may choose not to invest in certain securities described in this prospectus and in the SAI, although it has the ability to do so.

Investing in Money Market Funds

The Fund may invest uninvested cash, including cash collateral received in connection with its securities lending program, in shares of registered or unregistered money market funds, including funds advised by the Adviser. The Fund and its shareholders indirectly bear a portion of the expenses of any money market fund or other fund in which the Fund may invest. The Adviser and its affiliates receive fees from affiliated funds for providing advisory and other services in addition to the fees which they are entitled to receive from the Fund for services provided directly.

Lending Securities

The Fund may lend portfolio securities to approved broker/dealers or other financial intermediaries on a fully collateralized basis in order to earn additional income. The Fund may lose money from securities lending if, for example, it is delayed in or prevented from selling the collateral after the loan is made or recovering the securities loaned or if it incurs losses on the reinvestment of cash collateral. The Fund may invest some or all of the cash collateral it receives in connection with its securities lending program in one or more pooled investment vehicles, including, among other vehicles, money market funds managed by the Fund’s securities lending agent (or its affiliates). The securities lending agent shares in any income resulting from the investment of such cash collateral, and an affiliate of the securities lending agent receives asset-based fees for the management of such pooled investment vehicles, which may create a conflict of interest between the securities lending agent (or its affiliates) and the Fund with respect to the management of such cash collateral. Engaging in securities lending is subject to certain risks, including counterparty risk, which is the risk that the counterparty to a transaction could default.

Portfolio Holdings Disclosure

A description of Columbia Funds’ policies and procedures with respect to the disclosure of Fund portfolio securities is available in the SAI. The Fund discloses its portfolio holdings on the Columbia Funds’ website, www.columbiafunds.com, as described below. Once posted, the portfolio holdings information will remain available on the website until at least the date on which the Fund files a Form N-CSR or Form N-Q (forms filed with the SEC that include portfolio holdings information) for the period that includes the date as of which the information is current.

The Fund’s complete portfolio holdings as of a quarter-end are disclosed approximately 30 calendar days after such quarter-end.

In addition, more current information concerning the Fund’s portfolio holdings as of specified dates also may be disclosed on the Columbia Funds’ website.

Investing Defensively

The Fund may from time to time take temporary defensive investment positions that are inconsistent with the Fund’s

principal investment strategies in attempting to respond to adverse market, economic, political or other conditions including, for example, investments in money market instruments or holdings of cash or cash equivalents. The Fund may not achieve its investment objective while it is investing defensively.

Mailings to Households

In order to reduce shareholder expenses we may, if prior consent has been provided, mail only one copy of the Fund’s prospectus and each annual and semi-annual report to those addresses shared by two or more accounts. If you wish to receive individual copies of these documents, call 800.345.6611 or, if your shares are held through a financial intermediary, contact your intermediary directly.

Additional Information on Portfolio Turnover

A mutual fund that replaces, or turns over, more than 100% of its investments in a year is considered to have a high portfolio turnover rate. A high portfolio turnover rate can generate larger distributions of short-term capital gains to shareholders, which for individuals are generally taxable at higher rates than long-term capital gains for U.S. federal income tax purposes. A high portfolio turnover rate can also mean higher brokerage and other transaction costs, which could reduce a fund’s returns. In general, the greater the volume of buying and selling by a fund, the greater the impact that brokerage commissions will have on its returns. The Fund generally buys securities for capital appreciation, investment income or both. However, the Fund may sell securities regardless of how long they’ve been held. You’ll find the Fund’s portfolio turnover rate for its most recent fiscal year in the Fees and Expenses of the Fund — Portfolio Turnover section of this prospectus and portfolio turnover rates for prior fiscal years in the Financial Highlights section of this prospectus.

Management of the Fund

Primary Service Providers

The Adviser, which is also the Fund’s administrator, the Distributor and the Transfer Agent, all affiliates of Ameriprise Financial, Inc. (Ameriprise Financial), currently provide key services to the Fund and various other funds, including the Columbia-branded funds (Columbia Funds) and the RiverSource-, Seligman- and Threadneedle-branded funds, including investment advisory, administration, distribution, shareholder servicing and transfer agency services, and are paid for providing these services. These service relationships with respect to the Fund are described below.

The Adviser

Subject to oversight by the Board, the Adviser manages the day-to-day operations of the Fund, determines what securities and other investments the Fund should buy or sell and executes the portfolio transactions. Although the Adviser is responsible for the investment management of the Fund, the Adviser may delegate certain of its duties to one or more investment subadvisers. The Adviser may use the research and other capabilities of its affiliates and third parties in managing investments.

The Fund pays the Adviser a fee for its investment advisory services. The fee is calculated as a percentage of the average daily net assets of the Fund and is paid monthly. For the Fund’s most recent fiscal year, aggregate advisory fees paid to its investment adviser by the Fund amounted to 0.40% of average daily net assets of the Fund.

A discussion regarding the basis for the Board’s approval of the Fund’s investment advisory agreement with the Adviser is available in the Fund’s annual report to shareholders for the fiscal year ended March 31, 2010.

Subadviser(s)

The SEC has issued an order that permits the Adviser, subject to the approval of the Board, to appoint an unaffiliated subadviser or to change the terms of a subadvisory agreement for the Fund without first obtaining shareholder approval. The order permits the Fund to add or to change unaffiliated subadvisers or to change the fees paid to subadvisers from time to time without the expense and delays associated with obtaining shareholder approval of the change. The Adviser and its affiliates may have other relationships, including significant financial relationships, with current or potential subadvisers or their affiliates, which may create certain conflicts of interest. When making recommendations to the Board to appoint or to change a subadviser, or to change the terms of a subadvisory agreement, the Adviser discloses to the Board the nature of any material relationships it has with a subadviser or its affiliates.

At present, the Adviser has not engaged any investment subadviser for the Fund.

Portfolio Manager

Information about the Adviser’s portfolio manager who is primarily responsible for overseeing the Fund’s investments is shown in the table below. The SAI provides more information about the portfolio manager’s compensation, other accounts managed by the portfolio manager and the portfolio manager’s ownership of securities in the Fund.

James D’Arcy, CFA

Manager. Service with the Fund since 2010.

Portfolio manager of the Adviser. From 1999 until joining the Adviser in May 2010, Mr. D’Arcy was associated with the Fund’s previous investment adviser, Columbia Management Advisors, LLC, or its predecessors as an investment professional.

The Administrator

Columbia Management Investment Advisers, LLC (the Administrator) is responsible for overseeing the administrative operations of the Fund, including the general supervision of the Fund’s operations, the coordination of the Fund’s service providers and the provision of office facilities and related clerical and administrative services.

The Fund pays the Administrator a fee for its services, plus certain out-of-pocket expenses. The fee is calculated as an annual percentage of the Fund’s average daily net assets and is paid monthly, as follows:

Annual Administration Fee,

as a % of Average Daily Net Assets


Columbia Georgia Intermediate Municipal Bond Fund		0.15	%

The Distributor

Shares of the Fund are distributed by the Distributor. The Distributor is a registered broker/dealer and an indirect, wholly-owned subsidiary of Ameriprise Financial. The Distributor and its affiliates may pay commissions, distribution and service fees and/or other compensation to entities, including Ameriprise Financial affiliates, for selling shares and providing services to investors.

The Transfer Agent

The Transfer Agent is a registered transfer agent and a wholly-owned subsidiary of Ameriprise Financial. The Transfer Agent’s responsibilities include processing purchases, sales and exchanges, calculating and paying distributions, keeping shareholder records, preparing account statements and providing customer service. The Fund pays the Transfer Agent monthly fees on a per-account basis. Fees paid to the Transfer Agent include reimbursements for certain out-of-pocket expenses and sub-transfer agency fees, subject to certain limitations, paid by the Transfer Agent on the Fund’s behalf.

Expense Reimbursement Arrangements

The Adviser has voluntarily agreed to reimburse a portion of the Fund’s expenses so that the Fund’s ordinary operating expenses (excluding any distribution and service fees, brokerage commissions, interest, taxes and extraordinary expenses, but including custodian charges relating to overdrafts, if any), after giving effect to any balance credits from the Fund’s custodian, do not exceed 0.55% of the Fund’s average daily net assets on an annualized basis. The Adviser, in its discretion, may revise or discontinue this arrangement at any time.

Other Roles and Relationships of Ameriprise Financial and its Affiliates—Certain Conflicts of Interest

The Adviser, Administrator, Distributor and Transfer Agent, all affiliates of Ameriprise Financial, provide various services to the Fund and other Columbia Funds, as well as RiverSource-, Seligman- and Threadneedle-branded funds, for which they are compensated. Ameriprise Financial and its other affiliates may also provide other services to these funds and be compensated for them.

Conflicts of interest and limitations that could affect a Columbia Fund may arise from, for example, the following:

•

compensation and other benefits received by the Adviser and other Ameriprise Financial affiliates related to the management/administration of a Columbia Fund and the sale of its shares;

•

the allocation of, and competition for, investment opportunities among the Fund, other funds and accounts advised/managed by the Adviser and other Ameriprise Financial affiliates, or Ameriprise Financial itself and its affiliates;

•

separate and potentially divergent management of a Columbia Fund and other funds and accounts advised/managed by the Adviser and other Ameriprise Financial affiliates;

•

regulatory and other investment restrictions on investment activities of the Adviser and other Ameriprise Financial affiliates and accounts advised/managed by them;

•

insurance and other relationships of Ameriprise Financial affiliates with companies and other entities in which a Columbia Fund invests; and

•

regulatory and other restrictions relating to the sharing of information between Ameriprise Financial and its affiliates, including the Adviser, and a Columbia Fund.

Additional information about Ameriprise Financial and the types of conflicts of interest and other matters referenced above is set forth in the “Investment Advisory and Other Services – Other Roles and Relationships of Ameriprise Financial and its Affiliates – Certain Conflicts of Interest ” section of the SAI, which is identified by the icon. Investors in the Columbia Funds should carefully review these disclosures and consult with their financial advisor if they have any questions.

Certain Legal Matters

Ameriprise Financial and certain of its affiliates have historically been involved in a number of legal, arbitration and regulatory proceedings, including routine litigation, class actions and governmental actions, concerning matters arising in connection with the conduct of their business activities. Ameriprise Financial believes that the Fund is not currently the subject of, and that neither Ameriprise Financial nor any of its affiliates is the subject of, any pending legal, arbitration or regulatory proceedings that are likely to have a material adverse effect on the Fund or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Fund. Information regarding certain pending and settled legal proceedings may be found in the Fund’s shareholder reports and in the SAI. Additionally, Ameriprise Financial is required to make 10-Q, 10-K and, as necessary, 8-K filings with the SEC on legal and regulatory matters that relate to Ameriprise Financial and its affiliates. Copies of these filings may be obtained by accessing the SEC website at www.sec.gov.

Choosing a Share Class

Comparison of the Share Classes

Share Class Features

The Fund offers three classes of shares in this prospectus: Class A, Class B and Class C shares . The Fund may also offer other classes of shares through a separate prospectus. Each share class has its own investment eligibility criteria, cost structure and other features. The following summarizes the primary features of the Class A, Class B and Class C shares offered by this prospectus. Contact your financial advisor or Columbia Funds for more information about the Fund’s share classes and how to choose among them.


	Class A Shares	Class B Shares	Class C Shares
Eligible Investors and Minimum Initial Investments ^(a)	Minimum initial investments range from $0 to $2,500; the share class is available to the general public for investment.	The Fund no longer accepts investments from new or existing investors in Class B shares, except through a reinvestment of a dividend or capital gain distribution, or a permitted exchange as described in more detail under Buying, Selling and Exchanging Shares - Opening an Account and Placing Orders - Buying Shares - Class B Shares Closing .	Minimum initial investments range from $0 to $2,500; the share class is available to the general public for investment.

Investment Limits	none	up to $49,999 (based on aggregate account value) ^(b)	up to $999,999

Conversion Features	none	convert to Class A shares eight years after purchase	none

Front-End Sales Charges ^(c)	3.25% maximum, declining to 0.00% on investments of $1 million or more	none	none

Contingent Deferred Sales Charges (CDSCs) ^(c)	none, except a 1.00% CDSC applies to certain investments of between $1 million and $50 million sold within one year of purchase	3.00% maximum, gradually declining to 0.00% after four years	1.00% on investments sold within one year of purchase

Maximum Distribution and Service Fees	0.25% combined distribution and service fee	0.75% distribution fee 0.25% service fee	0.75% distribution fee 0.25% service fee

^(a)	See Buying, Selling and Exchanging Shares – Opening an Account and Placing Orders for more details on the eligible investors and investment minimums of these share classes.

^(b)

The value of your account, for this purpose, includes the value of all eligible accounts held by you and your “immediate family.” See the discussion about account value aggregation and eligible accounts in Choosing a Share Class – Reductions/Waivers of Sales Charges for more information. The amount of Class B shares purchased through a reinvestment of a dividend or capital gain distribution, or a permitted exchange is not included in the calculation to determine whether your account has reached the $49,999 limit.

^(c)	See Choosing a Share Class – Reductions/Waivers of Sales Charges for information about certain exceptions to these sales charges.

FUNDamentals ^TM

Selling and/or Servicing Agents

The terms “selling agent” and “servicing agent” refer to the financial intermediary that employs your financial advisor. Selling and/or servicing agents include, for example, brokerage firms, banks, investment advisors, third party administrators and other financial intermediaries, including Ameriprise Financial and its affiliates.

Sales Charges and Commissions

Sales charges, commissions and distribution and service fees (discussed in a separate sub-section below) compensate selling and/or servicing agents, and typically your financial advisor, for selling shares to you and for maintaining and servicing the shares held in your account. These charges, commissions and fees are intended to provide incentives for selling and/or servicing agents to provide these services.

Depending on which share class you choose you will pay these charges either at the outset as a front-end sales charge, at the time you sell your shares as a contingent deferred sales charge and/or over time in the form of increased ongoing fees. Whether the ultimate cost is higher for one class over the other depends on how long you hold your shares.

Class A Shares—Front-End Sales Charge

You’ll pay a front-end sales charge when you buy Class A shares unless you qualify for a waiver of the sales charge or you buy the shares through reinvested distributions. See Choosing a Share Class – Reductions/Waivers of Sales Charges for more information.

FUNDamentals ^TM

Front-End Sales Charge Calculation

The following table presents the front-end sales charge as a percentage of both the offering price and the net amount invested.

•

The offering price per share is the net asset value per share plus any front-end sales charge that applies.

•

The net asset value (or NAV) per share is the price of a share calculated by the Fund every business day.

The dollar amount of the sales charge is the difference between the offering price of the shares you buy(based on the applicable sales charge in the table) and the net asset value of those shares.

To determine the front-end sales charge you will pay when you buy your shares, the Fund will add the amount of your investment to the value of your account and base the sales charge on the aggregate amount. This approach is designed to assure that you pay the lowest applicable sales charge possible. See Choosing a Share Class – Reductions/Waivers of Sales Charges for a discussion of account value aggregation.

The front-end sales charge you’ll pay on Class A shares:

•

depends on the amount you’re investing (generally, the larger the investment, the smaller the percentage sales charge), and

•

is based on the total amount of your purchase and the value of your account.

Class A Shares—Front-End Sales Charge—Breakpoint Schedule


Dollar amount of shares bought ^(a)	Sales charge as a % of the offering price ^(b)		Sales charge as a % of the net amount invested ^(b)		Amount retained by or paid to selling and/or servicing agents as a % of the offering price
$0 – $99,999	3.25	%	3.36	%	3.00	%
$100,000 – $249,999	2.50	%	2.56	%	2.25	%
$250,000 – $499,999	2.00	%	2.04	%	1.75	%
$500,000 – $999,999	1.50	%	1.52	%	1.25	%
$1,000,000 or more	0.00	%	0.00	%	1.00	% ^(c)(d)

^(a)	Purchase amounts and account values are aggregated among all eligible Columbia Fund accounts for the purposes of this table.

^(b)

Because the offering price is calculated to two decimal places, the dollar amount of the sales charge as a percentage of the offering price and your net amount invested for any particular purchase of Fund shares may be higher or lower depending on whether downward or upward rounding was required during the calculation process.

^(c)

1.00% on purchases from $1 million up to $3 million, 0.50% on purchases of $3 million up to $50 million and 0.25% on amounts of $50 million or more. The Distributor pays selling and/or servicing agents on investments of $1 million or more, but may be reimbursed if a CDSC is deducted when the shares are sold.

^(d)	For certain group retirement plans, selling and/or servicing agents are eligible to receive a 1.00% commission from the Distributor on all purchases up to $3 million, including those in amounts of less than $1 million that are coded as commission-eligible trades.

Class A Shares—CDSC and Commissions

In some cases, you’ll pay a CDSC if you sell Class A shares that you bought without an initial sales charge.

•

If you bought Class A shares without an initial sales charge because your accounts aggregated $1 million to $50 million at the time of purchase, you will incur a 1.00% CDSC if you redeem those shares within one year of buying them.

•

Subsequent Class A share purchases that bring your aggregate account value to $1 million or more (but less than $50 million) will also be subject to a CDSC if you redeem them within one year of buying them.

The CDSC on Class A shares:

•

is applied to the net asset value at the time of your purchase or sale, whichever is lower, and

•

will not be applied to any shares you receive through reinvested distributions.

For purposes of calculating the CDSC, the start of the holding period is the first day of the month in which the purchase was made. When you place an order to sell your Class A shares, the Fund will first redeem any shares that aren’t subject to a CDSC followed by those you have held the longest. The CDSC on Class A shares does not apply to retirement plans buying through a fee-based program.

The Distributor may pay your selling and/or servicing agent an up-front commission of up to 3.00% of the offering price per share when you buy Class A shares. The Distributor funds the commission through the applicable sales charge.

The Distributor may also pay your selling and/or servicing agent a cumulative commission when you buy $1 million or more of Class A shares, according to the following schedule:

Class A Shares—Commission Schedule


Purchase Amount	Commission Level (as a % of net asset value per share)
$1 million – $2,999,999	1.00	%
$3 million – $49,999,999	0.50	%
$50 million or more	0.25	%

FUNDamentals ^TM

Contingent Deferred Sales Charge

A contingent deferred sales charge or CDSC is a sales charge applied at the time you sell your shares, unlike a front-end sales charge that is applied at the time of purchase. A CDSC varies based on the length of time that you have held your shares.

Class B and Class C Shares—Sales Charges

You don’t pay a front-end sales charge when you buy Class B or Class C shares, but you may pay a CDSC when you sell Class B or Class C shares.

The CDSC on Class B and Class C shares:

•

is applied to the net asset value at the time of your purchase or sale, whichever is lower,

•

will not be applied to any shares you receive through reinvested distributions, and

•

generally declines each year until there is no sales charge for selling shares.

For purposes of calculating the CDSC, the start of the holding period is the first day of the month in which your purchase was made. When you place an order to sell your Class B or Class C shares, the Fund will first redeem any shares that aren’t subject to a CDSC followed by those you have held the longest.

Class B Shares—CDSC and Commissions

You’ll pay a CDSC if you sell Class B shares unless you qualify for a waiver of the CDSC or the shares you’re selling were bought through reinvested distributions. See Choosing a Share Class—Reductions/Waivers of Sales Charges for details. The CDSC you pay on Class B shares depends on how long you’ve held your shares:

Class B Shares—CDSC Schedule


Number of Years Class B Shares Held		Applicable CDSC
One		3.00%
Two		3.00%
Three		2.00%
Four		1.00%
Five		none
Six		none
Seven		none
Eight		none
Nine		Conversion to Class A Shares

If you are an investor who purchased Class B shares prior to their closing (except for certain limited transactions), the Distributor paid an up-front commission directly to your selling and/or servicing agent of up to 2.75% of the net asset value per share when you bought the Class B shares. The Distributor continues to seek to recover this commission through distribution fees it receives under the Fund’s distribution plan and any applicable CDSC paid when you sell your shares. See Choosing a Share Class – Distribution and Service Fees for details.

Class B shares automatically convert to Class A shares after you’ve owned them for eight years. This conversion feature allows you to benefit from the lower operating costs of Class A shares, which can help increase your total returns from an investment in the Fund.

The following rules apply to the conversion of Class B shares to Class A shares:

•

Class B shares are converted on or about the 15th day of the month that they become eligible for conversion.

•

Any shares you received from reinvested distributions on these shares generally will convert to Class A shares at the same time.

•

You’ll receive the same dollar value of Class A shares as the Class B shares that were converted. Class B shares that you received from an exchange of Class B shares of another Columbia Fund will convert based on the day you bought the original shares.

•

No sales charge or other charges apply, and conversions are free from U.S. federal income tax.

Class C Shares—CDSC and Commissions

You’ll pay a CDSC of 1.00% if you sell Class C shares within one year of buying them unless you qualify for a waiver of the CDSC or the shares you’re selling were bought through reinvested distributions. See Choosing a Share Class – Reductions/Waivers of Sales Charges for details.

The Distributor pays an up-front commission directly to your selling and/or servicing agent of up to 1.00% of the net asset value per share when you buy Class C shares. The Distributor seeks to recover this commission through distribution fees it receives under the Fund’s distribution plan and any applicable CDSC applied when you sell your shares. See Choosing a Share Class – Distribution and Service Fees for details.

Reductions/Waivers of Sales Charges

Front-End Sales Charge Reductions

There are two ways in which you may be able to reduce the front-end sales charge that you may pay when you buy Class A shares of the Fund. These types of sales charge reductions are also referred to as breakpoint discounts.

First, through the right of accumulation, you may combine the value of eligible accounts maintained by you and your immediate family to reach a breakpoint discount level and apply a lower sales charge to your purchase. To calculate the combined value of your accounts, the Fund will use the current public offering price per share.

Second, by making a statement of intent to purchase additional shares, you may pay a lower sales charge on all purchases of Class A shares made within 13 months of the date of your statement of intent. Your statement of intent must state the aggregate amount of purchases you intend to make in that 13-month period, which must be at least $50,000. If you do not complete the purchases described in your statement of intent within 13 months, you will be charged the applicable sales charge on the amount you have invested to that date. To calculate the total value of the purchases you’ve made under a statement of intent, the Fund will use the historic cost (i.e. dollars invested) of the shares held in each eligible account.

To obtain a breakpoint discount, you must notify your financial advisor in writing at the time you buy your shares of each eligible account maintained by you and/or your immediate family. It is the responsibility of you and your financial advisor to ensure that you receive discounts for which you are eligible; the Fund is not responsible for a financial advisor’s failure to apply the eligible discount to your account. You may be asked by your financial advisor for account statements or other records to verify your discount eligibility, including, when applicable, records for accounts opened with a different financial advisor and records of accounts established by members of your immediate family.

FUNDamentals ^TM

Your “Immediate Family” and Account Value Aggregation

For purposes of obtaining a Class A shares breakpoint discount, the value of your account will be deemed to include the value of all applicable shares in eligible accounts that are held by your “immediate family,” which includes your spouse (or legal equivalent under state law), parent, step-parent, legal guardian, child, step-child, father-in-law and mother-in-law. Remember that in order to obtain a breakpoint discount, you must notify your financial advisor in writing at the time you buy your shares of each eligible account maintained by you and/or your immediate family. Group plan accounts are valued at the plan level.

Eligible Accounts

The types of accounts that are eligible for the account value aggregation purposes described above are:

•

individual accounts,

•

joint accounts,

•

certain IRA accounts,

•

certain health savings accounts,

•

certain trust accounts, and

•

Uniform Gifts to Minors Act (UGMA)/Uniform Transfers to Minors Act (UTMA) accounts.

Eligible accounts include those registered in the name of the broker/dealer or other financial intermediary through which you own shares of the Columbia Funds. Only shares of eligible Columbia Funds that are held in your Columbia Funds account will be considered for purposes of determining any fee reductions or waivers of sales charges for which you may be eligible. Shares of RiverSource-, Seligman- and Threadneedle-branded funds are not eligible for aggregation, other than shares of the RiverSource Cash Management Fund, which are eligible for aggregation only if they were acquired through an exchange for shares of a Columbia Fund.

Eligible accounts do not include Class R share accounts or accounts holding shares of money market funds that used the Columbia brand before May 1, 2010.

Front-End Sales Charge Waivers

Certain investors may buy Class A shares of the Fund at net asset value, without any front-end sales charge that would otherwise apply. These investors include affiliates of the Fund, broker/dealers, investors in wrap fee programs, investors through fee-based advisors, certain retirement plans, certain health savings accounts, certain shareholders of funds that were reorganized into Columbia Funds, investors using the proceeds of sales of Fund shares or of certain trust or similar accounts held with Bank of America Corporation (Bank of America) or its affiliates, as well as insurance company separate accounts purchasing for the benefit of group retirement plans. Restrictions may apply to certain accounts and certain transactions.

CDSC Waivers

You may be able to avoid an otherwise applicable CDSC when you sell Class A, Class B or Class C shares of the Fund. This could happen because of the way in which you originally invested in the Fund, because of your relationship with the Columbia Funds or for other reasons.

Generally, a CDSC that would otherwise be applied may be waived for certain sales, including sales made under the Systematic Withdrawal Plan or in connection with the death or post-purchase disability of a shareholder; certain medical expenses; charitable gifts; involuntary sales; and agreements by selling and/or servicing agents to waive or return their commissions. Restrictions may apply to certain accounts and certain transactions.

The Fund may change or cancel these terms at any time. Any change or cancellation applies only to future purchases.

For more information about the sales charge reductions and waivers described here, consult the SAI.

Distribution and Service Fees

Pursuant to Rule 12b-1 under the 1940 Act, the Board has approved, and the Fund has adopted, distribution and shareholder servicing plans which set the distribution and service fees that are periodically deducted from the Fund’s assets. These fees are calculated daily, may vary by share class and are intended to compensate the Distributor and/or eligible selling and/or servicing agents for selling shares of the Fund and providing services to investors. Because the fees are paid out of the Fund’s assets on an ongoing basis, they will increase the cost of your investment over time.

The table below shows the maximum annual distribution and service fees (as an annual % of average daily net assets) and the combined amount of such fees applicable to each share class:

Distribution and Service (Rule 12b-1) Fees


	Distribution Fee		Service Fee		Combined Total
Class A	—	^(a)	—	^(a)	0.25	% ^(a)
Class B	0.75	%	0.25	%	1.00	%
Class C	0.75	%	0.25	%	1.00	%

^(a)	The Fund’s Class A shares pay a combined distribution and service fee pursuant to the Fund’s combined distribution and shareholder servicing plan for Class A shares.

The Fund will pay these fees to the Distributor and/or to eligible selling and/or servicing agents for as long as the distribution and/or shareholder servicing plans continue in effect. The Fund may reduce or discontinue payments at any time. Your selling and/or servicing agent may also charge you other fees for providing services to your account, which may be different from those described here.

Financial Intermediary Compensation

The Distributor and the Adviser make payments, from their own resources, to certain financial intermediaries, including other Ameriprise Financial affiliates, for marketing/sales support services relating to the Columbia Funds. Such payments are generally based upon one or more of the following factors: average net assets of the Columbia Funds sold by the Distributor attributable to that intermediary, gross sales of the Columbia Funds distributed by the Distributor attributable to that intermediary, reimbursement of ticket charges (fees that an intermediary firm charges its representatives for effecting transactions in Fund shares) or a negotiated lump sum payment. While the financial arrangements may vary for each intermediary, the support payments to any one intermediary are generally between 0.05% and 0.50% on an annual basis for payments based on average net assets of the Fund attributable to the intermediary, and between 0.05% and 0.25% on an annual basis for firms receiving a payment based on gross sales of the Columbia Funds attributable to the intermediary.

These payments for shareholder servicing support vary by financial intermediary but generally are not expected, with certain limited exceptions, to exceed 0.40% of the average aggregate value of the Fund’s shares in any financial intermediary’s program on an annual basis for those classes of shares that pay a service fee pursuant to a plan under Rule 12b-1 under the 1940 Act, and 0.45% of the average aggregate value of the Fund’s shares in any financial intermediary’s program on an annual basis for those classes of shares that do not pay a service fee pursuant to a plan under Rule 12b-1 under the 1940 Act.

The Board has authorized the Fund to reimburse the Transfer Agent for amounts paid to financial intermediaries that maintain assets in omnibus accounts, subject to an annual cap of (i) 0.15% of the average aggregate value of the Fund’s shares maintained in such accounts for financial intermediaries that seek payment by the Transfer Agent based on a percentage of net assets or (ii) up to $22.36 per account for financial intermediaries that seek payment by the Transfer Agent on a per account basis. The amounts in excess of that reimbursed by the Fund are borne by the Distributor or the Adviser. The Distributor and the Adviser may make other payments or allow promotional incentives to broker/dealers to the extent permitted by SEC and Financial Industry Regulatory Authority (FINRA) rules and by other applicable laws and regulations.

Amounts paid by the Distributor and the Adviser and their affiliates are paid out of the Distributor’s and the Adviser’s own resources and do not increase the amount paid by you or the Fund. You can find further details about the payments made by the Distributor and the Adviser and their affiliates and the services provided by financial intermediaries as well as a list of the intermediaries to which the Distributor and the Adviser have agreed to make marketing support payments in the SAI. Your financial intermediary may charge you fees and commissions in addition to those described in this prospectus. You should consult with your financial intermediary and review carefully any disclosure your financial intermediary provides regarding its services and compensation. Depending on the financial arrangement in place at any particular time, a financial intermediary and its financial consultants may have a financial incentive for recommending the Fund or a particular share class over others. See Management of the Fund – Other Roles and Relationships of Ameriprise Financial and its Affiliates – Certain Conflicts of Interest for more information.

Buying, Selling and Exchanging Shares

Share Price Determination

The price you pay or receive when you buy, sell or exchange shares is the Fund’s next determined net asset value (or NAV) per share for a given share class. The Fund calculates the net asset value per share for each class of the Fund at the end of each business day.

FUNDamentals ^TM

NAV Calculation

Each of the Fund’s share classes calculates its NAV as follows:


		(Value of assets of the share class)
NAV	=	—(Liabilities of the share class)
		Number of outstanding shares of the class

The value of the Fund’s shares is based on the total market value of all of the securities and other assets that it holds as of a specified time. The prices reported on stock exchanges and other securities markets around the world are usually used to value securities in the Fund. The Fund uses the amortized cost method, which approximates market value, to value short-term investments maturing in 60 days or less.

If a market price isn’t readily available, the Fund will determine the price of the security held by the Fund based on the Adviser’s determination of the security’s fair value. A market price is considered not readily available if, among other circumstances, the most recent reported price is deemed unreliable. In addition, the Fund may use fair valuation to price securities that trade on a foreign exchange when a significant event has occurred after the foreign exchange closes but before the time at which the Fund’s share price is calculated. Foreign exchanges typically close before the time at which Fund share prices are calculated, and may be closed altogether on some days when the Fund is open. Such significant events affecting a foreign security may include, but are not limited to: (1) those impacting a single issuer; (2) governmental action that affects securities in one sector or country; (3) natural disasters or armed conflicts affecting a country or region; or (4) significant domestic or foreign market fluctuations. The Fund uses various criteria, including an evaluation of U.S. market moves after the close of foreign markets, in determining whether a security’s market price is readily available and, if not, the fair value of the security.

Fair valuation may have the effect of reducing stale pricing arbitrage opportunities presented by the pricing of Fund shares. However, when the Fund uses fair valuation to price securities, it may value those securities higher or lower than another mutual fund. Also, the use of fair valuation may cause the Fund’s performance to diverge to a greater degree from the performance of various benchmarks used to compare the Fund’s performance because benchmarks generally do not use fair valuation techniques. Because of the judgment involved in fair valuation decisions, there can be no assurance that the value ascribed to a particular security is accurate. The Fund has retained an independent fair valuation pricing service to assist in the fair valuation process for foreign securities. International markets are sometimes open on days when U.S. markets are closed, which means that the value of foreign securities owned by the Fund could change on days when Fund shares cannot be bought or sold.

Transaction Rules and Policies

Remember that sales charges may apply to your transactions. You should also ask your selling and/or servicing agent about its rules, fees and policies for buying, selling and exchanging shares, which may be different from those described here, and about its related programs or services.

Also remember that the Fund may refuse any order to buy or exchange shares. If this happens, we’ll return any money we’ve received, but no interest will be paid on that money.

Order Processing

Orders to buy, sell or exchange shares are processed on business days. Orders can be delivered by mail, by telephone or online. Orders received in “good form” by the Transfer Agent or your selling and/or servicing agent before the end of a business day will receive that day’s net asset value per share. Orders received after the end of a business day will receive the next business day’s net asset value per share. The market value of the Fund’s investments may change between the time you submit your order and the time the Fund next calculates its net asset value per share. The business day that applies to your order is also called a trade date.

FUNDamentals ^TM

Business Days

A business day is any day that the New York Stock Exchange (NYSE) is open. A business day ends at the close of regular trading on the NYSE, usually at 4:00 p.m. Eastern time. If the NYSE closes early, the business day ends as of the time the NYSE closes. On holidays and other days when the NYSE is closed, the Fund’s net asset value is not calculated and the Fund does not accept buy or sell orders. However, the value of the Fund’s assets may still be affected on such days to the extent that the Fund holds foreign securities that trade on days that foreign securities markets are open.

“Good Form”

An order is in “good form” if the Transfer Agent or your selling and/or servicing agent has all of the information and documentation it deems necessary to effect your order. For example, when you sell shares by letter of instruction, “good form” means that your letter has (i) complete instructions and the signatures of all account owners, (ii) a Medallion signature guarantee for amounts equal to or greater than $100,000 and (iii) any other required documents completed and attached. For the documents required for sales by corporations, agents, fiduciaries, surviving joint owners and other legal entities, call 800.345.6611.

Medallion Signature Guarantees

Written Transactions

Once you have an account, you can communicate written buy, sell and exchange orders to the Transfer Agent at the following address: Columbia Funds, c/o Columbia Management Investment Services Corp., P.O. Box 8081, Boston, MA 02266-8081.

Telephone Transactions

Once you have an account, you may place orders to buy, sell or exchange shares by telephone. To place orders by telephone, call 800.422.3737. Have your account number and taxpayer identification number (TIN) available when calling.

Telephone orders may not be as secure as written orders. Columbia Funds will take reasonable steps to confirm that telephone instructions are genuine. For example, we require

proof of your identification before we will act on instructions received by telephone and may record telephone conversations. However, the Fund and its agents will not be responsible for any losses, costs or expenses resulting from an unauthorized telephone instruction when reasonable steps have been taken to confirm that telephone instructions are genuine. Telephone orders may be difficult to complete during periods of significant economic or market change or business interruption.

Online Transactions

Once you have an account, contact Columbia Funds at 800.345.6611 for more information on account trading restrictions and the special sign-up procedures required for online transactions. The Transfer Agent has procedures in place to authenticate electronic orders you deliver through the internet. You will be required to accept the terms of an online agreement and to establish and utilize a password in order to access online account services.

You can sell up to an aggregate of $100,000 of shares through the internet in any 30-day period if you qualify for internet orders.

Customer Identification Program

Federal law requires the Fund to obtain and record specific personal information to verify your identity when you open an account. This information may include your name, address, date of birth (for individuals) and taxpayer or other government issued identification. If you fail to provide the requested information, the Fund may need to delay the date of your purchase or may be unable to open your account, which may result in a return of your investment monies. In addition, if the Fund is unable to verify your identity after your account is open, the Fund reserves the right to close your account or to take other steps as deemed reasonable. The Fund shall not be held liable for any loss resulting from any purchase delay, application rejection or account closure due to a failure to provide proper identifying information.

Small Account Policy—Accounts Below $250

Columbia Funds generally will automatically sell your shares if the value of your account (treating each account of the Fund you own separately from any other account of the Fund you may own) falls below $250. If your shares are sold, the Transfer Agent will remit the sale proceeds to you. Any otherwise applicable CDSC will not be imposed on such an automatic sale of your shares. The Transfer Agent will send you written notification in advance of any automatic sale, which will provide details on how you may avoid such an automatic sale. Generally, you may avoid such an automatic sale by raising your account balance, consolidating your accounts through an exchange of shares of another Columbia Fund in which you hold shares or setting up a Systematic Investment Plan. Contact the Transfer Agent, review our website at www.columbiafunds.com, call 800.345.6611 or contact your financial advisor for more information. The automatic sale of shares of accounts valued at less than $250 is expected to take place in the second quarter of each calendar year.

Columbia Funds also may sell your shares if a financial intermediary tells us to sell your shares pursuant to arrangements made with you, and under certain other circumstances allowed under the 1940 Act.

Small Account Policy—Minimum Balance Fee

If the value of your account (treating each account of the Fund you own separately from any other account of the Fund you may own) falls below the minimum initial investment requirement applicable to you, your account generally will be subject to a $20 annual fee. This fee will be assessed through the automatic sale of shares in your account. Any otherwise applicable CDSC will not be imposed on such an automatic sale of your shares. The Transfer Agent will reduce the expenses paid by the Fund by any amounts it collects from the assessment of this fee. For Funds that do not have transfer agency expenses against which to offset the amount collected through assessment of this fee, the fee will be paid directly to the Fund. The Transfer Agent will send you written notification in advance of assessing any fee, which will provide details on how you can avoid the imposition of such fee. Generally, you may avoid the imposition of such fee by raising your account balance, consolidating your accounts through an exchange of shares of another Columbia Fund in which you hold shares, or setting up a Systematic Investment Plan. Contact the Transfer Agent, review our website at www.columbiafunds.com, call 800.345.6611 or contact your financial advisor for more information.

Columbia Funds reserves the right to change the minimum investment requirements for any Fund. We also reserve the right to lower the account size trigger point for the minimum balance fee in any year or for any class of shares when we believe it is appropriate to do so in light of declines in the

market value of Fund shares, sales loads applicable to a particular class of shares, or for other reasons.

Exceptions to the Above Small Account Policy (Accounts Below $250 and Minimum Balance Fee)

The automatic sale of shares of accounts under $250 and the annual minimum balance fee described previously do not apply to shareholders of Class R shares or shareholders holding their shares through broker/dealer networked accounts; wrap fee and omnibus accounts; accounts with active Systematic Investment Plans; and certain qualified retirement plans and health savings accounts. The automatic sale of shares of accounts under $250 does not apply to individual retirement plans.

Small Account Policy—Broker/Dealer and Wrap Fee Accounts

Columbia Funds may automatically redeem shares at any time from broker/dealer networked accounts and wrap fee accounts that have account balances of $20 or less or that have less than one share.

Cash Flows

The timing and magnitude of cash inflows from investors buying Fund shares could prevent the Fund from always being fully invested. Conversely, the timing and magnitude of cash outflows to investors selling Fund shares could require large ready reserves of uninvested cash to meet shareholder redemptions. Either situation could adversely impact the Fund’s performance.

Information Sharing Agreements

As required by Rule 22c-2 under the 1940 Act, the Columbia Funds or certain of their service providers will enter into information sharing agreements with financial intermediaries, including participating life insurance companies and financial intermediaries that sponsor or offer retirement plans through which shares of the Columbia Funds are made available for purchase. Pursuant to Rule 22c-2, financial intermediaries are required, upon request, to: (i) provide shareholder account and transaction information and (ii) execute instructions from the Fund to restrict or prohibit further purchases of Fund shares by shareholders who have been identified by the Fund as having engaged in transactions that violate the Fund’s excessive trading policies and procedures. See Buying, Selling and Exchanging Shares – Excessive Trading Practices for more information.

Excessive Trading Practices

Right to Reject or Restrict Share Transaction Orders – The Fund is intended for investors with long-term investment purposes and is not intended as a vehicle for frequent trading activity (market timing) that is excessive. Investors should transact in Fund shares primarily for investment purposes. The Board has adopted excessive trading policies and procedures that are designed to deter excessive trading by investors (the Excessive Trading Policies and Procedures). The Fund discourages and does not accommodate excessive trading.

The Fund reserves the right to reject, without any prior notice, any buy or exchange order for any reason, and will not be liable for any loss resulting from rejected orders. For example, the Fund may in its discretion restrict or reject a buy or exchange order even if the transaction is not subject to the specific exchange limitation described below if the Fund or its agents determine that accepting the order could interfere with efficient management of the Fund’s portfolio or is otherwise contrary to the Fund’s best interests. The Excessive Trading Policies and Procedures apply equally to buy or exchange transactions communicated directly to the Transfer Agent and to those received by selling and/or servicing agents.

Specific Buying and Exchanging Limitations – If the Fund detects that an investor has made two “material round trips” in any 28-day period, it will generally reject the investor’s future buy orders, including exchange buy orders, involving any Columbia Fund.

For these purposes, a “round trip” is a purchase or exchange into the Fund followed by a sale or exchange out of the Fund, or a sale or exchange out of the Fund followed by a purchase or exchange into the Fund. A “material” round trip is one that is deemed by the Fund to be material in terms of its amount or its potential detrimental impact on the Fund. Independent of this limit, the Fund may, in its discretion, reject future buy orders by any person, group or account that appears to have engaged in any type of excessive trading activity.

distribution redemptions. They may be modified or rescinded for accounts held by certain retirement plans to conform to plan limits, for considerations relating to the Employee Retirement Income Security Act of 1974 or regulations of the Department of Labor, and for certain asset allocation or wrap programs. Accounts known to be under common ownership or control generally will be counted together, but accounts maintained or managed by a common intermediary generally will not be considered to be under common ownership or control. The Fund retains the right to modify these restrictions at any time without prior notice to shareholders.

Limitations on the Ability to Detect and Prevent Excessive Trading Practices – The Fund takes various steps designed to detect and prevent excessive trading, including daily review of available shareholder transaction information. However, the Fund receives buy, sell and exchange orders through financial intermediaries, and cannot always know of or reasonably detect excessive trading that may be facilitated by financial intermediaries or by the use of the omnibus account arrangements they offer. Omnibus account arrangements are common forms of holding shares of mutual funds, particularly among certain financial intermediaries such as broker/ dealers, retirement plans and variable insurance products. These arrangements often permit financial intermediaries to aggregate their clients’ transactions and accounts, and in these circumstances, the identity of the shareholders is often not known.

Some financial intermediaries apply their own restrictions or policies to underlying investor accounts, which may be more or less restrictive than those described here. This may impact the Fund’s ability to curtail excessive trading, even where it is identified. For these and other reasons, it is possible that excessive trading may occur despite the Fund’s efforts to detect and prevent it.

Although these restrictions and policies involve judgments that are inherently subjective and may involve some selectivity in their application, the Fund seeks to act in a manner that it believes is consistent with the best interests of shareholders in making any such judgments.

Risks of Excessive Trading – Excessive trading creates certain risks to the Fund’s long-term shareholders and may create the following adverse effects:

•

negative impact on the Fund’s performance;

•

potential dilution of the value of the Fund’s shares;

•

interference with the efficient management of the Fund’s portfolio, such as the need to maintain undesirably large cash positions, the need to use its line of credit or the need to buy or sell securities it otherwise would not have bought or sold;

•

losses on the sale of investments resulting from the need to sell securities at less favorable prices;

•

increased taxable gains to the Fund’s remaining shareholders resulting from the need to sell securities to meet sell orders; and

•

increased brokerage and administrative costs.

To the extent that the Fund invests significantly in foreign securities traded on markets that close before the Fund’s valuation time, it may be particularly susceptible to dilution as a result of excessive trading. Because events may occur after the close of foreign markets and before the Fund’s valuation time that influence the value of foreign securities, investors may seek to trade Fund shares in an effort to benefit from their understanding of the value of foreign securities as of the Fund’s valuation time. This is often referred to as price arbitrage. The Fund has adopted procedures designed to adjust closing market prices of foreign securities under certain circumstances to reflect what the Fund believes to be the fair value of those securities as of its valuation time. To the extent the adjustments don’t work fully, investors engaging in price arbitrage may cause dilution in the value of the Fund’s shares held by other shareholders.

Similarly, to the extent that the Fund invests significantly in thinly traded high-yield bonds (junk bonds) or equity securities of small-capitalization companies, because these securities are often traded infrequently, investors may seek to trade their shares in an effort to benefit from their understanding of the value of these securities. This is also a type of price arbitrage. Any such frequent trading strategies may interfere with efficient management of the Fund’s portfolio to a greater degree than would be the case for mutual funds that invest in highly liquid securities, in part because the Fund may have difficulty selling those portfolio securities at advantageous times or prices to satisfy large and/or frequent sell orders. Any successful price arbitrage may also cause dilution in the value of Fund shares held by other shareholders.

Opening an Account and Placing Orders

Columbia Funds encourages you to consult with a financial advisor who can help you with your investment decisions and who can help you open an account. Once you have an account, you can buy, sell and exchange shares by contacting your financial advisor who will send your order to the Transfer Agent or your selling and/or servicing agent. As described in Buying, Selling and Exchanging Shares – Transaction Rules and Policies , once you have an account you can also communicate your orders directly to the Transfer Agent by mail, by telephone or online.

Buying Shares

Eligible Investors

Class A and Class C shares are available to the general public for investment. Once you have opened an account, you can buy Class A and Class C shares in a lump sum, through our Systematic Investment Plan, by dividend diversification, by wire or by electronic funds transfer.

Class B Shares Closing

The Fund no longer accepts investments from new or existing investors in Class B shares, except for certain limited transactions involving existing investors in Class B shares as described in more detail below.

Additional Class B shares will be issued only to existing investors in Class B shares and only through the following two types of transactions (Qualifying Transactions):

•

Dividends and/or capital gain distributions may continue to be reinvested in Class B shares of the Fund.

•

Shareholders invested in Class B shares of the Fund may exchange those shares for Class B shares of other Columbia Funds offering such shares.

Any initial purchase orders for the Fund’s Class B shares will be rejected (other than through a Qualifying Transaction that is an exchange transaction).

Unless contrary instructions are received in advance by the Fund, purchase orders (except those submitted by a financial intermediary through the National Securities Clearing Corporation (NSCC) as described in more detail below) for additional Class B shares of the Fund received from existing investors in Class B shares, including orders made through an active systematic investment plan, will be invested in Class A shares of the Fund, without regard to the normal minimum initial investment for Class A shares, but subject to the front-end sales charge that generally applies to Class A shares. See Choosing a Share Class – Class A Shares – Front-end Sales Charge for additional information.

Additional purchase orders for a Fund’s Class B shares by an existing Class B shareholder, submitted by such shareholder’s financial intermediary through the NSCC, will be rejected due to operational limitations of the NSCC. Investors should consult their financial advisor if they wish to invest in the Fund by purchasing a share class of the Fund other than Class B shares.

In addition, dividend and/or capital gain distributions from Class B shares of a Columbia Fund will no longer be automatically invested in Class B shares of another Columbia Fund. Unless contrary instructions are received in advance of the date of declaration, such dividend and/or capital gain distributions from Class B shares of a Columbia Fund will be reinvested in Class B shares of the same Columbia Fund that is making the distribution.

Minimum Initial Investments

The minimum initial investment for Class A and Class C shares is $2,500 for regular accounts and $1,000 for individual retirement plans (including traditional IRAs, Roth IRAs and Coverdell Education Savings Accounts) and non-omnibus group retirement plans. For investors establishing a Systematic Investment Plan, the minimum initial investment is $50. There is no minimum initial investment for Class A or Class C shares bought through omnibus accounts, wrap accounts or health savings accounts, although your selling and/or servicing agent may impose its own investment minimum. For group retirement plans, the minimum initial investment and minimum additional investment are determined based on the plan’s investment rather than that of its individual participants.

Minimum Additional Investments

There is no minimum additional investment for Class A or Class C shares.

Systematic Investment Plan

The Systematic Investment Plan allows you to make regular purchases in amounts of $50 or more via automatic transfers from your bank account to the Fund on a monthly, quarterly or semi-annual basis. Contact the Transfer Agent or your financial advisor to set up the plan.

Dividend Diversification

Generally, you may automatically invest distributions made by another Columbia Fund into the same class of shares (and in some cases certain other classes of shares) of the Fund at no additional sales charge. A sales charge may apply when you invest distributions made by a Columbia Fund that were not assessed a sales charge at the time of your initial purchase. Call Columbia Funds at 800.345.6611 for details. See Buying, Selling and Exchanging Shares – Opening an Account and Placing Orders – Buying Shares – Class B Shares Closing for restrictions applicable to Class B shares.

Wire Purchases

You may buy Class A or Class C shares of the Fund by wiring money from your bank account to your Fund account by calling the Transfer Agent at 800.422.3737.

Electronic Funds Transfer

You may buy Class A or Class C shares of the Fund by electronically transferring money from your bank account to your Fund account by calling the Transfer Agent at 800.422.3737. An electronic funds transfer may take up to three business days to settle and be considered in “good form.” You must set up this feature by contacting the Transfer Agent prior to your request to obtain any necessary forms.

Other Purchase Rules You Should Know

•

Once the Transfer Agent or your selling and/or servicing agent receives your buy order in “good form,” your purchase will be made at the next calculated public offering price per share, which is the net asset value per share plus any sales charge that applies.

•

You generally buy Class A shares at the public offering price per share because purchases of Class A shares are generally subject to a front-end sales charge.

•

You buy Class B and Class C shares at net asset value per share because no front-end sales charge applies to purchases of these share classes.

•

The Fund reserves the right to cancel your order if it doesn’t receive payment within three business days of receiving your buy order. The Fund will return any payment received for orders that have been cancelled, but no interest will be paid on that money.

•

Selling and/or servicing agents are responsible for sending your buy orders to the Transfer Agent and ensuring that we receive your money on time.

•

Shares bought are recorded on the books of the Fund. The Fund doesn’t issue certificates.

Selling Shares

When you sell your shares, the Fund is effectively buying them back from you. This is called a redemption.

Wire Redemptions

You may request that your Class A, Class B or Class C shares sale proceeds be wired to your bank account by calling the Transfer Agent at 800.422.3737. You must set up this feature prior to your request. For shares sold by Fedwire, there is generally a fee of $7.50. The receiving bank may charge an additional fee. The Transfer Agent may waive the fee for certain accounts. The minimum amount that can be redeemed by wire is $500.

Electronic Funds Transfer

You may sell Class A, Class B or Class C shares of the Fund and request that the proceeds be electronically transferred to your bank account by calling the Transfer Agent at 800.422.3737. It may take up to three business days for the sale proceeds to be received by your bank. You must set up this feature by contacting the Transfer Agent prior to your request to obtain any necessary forms.

Systematic Withdrawal Plan

The Systematic Withdrawal Plan lets you withdraw funds from your Class A, Class B and/or Class C shares account any day of the month on a monthly, quarterly or semi-annual basis. Contact the Transfer Agent or your financial advisor to set up the plan. Your account balance generally must be at least $5,000 to set up the plan, but certain fee-based and wrap accounts are not subject to this requirement. All dividend and capital gain distributions must be reinvested to set up the plan. A Systematic Withdrawal Plan cannot be set up on an account that already has a Systematic Investment Plan established. If you set up the plan after you’ve opened your account, we may require your signature to be Medallion

guaranteed.

You can choose to receive your withdrawals via check or direct deposit into your bank account. You won’t pay a CDSC on Class A, Class B or Class C shares if you withdraw 12% or less of the value of those shares in a year. Otherwise, Columbia Funds will deduct any applicable CDSC from the withdrawals before sending the balance to you. You can cancel the plan by giving Columbia Funds 30 days notice in writing or by calling the Transfer Agent at 800.422.3737. It’s important to remember that if you withdraw more than your investment in the Fund is earning, you’ll eventually use up your original investment.

In-Kind Distributions

The Fund reserves the right to honor sell orders with in-kind distributions of portfolio securities instead of cash. In the event the Fund makes such an in-kind distribution, you may incur the brokerage and transaction costs associated with converting the portfolio securities you receive into cash. Also, the portfolio securities you receive may increase or decrease in value before you convert them into cash.

Other Redemption Rules You Should Know

•

Once the Transfer Agent or your selling and/or servicing agent receives your sell order in “good form,” your shares will be sold at the next calculated net asset value per share. Any applicable CDSC will be deducted from the amount you’re selling and the balance will be remitted to you.

•

If you sell your shares directly through Columbia Funds, we will normally send the sale proceeds by mail or electronically transfer them to your bank account within three business days after the Transfer Agent or your selling and/or servicing agent receives your order in “good form.”

•

If you sell your shares through a selling agent, Columbia Funds will normally send the sale proceeds by Fedwire within three business days after the Transfer Agent or your selling and/or servicing agent receives your order in “good form.”

•

If you paid for your shares by check or from your bank account as an Automated Clearing House (ACH) transaction, Columbia Funds will hold the sale proceeds when you sell those shares for up to 10 days after the trade date of the purchase.

•

No interest will be paid on uncashed redemption checks.

•

Other restrictions may apply to retirement accounts. For information about these restrictions, contact your retirement plan administrator.

•

Also keep in mind Columbia Funds’ Small Account Policy, which is described above in Buying, Selling and Exchanging Shares – Transaction Rules and Policies .

Exchanging Shares

You can generally sell shares of the Fund to buy shares of another Columbia Fund, in what is called an exchange. You should read the prospectus of, and make sure you understand the investment objective and principal investment strategies of, the Columbia Fund into which you are exchanging.

Although the Columbia Funds are part of a family of funds that includes RiverSource-, Seligman- and Threadneedle-branded funds, they do not share the same policies and procedures with respect to buying, selling and exchanging shares as those other funds and, except as described below, Fund shares may not be exchanged for shares of RiverSource-, Seligman- or Threadneedle-branded funds. Fund shareholders generally will be able to exchange into Class A, B, C and Z shares (as applicable) of RiverSource Cash Management Fund, a money market fund managed by the Adviser.

Systematic Exchanges

You may buy Class A, Class B and/or Class C shares of the Fund by exchanging $100 or more each month from another Columbia Fund for shares of the same class of the Fund at no additional cost. Contact the Transfer Agent or your financial advisor to set up the plan. If you set up your plan to exchange more than $100,000 each month, you must have your signature Medallion guaranteed.

Exchanges will continue as long as your balance is sufficient to complete the systematic monthly transfers, subject to Columbia Funds’ Small Account Policy described above in Buying, Selling and Exchanging Shares – Transaction Rules and Policies . You may terminate the program or change the amount you would like to exchange (subject to the $100 minimum) by calling Columbia Funds at 800.345.6611. A sales charge may apply when you exchange shares of a Columbia Fund that were not assessed a sales charge at the time of your initial purchase.

The rules described below for making exchanges apply to systematic exchanges.

Other Exchange Rules You Should Know

•

Exchanges are made at net asset value.

•

You can generally make exchanges between like share classes of any Columbia Fund. Some exceptions apply.

•

A sales charge may apply when you exchange shares of a Columbia Fund that were not assessed a sales charge at the time of your initial purchase.

•

If your shares are subject to a CDSC, you will not be charged a CDSC upon the exchange of those shares. Any CDSC will be deducted when you sell the shares you received from the exchange. The CDSC imposed at that time will be based on the period that begins when you bought shares of the original Columbia Fund and ends when you sell the shares of the Columbia Fund you received from the exchange. The applicable CDSC will be the CDSC of the original Columbia Fund.

•

The rules for buying shares of a Columbia Fund generally apply to exchanges into that Fund.

•

You may make exchanges only into a Columbia Fund that is legally offered and sold in your state of residence.

•

You generally may make an exchange only into a Columbia Fund that is accepting investments.

•

The Fund may change or cancel your right to make an exchange by giving the amount of notice required by regulatory authorities (generally 60 days for a material change or cancellation).

•

Unless your account is part of a tax-advantaged arrangement, an exchange for shares of another fund is a taxable event, and you may recognize a gain or loss for tax purposes.

Same-Fund Exchange Privilege for Class Z Shares

Certain shareholders invested in a class of shares other than Class Z may become eligible to invest in Class Z shares. Upon a determination of such eligibility, any such shareholders will be eligible to exchange their shares for Class Z shares of the same fund, if offered. No sales charges or other charges will apply to any such exchange, except that when Class B shares are exchanged for Class Z shares, any CDSC charges applicable to Class B shares will be applied. Ordinarily, shareholders will not recognize a gain or loss for federal income tax purposes upon such an exchange. Investors should contact their selling and/or servicing agents to learn more about the details of the Class Z shares exchange privilege.

Distributions and Taxes

Distributions to Shareholders

A mutual fund can make money two ways:

•

It can earn income on its investments. Examples of fund income are interest paid on money market instruments and bonds, and dividends paid on common stocks.

•

FUNDamentals ^TM

Distributions

The Fund intends to pay out, in the form of distributions to shareholders, a sufficient amount of its income and gains so that the Fund will qualify for treatment as a regulated investment company and generally will not have to pay any federal excise tax. The Fund generally intends to distribute any net realized capital gain (whether long-term or short-term gain) at least once a year. Normally, the Fund will declare and pay distributions of net investment income according to the following schedule:

Declaration and Distribution Schedule


Declarations		daily
Distributions		monthly

The Fund may, however, pay distributions of net investment income more frequently.

Different share classes of the Fund usually pay different net investment income distribution amounts, because each class has different expenses. Each time a distribution is made, the net asset value per share of the share class is reduced by the amount of the distribution.

The Fund generally pays cash distributions within five business days after the end of the month in which the distribution was declared. If you sell all of your shares after the record date, but before the payment date, for a distribution, you’ll normally receive that distribution in cash within five business days after the sale was made.

The Fund will automatically reinvest distributions in additional shares of the same share class of the Fund unless you inform us you want to receive your distributions in cash. You can do this by writing Columbia Funds at the address on the back cover, or by calling us at 800.345.6611. No sales charges apply to the purchase or sale of such shares. Distributions of $10 or less will automatically be reinvested in additional Fund shares only. If you elect to receive distributions by check and the check is returned as undeliverable, all subsequent distributions will be reinvested in additional shares of the Fund.

Unless you are a tax-exempt investor or holding Fund shares through a tax-advantaged account (such as a 401(k) plan or IRA), you should consider avoiding buying Fund shares shortly before the Fund makes a distribution, other than distributions of net investment income that are declared daily, because doing so can cost you money in taxes to the extent all or a portion of the distribution consists of taxable income or gains. This is because you will, in effect, receive part of your purchase price back in the distribution. This is known as “buying a dividend.” To avoid “buying a dividend,” check the Fund’s distribution schedule online at www.columbiafunds.com, or by calling us at 800.345.6611, before you invest.

If you buy shares of the Fund when it holds securities with unrealized capital gain, you may, in effect, receive part of your purchase price back if and when the Fund sells those

securities and distributes any net realized gain. Any such distribution is generally subject to tax. The Fund may have, or may build up over time, high levels of unrealized capital gain. If you buy shares of the Fund when it has capital loss carryforwards, the Fund may have the ability to offset capital gains realized by the Fund that otherwise would have been distributed to shareholders with such carryforwards, although capital loss carryforwards generally expire after eight taxable years and may be subject to substantial limitations.

Taxes and Your Investment

The Fund will send you a statement each year showing how much you’ve received in distributions in the prior year and the distributions’ character for federal income tax purposes. The Fund expects that distributions will consist primarily of exempt-interest dividends. In addition, you should be aware of the following:

•

The Fund intends to qualify each year as a regulated investment company. A regulated investment company generally is not subject to tax at the fund level on income and gains from investments that are distributed to shareholders. However, the Fund’s failure to qualify as a regulated investment company would result in fund level taxation on its taxable income, and consequently, a reduction in income available for distribution to you. In addition, any dividends of net tax-exempt income would no longer be exempt from federal income tax and, instead, in general would be taxable to you as ordinary income.

•

To the extent distributions are taxable, such distributions generally are taxable to you when paid, whether they are paid in cash or automatically reinvested in additional shares of the Fund.

•

Distributions of the Fund’s net interest income from tax-exempt securities generally are not subject to federal income tax, but may be subject to state and local income and other taxes, as well as federal and state alternative minimum tax. Distributions of the Fund’s net interest income from tax-exempt securities of Georgia and its subdivisions generally also are not subject to Georgia individual income tax.

•

The Fund may invest a portion of its assets in securities that generate income that is not exempt from federal or state income tax. Distributions by the Fund of this income generally are taxable to you as ordinary income. Distributions of gains realized by the Fund, including those generated from the sale or exchange of tax-exempt securities, generally also are taxable to you. Distributions of the Fund’s net short-term capital gain, if any, generally are taxable to you as ordinary income. Distributions of the Fund’s net long-term capital gain, if any, generally are taxable to you as long-term capital gain. Whether capital gains are long-term or short-term is determined by how long the Fund has owned the investments that generated them, rather than how long you have owned your shares.

•

For taxable years beginning on or before December 31, 2010, if you are an individual and you meet certain holding period and other requirements for your Fund shares, a portion of your distributions may be treated as “qualified dividend income” taxable at lower net long-term capital gain rates. It is currently unclear whether Congress will extend this provision to taxable years beginning after December 31, 2010. Qualified dividend income is income attributable to the Fund’s dividends received from certain U.S. and foreign corporations, as long as the Fund meets certain holding period and other requirements for the stock producing such dividends. The Fund does not expect a significant portion of Fund distributions to be derived from qualified dividend income.

•

A sale, redemption or exchange of Fund shares is a taxable event. This includes redemptions where you are paid in securities. Your sales, redemptions and exchanges of Fund shares (including those paid in securities) usually will result in a taxable capital gain or loss to you, equal to the difference between the amount you receive for your shares (or are deemed to have received in the case of exchanges) and the amount you paid (or are deemed to have paid in the case of exchanges) for them. Any such capital gain or loss generally will be long-term capital gain or loss if you have held your Fund shares for more than one year at the time of sale or exchange. In certain circumstances, capital losses may be converted from short-term to long-term or disallowed.

•

Revenue Service (IRS) has notified us that the TIN listed on your account is incorrect according to its records; or the IRS informs the Fund that you are otherwise subject to backup withholding.

FUNDamentals ^TM

Taxes

The information provided above is only a summary of how U.S. federal income taxes may affect your investment in the Fund. It is not intended as a substitute for careful tax planning. Your investment in the Fund may have other tax implications.

It does not apply to certain types of investors who may be subject to special rules, including foreign or tax-exempt investors or those holding Fund shares through a tax-advantaged account, such as a 401(k) plan or IRA.

You should consult with your own tax advisor about the particular tax consequences to you of an investment in the Fund, including the effect of any foreign, state and local taxes, and the effect of possible changes in applicable tax laws.

Financial Highlights

The financial highlights tables are designed to help you understand how the Fund has performed for the past five full fiscal years, or if shorter, the Fund’s period of operations. Certain information reflects financial results for a single Fund share. The total return line indicates how much an investment in the Fund would have earned each period assuming all dividends and distributions had been reinvested.

This information has been audited by [ ], an independent registered public accounting firm whose report, along with the Fund’s financial statements, is included in the Fund’s annual report. The independent registered public accounting firm’s report and the Fund’s financial statements are also incorporated by reference into the SAI.

Columbia Georgia Intermediate Municipal Bond Fund—Class A Shares


	Year Ended March 31, 2010			Year Ended March 31, 2009			Year Ended March 31, 2008			Year Ended March 31, 2007			Year Ended March 31, 2006 ^(a)
Net Asset Value, Beginning of Period	$	[	]	$	10.35		$	10.54		$	10.51		$	10.66
Income from Investment Operations:
Net investment income ^(b)		[	]		0.37			0.40			0.40			0.40
Net realized and unrealized gain (loss) on investments and futures contracts		[	]		(0.17	)		(0.19	)		0.03			(0.15	)
Total from investment operations		[	]		0.20			0.21			0.43			0.25
Less Distributions to Shareholders:
From net investment income		[	]		(0.37	)		(0.40	)		(0.40	)		(0.40	)
Net Asset Value, End of Period	$	[	]	$	10.18		$	10.35		$	10.54		$	10.51
Total return ^(c)(d)		[	]%		2.04	%		2.00	%		4.20	%		2.38	%
Ratios to Average Net Assets/Supplemental Data:
Net expenses before interest expense		[	]%		0.75	% ^(e)		0.75	% ^(e)		0.75	% ^(e)		0.75	% ^(e)
Interest expense		[	]		—			—	% ^(f)		—			—	% ^(f)
Net expenses		[	]%		0.75	% ^(e)		0.75	% ^(e)		0.75	% ^(e)		0.75	% ^(e)
Waiver/Reimbursement		[	]%		0.17	%		0.20	%		0.21	%		0.19	%
Net investment income		[	]%		3.67	% ^(e)		3.80	% ^(e)		3.84	% ^(e)		3.79	% ^(e)
Portfolio turnover rate		[	]%		22	%		28	%		26	%		12	%
Net assets, end of period (000’s)	$	[	]	$	14,801		$	13,742		$	15,574		$	17,913

^(a)	On August 22, 2005, the Fund’s Investor A shares were renamed Class A shares.

^(b)	Per share data was calculated using the average shares outstanding during the period.

^(c)	Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge.

^(d)	Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

^(e)	The benefits derived from expense reductions had an impact of less than 0.01%.

^(f)	Rounds to less than 0.01%.

Columbia Georgia Intermediate Municipal Bond Fund—Class B Shares


	Year Ended March 31, 2010			Year Ended March 31, 2009			Year Ended March 31, 2008			Year Ended March 31, 2007			Year Ended March 31, 2006 ^(a)
Net Asset Value, Beginning of Period	$	[	]	$	10.35		$	10.55		$	10.52		$	10.67
Income from Investment Operations:
Net investment income ^(b)		[	]		0.30			0.32			0.33			0.32
Net realized and unrealized gain (loss) on investments and futures contracts		[	]		(0.16	)		(0.20	)		0.03			(0.15	)
Total from investment operations		[	]		0.14			0.12			0.36			0.17
Less Distributions to Shareholders:
From net investment income		[	]		(0.30	)		(0.32	)		(0.33	)		(0.32	)
Net Asset Value, End of Period	$	[	]	$	10.19		$	10.35		$	10.55		$	10.52
Total return ^(c)(d)		[	]%		1.38	%		1.15	%		3.43	%		1.62	%
Ratios to Average Net Assets/Supplemental Data:
Net expenses before interest expense		[	]%		1.50	% ^(e)		1.50	% ^(e)		1.50	% ^(e)		1.50	% ^(e)
Interest expense		[	]		—			—	% ^(f)		—			—	% ^(f)
Net expenses		[	]%		1.50	% ^(e)		1.50	% ^(e)		1.50	% ^(e)		1.50	% ^(e)
Waiver/Reimbursement		[	]%		0.17	%		0.20	%		0.21	%		0.19	%
Net investment income		[	]%		2.92	% ^(e)		3.05	% ^(e)		3.09	% ^(e)		3.04	% ^(e)
Portfolio turnover rate		[	]%		22	%		28	%		26	%		12	%
Net assets, end of period (000’s)	$	[	]	$	1,266		$	1,364		$	1,960		$	2,581

^(a)	On August 22, 2005, the Fund’s Investor B shares were renamed Class B shares.

^(b)	Per share data was calculated using the average shares outstanding during the period.

^(c)	Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge.

^(d)	Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

^(e)	The benefits derived from expense reductions had an impact of less than 0.01%.

^(f)	Rounds to less than 0.01%.

Columbia Georgia Intermediate Municipal Bond Fund—Class C Shares


	Year Ended March 31, 2010			Year Ended March 31, 2009			Year Ended March 31, 2008			Year Ended March 31, 2007			Year Ended March 31, 2006 ^(a)
Net Asset Value, Beginning of Period	$	[	]	$	10.35		$	10.55		$	10.51		$	10.66
Income from Investment Operations:
Net investment income ^(b)		[	]		0.30			0.32			0.33			0.32
Net realized and unrealized gain (loss) on investments and futures contracts		[	]		(0.17	)		(0.20	)		0.04			(0.15	)
Total from investment operations		[	]		0.13			0.12			0.37			0.17
Less Distributions to Shareholders:
From net investment income		[	]		(0.30	)		(0.32	)		(0.33	)		(0.32	)
Net Asset Value, End of Period	$	[	]	$	10.18		$	10.35		$	10.55		$	10.51
Total return ^(c)(d)		[	]%		1.28	%		1.14	%		3.52	%		1.62	%
Ratios to Average Net Assets/Supplemental Data:
Net expenses before interest expense		[	]%		1.50	% ^(e)		1.50	% ^(e)		1.50	% ^(e)		1.50	% ^(e)
Interest expense		[	]		—			—	% ^(f)		—			—	% ^(f)
Net expenses		[	]%		1.50	% ^(e)		1.50	% ^(e)		1.50	% ^(e)		1.50	% ^(e)
Waiver/Reimbursement		[	]%		0.17	%		0.20	%		0.21	%		0.19	%
Net investment income		[	]%		2.92	% ^(e)		3.05	% ^(e)		3.09	% ^(e)		3.04	% ^(e)
Portfolio turnover rate		[	]%		22	%		28	%		26	%		12	%
Net assets, end of period (000’s)	$	[	]	$	2,100		$	1,830		$	1,877		$	2,189

^(a)	On August 22, 2005, the Fund’s Investor C shares were renamed Class C shares.

^(b)	Per share data was calculated using the average shares outstanding during the period.

^(c)	Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge.

^(d)	Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

^(e)	The benefits derived from expense reductions had an impact of less than 0.01%.

^(f)	Rounds to less than 0.01%.

Hypothetical Fees and Expenses

The following supplemental hypothetical investment information provides additional information about the effect of the fees and expenses of the Fund, including investment advisory fees and other Fund costs, on the Fund’s returns over a 10-year period. The charts show the estimated fees and expenses that would be charged on a hypothetical investment of $10,000 in each share class of the Fund, assuming a 5% return each year, the cumulative return after fees and expenses and the hypothetical year-end balance after fees and expenses. The charts also assume that all dividends and distributions are reinvested and that Class B shares convert to Class A shares after eight years. The annual expense ratio used for each share class, which is the same as that stated in the Annual Fund Operating Expenses table, is presented in the charts and is net of any contractual fee waivers or expense reimbursements for the period of contractual commitment. Your actual costs may be higher or lower. The charts shown below reflect the maximum initial sales charge. If contingent deferred sales charges were reflected, the “Hypothetical Year-End Balance After Fees and Expenses” amounts shown would be lower and the “Annual Fees and Expenses” amounts shown would be higher.

Columbia Georgia Intermediate Municipal Bond Fund—Class A Shares

Maximum Initial Sales Charge 3.25%

Initial Hypothetical Investment Amount
$10,000.00

Assumed Rate of Return 5%

Year

Cumulative Return
Before Fees and
Expenses

Annual Expense
Ratio

Cumulative Return
After Fees and
Expenses

Hypothetical Year-
End Balance After
Fees and Expenses

Annual Fees and
Expenses ^(a)

5.00

[

]% ^(b)

[

]

[

]

10.25

[

]

[

]

15.76

[

]

[

]

21.55

[

]

[

]

27.63

[

]

[

]

34.01

[

]

[

]

40.71

[

]

[

]

47.75

[

]

[

]

55.13

[

]

[

]

62.89

[

]

[

]

Total Gain After Fees and Expenses

[

]

Total Annual Fees and Expenses Paid

[

]

^(a)	Annual Fees and Expenses are calculated based on the average between the beginning and ending balance for each year. All information is calculated on an annual compounding basis.

^(b)	Reflects deduction of the maximum initial sales charge.

Columbia Georgia Intermediate Municipal Bond Fund—Class B Shares

Maximum Initial Sales Charge 0.00%

Initial Hypothetical Investment Amount
$10,000.00

Assumed Rate of Return 5%

Year

Cumulative Return
Before Fees and
Expenses

Annual Expense
Ratio

Cumulative Return
After Fees and
Expenses

Hypothetical Year-
End Balance After
Fees and Expenses

Annual Fees and
Expenses ^(a)

5.00

[

]

[

]

10.25

[

]

[

]

15.76

[

]

[

]

21.55

[

]

[

]

27.63

[

]

[

]

34.01

[

]

[

]

40.71

[

]

[

]

47.75

[

]

[

]

55.13

[

]

[

]

62.89

[

]

[

]

Total Gain After Fees and Expenses

[

]

Total Annual Fees and Expenses Paid

[

]

^(a)	Annual Fees and Expenses are calculated based on the average between the beginning and ending balance for each year. All information is calculated on an annual compounding basis.

Columbia Georgia Intermediate Municipal Bond Fund—Class C Shares

Maximum Initial Sales Charge 0.00%

Initial Hypothetical Investment Amount
$10,000.00

Assumed Rate of Return 5%

Year

Cumulative Return
Before Fees and
Expenses

Annual Expense
Ratio

Cumulative Return
After Fees and
Expenses

Hypothetical Year-
End Balance After
Fees and Expenses

Annual Fees and
Expenses ^(a)

5.00

[

]

[

]

10.25

[

]

[

]

15.76

[

]

[

]

21.55

[

]

[

]

27.63

[

]

[

]

34.01

[

]

[

]

40.71

[

]

[

]

47.75

[

]

[

]

55.13

[

]

[

]

62.89

[

]

[

]

Total Gain After Fees and Expenses

[

]

Total Annual Fees and Expenses Paid

[

]

^(a)	Annual Fees and Expenses are calculated based on the average between the beginning and ending balance for each year. All information is calculated on an annual compounding basis.

LOGO

Columbia Georgia Intermediate Municipal Bond Fund

Class A, Class B and Class C Shares

Prospectus, August 1, 2010

For More Information

You’ll find more information about the Fund and the other Columbia Funds in the documents described below. Contact Columbia Funds as follows to obtain these documents free of charge, to request other information about the Fund and to make shareholder inquiries:


By Mail:		Columbia Funds c/o Columbia Management Investment Services Corp. P.O. Box 8081 Boston, MA 02266-8081

By Telephone:		800.345.6611

Online:		www.columbiafunds.com

Annual and Semi-Annual Reports to Shareholders

Additional information about the Fund’s investments is available in the Fund’s annual and semi-annual reports to shareholders. In the annual report, you will find a discussion of the market conditions and investment strategies that significantly affected the Fund’s performance during its last fiscal year.

Shareholder Communications with the Board

The Fund’s Board of Trustees has adopted procedures by which shareholders may communicate with the Board. Shareholders who wish to communicate with the Board should send their written communications to the Board by mail, c/o Columbia Management Investment Advisers, LLC, One Financial Center, Mail Stop MA5-515-11-05, Boston, MA 02111, Attention: Secretary. Shareholder communications must (i) be in writing, (ii) identify the Columbia Fund to which the communication relates and (iii) state the particular class and number of shares held by the communicating shareholder.

Statement of Additional Information

The SAI provides more detailed information about the Fund and its policies. The SAI is legally part of this prospectus (incorporated by reference). A copy has been filed with the SEC.

Information Provided by the SEC

You can review and copy information about the Fund (including this prospectus, the SAI and shareholder reports) at the SEC’s Public Reference Room in Washington, DC. To find out more about the operation of the Public Reference Room, call the SEC at 202.551.8090. Reports and other information about the Fund are also available in the EDGAR Database on the SEC’s website at http://www.sec.gov. You can receive copies of this information, for a fee, by electronic request at the following e-mail address: publicinfo@sec.gov or by writing the Public Reference Section, Securities and Exchange Commission, Washington, DC 20549-1520.

FUNDamentals™ is a trademark of Ameriprise Financial.

The investment company registration number of Columbia Funds Series Trust, of which the Fund is a series, is 811-09645.

One Financial Center, Boston, MA 02111-2621

800.345.6611 www.columbiafunds.com

INT-36/[ ]-0810

LOGO

Prospectus

August 1, 2010

Columbia Funds

Columbia Georgia Intermediate Municipal Bond Fund

Ticker symbol

Class Z Shares NGAMX

LOGO The Securities and Exchange Commission (SEC) has not approved or disapproved these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

Table of Contents


Columbia Georgia Intermediate Municipal Bond Fund		3

Investment Objective		3

Fees and Expenses of the Fund		3

Principal Investment Strategies		5

Principal Risks		5

Performance Information		8

Investment Adviser and Portfolio Manager(s)		9

Purchase and Sale of Fund Shares		9

Tax Information		9

Payments to Broker-Dealers and Other Financial Intermediaries		9

Additional Investment Strategies and Policies		10

Management of the Fund		12

Primary Service Providers		12

Other Roles and Relationships of Ameriprise Financial and its Affiliates—Certain Conflicts of Interest		14

Certain Legal Matters		15

About Class Z Shares		16

Description of the Share Class		16

Financial Intermediary Compensation		17

Buying, Selling and Exchanging Shares		18

Share Price Determination		18

Transaction Rules and Policies		19

Opening an Account and Placing Orders		23

Distributions and Taxes		27

Financial Highlights		30

Hypothetical Fees and Expenses		31

Icons Guide



		Investment Objective

		Fees and Expenses of the Fund

		Principal Investment Strategies

		Principal Risks

		Performance Information

		Other Roles and Relationships of Ameriprise Financial and its Affiliates - Certain Conflicts of Interest

Columbia Georgia Intermediate Municipal Bond Fund

Investment Objective

The Fund seeks current income exempt from federal income tax and Georgia individual income tax, consistent with moderate fluctuation of principal.

Fees and Expenses of the Fund

This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.

Shareholder Fees (fees paid directly from your investment)


		Class Z Shares
Maximum sales charge (load) imposed on purchases, as a % of offering price		N/A
Maximum deferred sales charge (load) imposed on redemptions, as a % of the lower of the original purchase price or net asset value		N/A

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)


	Class Z Shares
Management fees	0.55	%
Distribution and/or service (Rule 12b-1) fees	0.00	%
Other expenses	[	]%
Acquired fund fees and expenses	0.01	%
Total annual Fund operating expenses (a)	[	]%

(a)	“Total annual Fund operating expenses” do not match “Net Expenses” in the Financial Highligths section of this prospectus, which does not include, among other things, fees and expenses incurred as a result of investment in shares of certain pooled investment vehicles.

Example

The following example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example illustrates the hypothetical expenses that you would incur over the time periods indicated, and assumes that:

•

you invest $10,000 in Class Z shares of the Fund for the periods indicated,

•

your investment has a 5% return each year, and

•

the Fund’s total annual operating expenses remain the same as shown in the table above.

Based on the assumptions listed above, your costs would be:

1 year

3 years

5 years

10 years

Class Z Shares

[

]

[

]

[

]

[

]

Remember this is an example only. Your actual costs may be higher or lower.

Portfolio Turnover

Principal Investment Strategies

Principal Risks

•

Interest Rate Risk – Debt securities are subject to interest rate risk. In general, if prevailing interest rates rise, the values of debt securities will tend to fall, and if interest rates fall, the values of debt securities will tend to rise. Changes in the value of a debt security usually will not affect the amount of income the Fund receives from it but may affect the value of the Fund’s shares. Interest rate risk is generally greater for debt securities with longer maturities/durations.

•

Performance Information

Year by Year Total Return (%) as of December 31 Each Year*

The bar chart below shows you how the performance of the Fund’s Class Z shares has varied from year to year.

LOGO

*	Year-to-date return as of June 30, 2010: [ ]%

Best and Worst Quarterly Returns During this Period


Best:	[ ] quarter [ ]:	[ ]%
Worst:	[ ] quarter [ ]:	[ ]%

Average Annual Total Return as of December 31, 2009


	1 year		5 years		10 years
Class Z shares returns before taxes	[	]%	[	]%	[	]%
Class Z shares returns after taxes on distributions	[	]%	[	]%	[	]%
Class Z shares returns after taxes on distributions and sale of Fund shares	[	]%	[	]%	[	]%
Barclays Capital 3-15 Year Blend Municipal Bond Index (reflects no deductions for fees, expenses or taxes)	[	]%	[	]%	[	]%

Investment Adviser and Portfolio Manager(s)

Investment Adviser

Columbia Management Investment Advisers, LLC

Portfolio Manager

James D’Arcy, CFA Manager. Service with the Fund since 2010.

Purchase and Sale of Fund Shares

Tax Information

Payments to Broker-Dealers and Other Financial Intermediaries

Additional Investment Strategies and Policies

Changing the Fund’s Investment Objective and Policies

Investment Guidelines

Holding Other Kinds of Investments

Investing in Money Market Funds

Lending Securities

Portfolio Holdings Disclosure

The Fund’s complete portfolio holdings as of a quarter-end are disclosed approximately 30 calendar days after such quarter-end.

In addition, more current information concerning the Fund’s portfolio holdings as of specified dates also may be disclosed on the Columbia Funds’ website.

Investing Defensively

The Fund may from time to time take temporary defensive investment positions that are inconsistent with the Fund’s principal investment strategies in attempting to respond to adverse market, economic, political or other conditions including, for example, investments in money market instruments or holdings of cash or cash equivalents. The Fund may not achieve its investment objective while it is investing defensively.

Mailings to Households

Additional Information on Portfolio Turnover

A mutual fund that replaces, or turns over, more than 100% of its investments in a year is considered to have a high portfolio turnover rate. A high portfolio turnover rate can generate larger distributions of short-term capital gains to shareholders, which for individuals are generally taxable at higher rates than long-term capital gains for U.S. federal income tax purposes. A high portfolio turnover rate can also mean higher brokerage and other transaction costs, which could reduce a fund’s returns. In general, the greater the volume of buying and selling by a fund, the greater the impact that brokerage commissions will have on its returns. The Fund generally buys securities for capital appreciation, investment income or both. However, the Fund may sell securities regardless of how long they’ve been held. You’ll find the Fund’s portfolio turnover rate for its most recent fiscal year in the Fees and Expenses of the Fund — Portfolio Turnover section of this prospectus and portfolio turnover rates for prior fiscal years in the Financial Highlights section of this prospectus.

Management of the Fund

Primary Service Providers

The Adviser

Subadviser(s)

The SEC has issued an order that permits the Adviser, subject to the approval of the Board, to appoint an unaffiliated subadviser or to change the terms of a subadvisory agreement for the Fund without first obtaining shareholder approval. The order permits the Fund to add or to change unaffiliated subadvisers or to change the fees paid to subadvisers from time to time without the expense and delays associated with obtaining shareholder approval of the change. The Adviser and its affiliates may have other relationships, including significant financial relationships, with current or potential subadvisers or their affiliates, which may create certain conflicts of interest. When making recommendations to the Board to appoint or to change a subadviser, or to change the terms of a subadvisory agreement, the Adviser discloses to the Board the nature of any material relationships it has with a subadviser or its affiliates.

At present, the Adviser has not engaged any investment subadviser for the Fund.

Portfolio Manager

James D’Arcy, CFA

Manager. Service with the Fund since 2010.

The Administrator

Annual Administration Fee,

as a % of Average Daily Net Assets


Columbia Georgia Intermediate Municipal Bond Fund		0.15	%

The Distributor

The Transfer Agent

The Transfer Agent is a registered transfer agent and a wholly-owned subsidiary of Ameriprise Financial. The Transfer Agent’s responsibilities include processing purchases, sales and exchanges, calculating and paying distributions, keeping shareholder records, preparing account statements and providing customer service. The Fund pays the Transfer Agent monthly fees on a per-account basis. Fees paid to the Transfer Agent include reimbursements for certain out-of-pocket expenses and sub-transfer agency fees, subject to certain limitations, paid by the Transfer Agent on the Fund’s behalf.

Expense Reimbursement Arrangements

Other Roles and Relationships of Ameriprise Financial and its Affiliates—Certain Conflicts of Interest

Conflicts of interest and limitations that could affect a Columbia Fund may arise from, for example, the following:

•

compensation and other benefits received by the Adviser and other Ameriprise Financial affiliates related to the management/administration of a Columbia Fund and the sale of its shares;

•

separate and potentially divergent management of a Columbia Fund and other funds and accounts advised/managed by the Adviser and other Ameriprise Financial affiliates;

•

regulatory and other investment restrictions on investment activities of the Adviser and other Ameriprise Financial affiliates and accounts advised/managed by them;

•

insurance and other relationships of Ameriprise Financial affiliates with companies and other entities in which a Columbia Fund invests; and

•

regulatory and other restrictions relating to the sharing of information between Ameriprise Financial and its affiliates, including the Adviser, and a Columbia Fund.

Additional information about Ameriprise Financial and the types of conflicts of interest and other matters referenced above is set forth in the “Investment Advisory and Other Services – Other Roles and Relationships of Ameriprise Financial and its Affiliates—Certain Conflicts of Interest” section of the SAI, which is identified by the LOGO icon. Investors in the Columbia Funds should carefully review these disclosures and consult with their financial advisor if they have any questions.

Certain Legal Matters

Ameriprise Financial and certain of its affiliates have historically been involved in a number of legal, arbitration and regulatory proceedings, including routine litigation, class actions and governmental actions, concerning matters arising in connection with the conduct of their business activities. Ameriprise Financial believes that the Fund is not currently the subject of, and that neither Ameriprise Financial nor any of its affiliates is the subject of, any pending legal, arbitration or regulatory proceedings that are likely to have a material adverse effect on the Fund or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Fund. Information regarding certain pending and settled legal proceedings may be found in the Fund’s shareholder reports and in the SAI. Additionally, Ameriprise Financial is required to make 10-Q, 10-K and, as necessary, 8-K filings with the SEC on legal and regulatory matters that relate to Ameriprise Financial and its affiliates. Copies of these filings may be obtained by accessing the SEC website at www.sec.gov.

About Class Z Shares

Description of the Share Class

Share Class Features

The Fund offers one class of shares in this prospectus: Class Z shares . The Fund may also offer other classes of shares through a separate prospectus. Each share class has its own investment eligibility criteria, cost structure and other features. The following summarizes the primary features of the Class Z shares offered by this prospectus. Contact your financial advisor or Columbia Funds for more information about the Fund’s share classes and how to choose among them.


		Class Z Shares
Eligible Investors and Minimum Initial Investments		Class Z shares are available only to certain eligible investors, which are subject to different minimum initial investment requirements. These minimum initial investment amounts range from $0 to $2,500. See Buying, Selling and Exchanging Shares – Opening an Account and Placing Orders for details.

Investment Limits		none

Conversion Features		none

Front-End Sales Charges		none

Contingent Deferred Sales Charges (CDSCs)		none

Maximum Distribution and Service Fees		none

FUNDamentals ^TM

Selling and/or Servicing Agents

The terms “selling agent” and “servicing agent” refer to the financial intermediary that employs your financial advisor. Selling and/or servicing agents include, for example, brokerage firms, banks, investment advisors, third party administrators and other financial intermediaries, including Ameriprise Financial and its affiliates.

Financial Intermediary Compensation

The Distributor and the Adviser make payments, from their own resources, to certain financial intermediaries, including other Ameriprise Financial affiliates, for marketing/sales support services relating to the Columbia Funds. Such payments are generally based upon one or more of the following factors: average net assets of the Columbia Funds sold by the Distributor attributable to that intermediary, gross sales of the Columbia Funds distributed by the Distributor attributable to that intermediary, reimbursement of ticket charges (fees that an intermediary firm charges its representatives for effecting transactions in Fund shares) or a negotiated lump sum payment. While the financial arrangements may vary for each intermediary, the support payments to any one intermediary are generally between 0.05% and 0.50% on an annual basis for payments based on average net assets of the Fund attributable to the intermediary, and between 0.05% and 0.25% on an annual basis for firms receiving a payment based on gross sales of the Columbia Funds attributable to the intermediary.

These payments for shareholder servicing support vary by financial intermediary but generally are not expected, with certain limited exceptions, to exceed 0.40% of the average aggregate value of the Fund’s shares in any financial intermediary’s program on an annual basis for those classes of shares that pay a service fee pursuant to a plan under Rule 12b-1 under the 1940 Act, and 0.45% of the average aggregate value of the Fund’s shares in any financial intermediary’s program on an annual basis for those classes of shares that do not pay a service fee pursuant to a plan under Rule 12b-1 under the 1940 Act.

Amounts paid by the Distributor and the Adviser and their affiliates are paid out of the Distributor’s and the Adviser’s own resources and do not increase the amount paid by you or the Fund. You can find further details about the payments made by the Distributor and the Adviser and their affiliates and the services provided by financial intermediaries as well as a list of the intermediaries to which the Distributor and the Adviser have agreed to make marketing support payments in the SAI. Your financial intermediary may charge you fees and commissions in addition to those described in this prospectus. You should consult with your financial intermediary and review carefully any disclosure your financial intermediary provides regarding its services and compensation. Depending on the financial arrangement in place at any particular time, a financial intermediary and its financial consultants may have a financial incentive for recommending the Fund or a particular share class over others. See Management of the Fund – Other Roles and Relationships of Ameriprise Financial and its Affiliates – Certain Conflicts of Interest for more information.

Buying, Selling and Exchanging Shares

Share Price Determination

FUNDamentals ^TM

NAV Calculation

Each of the Fund’s share classes calculates its NAV as follows:

Transaction Rules and Policies

Also remember that the Fund may refuse any order to buy or exchange shares. If this happens, we’ll return any money we’ve received, but no interest will be paid on that money.

Order Processing

FUNDamentals ^TM

Business Days

A business day is any day that the New York Stock Exchange (NYSE) is open. A business day ends at the close of regular trading on the NYSE, usually at 4:00 p.m. Eastern time. If the NYSE closes early, the business day ends as of the time the NYSE closes. On holidays and other days when the NYSE is closed, the Fund’s net asset value is not calculated and the Fund does not accept buy or sell orders. However, the value of the Fund’s assets may still be affected on such days to the extent that the Fund holds foreign securities that trade on days that foreign securities markets are open.

“Good Form”

An order is in “good form” if the Transfer Agent or your selling and/or servicing agent has all of the information and documentation it deems necessary to effect your order. For example, when you sell shares by letter of instruction, “good form” means that your letter has (i) complete instructions and the signatures of all account owners, (ii) a Medallion signature guarantee for amounts equal to or greater than $100,000 and (iii) any other required documents completed and attached. For the documents required for sales by corporations, agents, fiduciaries, surviving joint owners and other legal entities, call 800.345.6611.

Medallion Signature Guarantees

Written Transactions

Telephone Transactions

Telephone orders may not be as secure as written orders. Columbia Funds will take reasonable steps to confirm that telephone instructions are genuine. For example, we require

Online Transactions

Once you have an account, contact Columbia Funds at 800.345.6611 for more information on account trading restrictions and the special sign-up procedures required for online transactions. The Transfer Agent has procedures in place to authenticate electronic orders you deliver through the internet. You will be required to accept the terms of an online agreement and to establish and utilize a password in order to access online account services.

You can sell up to an aggregate of $100,000 of shares through the internet in any 30-day period if you qualify for internet orders.

Customer Identification Program

Small Account Policy—Accounts Below $250

Small Account Policy—Minimum Balance Fee

market value of Fund shares, sales loads applicable to a particular class of shares, or for other reasons.

Exceptions to the Above Small Account Policy (Accounts Below $250 and Minimum Balance Fee)

Small Account Policy—Broker/Dealer and Wrap Fee Accounts

Columbia Funds may automatically redeem shares at any time from broker/dealer networked accounts and wrap fee accounts that have account balances of $20 or less or that have less than one share.

Cash Flows

Information Sharing Agreements

As required by Rule 22c-2 under the 1940 Act, the Columbia Funds or certain of their service providers will enter into information sharing agreements with financial intermediaries, including participating life insurance companies and financial intermediaries that sponsor or offer retirement plans through which shares of the Columbia Funds are made available for purchase. Pursuant to Rule 22c-2, financial intermediaries are required, upon request, to: (i) provide shareholder account and transaction information and (ii) execute instructions from the Fund to restrict or prohibit further purchases of Fund shares by shareholders who have been identified by the Fund as having engaged in transactions that violate the Fund’s excessive trading policies and procedures. See Buying, Selling and Exchanging Shares – Excessive Trading Practices for more information.

Excessive Trading Practices

Some financial intermediaries apply their own restrictions or policies to underlying investor accounts, which may be more or less restrictive than those described here. This may impact the Fund’s ability to curtail excessive trading, even where it is identified. For these and other reasons, it is possible that excessive trading may occur despite the Fund’s efforts to detect and prevent it.

Risks of Excessive Trading – Excessive trading creates certain risks to the Fund’s long-term shareholders and may create the following adverse effects:

•

negative impact on the Fund’s performance;

•

potential dilution of the value of the Fund’s shares;

•

losses on the sale of investments resulting from the need to sell securities at less favorable prices;

•

increased taxable gains to the Fund’s remaining shareholders resulting from the need to sell securities to meet sell orders; and

•

increased brokerage and administrative costs.

Opening an Account and Placing Orders

Columbia Funds encourages you to consult with a financial advisor who can help you with your investment decisions and who can help you open an account. Once you have an account, you can buy, sell and exchange shares by contacting your financial advisor who will send your order to the Transfer Agent or your selling and/or servicing agent. As described in Buying, Selling and Exchanging Shares – Transaction Rules and Policies , once you have an account you can also communicate your orders directly to the Transfer Agent by mail, by telephone or online.

Buying Shares

Once you have opened an account, you can buy Class Z shares in a lump sum, through our Systematic Investment Plan, by dividend diversification, by wire or by electronic funds transfer. Class Z shares are only available to the categories of eligible investors described below, each of which is subject to its own minimum initial investment requirements.

Minimum Initial Investments

There is no minimum initial investment in Class Z shares for the following categories of eligible investors:

•

Any person investing all or part of the proceeds of a distribution, rollover or transfer of assets into a Columbia Management Individual Retirement Account, from any deferred compensation plan which was a shareholder of any of the funds of Columbia Acorn Trust (formerly named Liberty Acorn Trust) on September 29, 2000, in which the investor was a participant and through which the investor invested in one or more of the funds of Columbia Acorn Trust immediately prior to the distribution, transfer or rollover.

•

Any health savings account sponsored by a third party platform, including those sponsored by Ameriprise Financial and its affiliates, and any omnibus group retirement plan for which a financial intermediary or other entity provides services and is not compensated by the Fund for those services, other than in the form of payments for shareholder servicing or sub-accounting performed in place of the Transfer Agent.

•

Any investor participating in a wrap program sponsored by a financial intermediary or other entity that is paid an asset-based fee by the investor and that is not compensated by the Fund for those services, other than payments for shareholder servicing or sub-accounting performed in place of the Transfer Agent.

The minimum initial investment in Class Z shares for the following categories of eligible investors is $1,000 :

•

Any individual retirement plan (assuming the eligibility criteria below are met) or group retirement plan that is not held in an omnibus manner for which a financial intermediary or other entity provides services and is not compensated by the Fund for those services, other than in the form of payments for shareholder servicing or sub-accounting performed in place of the Transfer Agent.

The minimum initial investment in Class Z shares for the following categories of eligible investors is $2,500:

•

Any client of Bank of America or one of its subsidiaries buying shares through an asset management company, trust, fiduciary, retirement plan administration or similar arrangement with Bank of America or the subsidiary.

•

Any investor buying shares through a Columbia Management state tuition plan organized under Section 529 of the Internal Revenue Code.

•

Any shareholder (as well as any family member of a shareholder or person listed on an account registration for any account of the shareholder) of another fund distributed by the Distributor (i) who holds Class Z shares; (ii) who held Primary A shares prior to the share class redesignation of Primary A shares as Class Z shares that occurred on August 22, 2005; (iii) who holds Class A shares that were obtained by an exchange of Class Z shares; or (iv) who bought shares of certain mutual funds that were not subject to sales charges and that merged with another fund distributed by the Distributor.

•

Any trustee or director (or family member of a trustee or director) of a fund distributed by the Distributor.

•

Any employee (or family member of an employee) of Bank of America or one of its subsidiaries.

•

Any investor participating in an account offered by a financial intermediary or other entity that provides services to such an account, is paid an asset-based fee by the investor and is not compensated by the Fund for those services, other than payments for shareholder servicing or sub-accounting performed in place of the Transfer Agent (each investor buying shares through a financial intermediary must independently satisfy the minimum investment requirement noted above).

•

Any institutional investor who is a corporation, partnership, trust, foundation, endowment, institution, government

entity, or similar organization, which meets the respective qualifications for an accredited investor, as defined under the Securities Act of 1933.

•

Certain financial institutions and intermediaries, such as insurance companies, trust companies, banks, endowments, investment companies or foundations, buying shares for their own account, including Ameriprise Financial and its affiliates and/or subsidiaries.

For investors establishing a Systematic Investment Plan, the minimum initial investment is $50.

Minimum Additional Investments

There is no minimum additional investment for Class Z shares.

Systematic Investment Plan

Dividend Diversification

Wire Purchases

You may buy Class Z shares of the Fund by wiring money from your bank account to your Fund account by calling the Transfer Agent at 800.422.3737.

Electronic Funds Transfer

You may buy Class Z shares of the Fund by electronically transferring money from your bank account to your Fund account by calling the Transfer Agent at 800.422.3737. An electronic funds transfer may take up to three business days to settle and be considered in “good form.” You must set up this feature by contacting the Transfer Agent prior to your request to obtain any necessary forms.

Other Purchase Rules You Should Know

•

Once the Transfer Agent or your selling and/or servicing agent receives your buy order in “good form,” your purchase will be made at the next calculated net asset value per share.

•

You generally buy Class Z shares at net asset value because no front-end sales charge applies to purchases of this share class.

•

Selling and/or servicing agents are responsible for sending your buy orders to the Transfer Agent and ensuring that we receive your money on time.

•

Shares bought are recorded on the books of the Fund. The Fund doesn’t issue certificates.

Selling Shares

When you sell your shares, the Fund is effectively buying them back from you. This is called a redemption.

Wire Redemptions

You may request that your Class Z shares sale proceeds be wired to your bank account by calling the Transfer Agent at 800.422.3737. You must set up this feature prior to your request. For shares sold by Fedwire, there is generally a fee of $7.50. The receiving bank may charge an additional fee. The Transfer Agent may waive the fee for certain accounts. The minimum amount that can be redeemed by wire is $500.

Electronic Funds Transfer

You may sell Class Z shares of the Fund and request that the proceeds be electronically transferred to your bank account by calling the Transfer Agent at 800.422.3737. It may take up to three business days for the sale proceeds to be received by your bank. You must set up this feature by contacting the Transfer Agent prior to your request to obtain any necessary forms.

Systematic Withdrawal Plan

The Systematic Withdrawal Plan lets you withdraw funds from your Class Z shares account any day of the month on a monthly, quarterly or semi-annual basis. Contact the Transfer Agent or your financial advisor to set up the plan. Your

account balance generally must be at least $5,000 to set up the plan, but certain fee-based and wrap accounts are not subject to this requirement. All dividend and capital gain distributions must be reinvested to set up the plan. A Systematic Withdrawal Plan cannot be set up on an account that already has a Systematic Investment Plan established. If you set up the plan after you’ve opened your account, we may require your signature to be Medallion guaranteed.

You can choose to receive your withdrawals via check or direct deposit into your bank account. You can cancel the plan by giving Columbia Funds 30 days notice in writing or by calling the Transfer Agent at 800.422.3737. It’s important to remember that if you withdraw more than your investment in the Fund is earning, you’ll eventually use up your original investment.

In-Kind Distributions

Other Redemption Rules You Should Know

•

Once the Transfer Agent or your selling and/or servicing agent receives your sell order in “good form,” your shares will be sold at the next calculated net asset value per share.

•

No interest will be paid on uncashed redemption checks.

•

Other restrictions may apply to retirement accounts. For information about these restrictions, contact your retirement plan administrator.

•

Also keep in mind Columbia Funds’ Small Account Policy, which is described above in Buying, Selling and Exchanging Shares – Transaction Rules and Policies .

Exchanging Shares

Systematic Exchanges

You may buy Class Z shares of the Fund by exchanging $100 or more each month from another Columbia Fund for shares of the same class of the Fund at no additional cost. Contact the Transfer Agent or your financial advisor to set up the plan. If you set up your plan to exchange more than $100,000 each month, you must have your signature Medallion guaranteed.

The rules described below for making exchanges apply to systematic exchanges.

Other Exchange Rules You Should Know

•

Exchanges are made at net asset value.

•

You can generally make exchanges between like share classes of any Columbia Fund. Some exceptions apply.

•

The rules for buying shares of a Columbia Fund generally apply to exchanges into that Fund.

•

You may make exchanges only into a Columbia Fund that is legally offered and sold in your state of residence.

•

You generally may make an exchange only into a Columbia Fund that is accepting investments.

•

The Fund may change or cancel your right to make an exchange by giving the amount of notice required by regulatory authorities (generally 60 days for a material change or cancellation).

•

Unless your account is part of a tax-advantaged arrangement, an exchange for shares of another fund is a taxable event, and you may recognize a gain or loss for tax purposes.

Distributions and Taxes

Distributions to Shareholders

A mutual fund can make money two ways:

•

It can earn income on its investments. Examples of fund income are interest paid on money market instruments and bonds, and dividends paid on common stocks.

•

FUNDamentals ^TM

Distributions

Declaration and Distribution Schedule


Declarations		daily
Distributions		monthly

The Fund may, however, pay distributions of net investment income more frequently.

If you buy shares of the Fund when it holds securities with unrealized capital gain, you may, in effect, receive part of your purchase price back if and when the Fund sells those

Taxes and Your Investment

•

To the extent distributions are taxable, such distributions generally are taxable to you when paid, whether they are paid in cash or automatically reinvested in additional shares of the Fund.

•

Revenue Service (IRS) has notified us that the TIN listed on your account is incorrect according to its records; or the IRS informs the Fund that you are otherwise subject to backup withholding.

FUNDamentals ^TM

Taxes

Financial Highlights

The financial highlights table is designed to help you understand how the Fund has performed for the past five full fiscal years, or if shorter, the Fund’s period of operations. Certain information reflects financial results for a single Fund share. The total return line indicates how much an investment in the Fund would have earned each period assuming all dividends and distributions had been reinvested.

Columbia Georgia Intermediate Municipal Bond Fund—Class Z Shares


	Year Ended March 31, 2010			Year Ended March 31, 2009			Year Ended March 31, 2008			Year Ended March 31, 2007			Year Ended March 31, 2006 ^(a)
Net Asset Value, Beginning of Period	$	[	]	$	10.35		$	10.54		$	10.51		$	10.66
Income from Investment Operations:
Net investment income (b)		[	]		0.40			0.42			0.43			0.43
Net realized and unrealized gain (loss) on investments and futures contracts		[	]		(0.17	)		(0.19	)		0.03			(0.15	)
Total from investment operations		[	]		0.23			0.23			0.46			0.28
Less Distributions to Shareholders:
From net investment income		[	]		(0.40	)		(0.42	)		(0.43	)		(0.43	)
Net Asset Value, End of Period	$	[	]	$	10.18		$	10.35		$	10.54		$	10.51
Total return (c)(d)		[	]%		2.30	%		2.26	%		4.46	%		2.63	%
Ratios to Average Net Assets/Supplemental Data:
Net expenses before interest expense		[	]%		0.50	% ^(e)		0.50	% ^(e)		0.50	% ^(e)		0.50	% ^(e)
Interest expense		[	]		—			—	% ^(f)		—			—	% ^(f)
Net expenses		[	]%		0.50	% ^(e)		0.50	% ^(e)		0.50	% ^(e)		0.50	% ^(e)
Waiver/Reimbursement		[	]%		0.17	%		0.20	%		0.21	%		0.19	%
Net investment income		[	]%		3.92	% ^(e)		4.05	% ^(e)		4.09	% ^(e)		4.04	% ^(e)
Portfolio turnover rate		[	]%		22	%		28	%		26	%		12	%
Net assets, end of period (000’s)	$	[	]	$	110,408		$	106,927		$	100,541		$	102,259

(a)	On August 22, 2005, the Fund’s Primary A shares were renamed Class Z shares.

(b)	Per share data was calculated using the average shares outstanding during the period.

(c)	Total return at net asset value assuming all distributions reinvested.

(d)	Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(e)	The benefits derived from expense reductions had an impact of less than 0.01%.

(f)	Rounds to less than 0.01%.

Hypothetical Fees and Expenses

The following supplemental hypothetical investment information provides additional information about the effect of the fees and expenses of the Fund, including investment advisory fees and other Fund costs, on the Fund’s returns over a 10-year period. The chart shows the estimated fees and expenses that would be charged on a hypothetical investment of $10,000 in Class Z shares of the Fund, assuming a 5% return each year, the cumulative return after fees and expenses and the hypothetical year-end balance after fees and expenses. The chart also assumes that all dividends and distributions are reinvested. The annual expense ratio used for the share class, which is the same as that stated in the Annual Fund Operating Expenses table, is presented in the chart and is net of any contractual fee waivers or expense reimbursements for the period of contractual commitment. Your actual costs may be higher or lower.

Columbia Georgia Intermediate Municipal Bond Fund—Class Z Shares

Maximum Initial Sales Charge 0.00%

Initial Hypothetical Investment Amount
$10,000.00

Assumed Rate of Return 5%

Year

Cumulative Return
Before Fees and
Expenses

Annual Expense
Ratio

Cumulative Return
After Fees and
Expenses

Hypothetical Year-
End Balance After
Fees and Expenses

Annual Fees and
Expenses ^(a)

5.00

[

] %

[

]

[

]

10.25

[

] %

[

]

[

]

15.76

[

] %

[

]

[

]

21.55

[

] %

[

]

[

]

27.63

[

] %

[

]

[

]

34.01

[

] %

[

]

[

]

40.71

[

] %

[

]

[

]

47.75

[

] %

[

]

[

]

55.13

[

] %

[

]

[

]

62.89

[

] %

[

]

[

]

Total Gain After Fees and Expenses

[

]

Total Annual Fees and Expenses Paid

[

]

^(a)	Annual Fees and Expenses are calculated based on the average between the beginning and ending balance for each year. All information is calculated on an annual compounding basis.

LOGO

Columbia Georgia Intermediate Municipal Bond Fund

Class Z Shares

Prospectus, August 1, 2010

For More Information


By Mail:		Columbia Funds c/o Columbia Management Investment Services Corp. P.O. Box 8081 Boston, MA 02266-8081

By Telephone:		800.345.6611

Online:		www.columbiafunds.com

Annual and Semi-Annual Reports to Shareholders

Shareholder Communications with the Board

Statement of Additional Information

The SAI provides more detailed information about the Fund and its policies. The SAI is legally part of this prospectus (incorporated by reference). A copy has been filed with the SEC.

Information Provided by the SEC

FUNDamentals™ is a trademark of Ameriprise Financial.

The investment company registration number of Columbia Funds Series Trust, of which the Fund is a series, is 811-09645.

One Financial Center, Boston, MA 02111-2621

800.345.6611 www.columbiafunds.com

INT-36/[ ]-0810

LOGO

Prospectus

August 1, 2010

Columbia Funds

Columbia North Carolina Intermediate Municipal Bond Fund

Ticker symbols

Class A Shares NNCIX

Class B Shares NNITX

Class C Shares NNINX

Table of Contents


Columbia North Carolina Intermediate Municipal Bond Fund		3

Investment Objective		3

Fees and Expenses of the Fund		3

Principal Investment Strategies		5

Principal Risks		5

Performance Information		8

Investment Adviser and Portfolio Manager(s)		9

Purchase and Sale of Fund Shares		9

Tax Information		9

Payments to Broker-Dealers and Other Financial Intermediaries		9

Additional Investment Strategies and Policies		10

Management of the Fund		12

Primary Service Providers		12

Other Roles and Relationships of Ameriprise Financial and its Affiliates—Certain Conflicts of Interest		14

Certain Legal Matters		15

Choosing a Share Class		16

Comparison of the Share Classes		16

Sales Charges and Commissions		17

Reductions/Waivers of Sales Charges		21

Distribution and Service Fees		23

Financial Intermediary Compensation		24

Buying, Selling and Exchanging Shares		25

Share Price Determination		25

Transaction Rules and Policies		26

Opening an Account and Placing Orders		30

Distributions and Taxes		34

Financial Highlights		38

Hypothetical Fees and Expenses		41

Icons Guide



		Investment Objective

		Fees and Expenses of the Fund

		Principal Investment Strategies

		Principal Risks

		Performance Information

		Other Roles and Relationships of Ameriprise Financial and its Affiliates - Certain Conflicts of Interest

Columbia North Carolina Intermediate Municipal Bond Fund

Investment Objective

The Fund seeks current income exempt from federal income tax and North Carolina individual income tax, consistent with moderate fluctuation of principal.

Fees and Expenses of the Fund

Shareholder Fees (fees paid directly from your investment)


	Class A Shares		Class B Shares		Class C Shares
Maximum sales charge (load) imposed on purchases, as a % of offering price	3.25	%	N/A		N/A
Maximum deferred sales charge (load) imposed on redemptions, as a % of the lower of the original purchase price or net asset value	1.00	% ^(a)	3.00	% ^(b)	1.00	% ^(c)

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)


	Class A Shares		Class B Shares		Class C Shares
Management fees	0.55	%	0.55	%	0.55	%
Distribution and/or service (Rule 12b-1) fees	0.25	%	1.00	%	1.00	%
Other expenses	[	]%	[	]%	[	]%
Acquired fund fees and expenses	0.01	%	0.01	%	0.01	%
Total annual Fund operating expenses ^(d)	[	]%	[	]%	[	]%

^(a)	This charge applies to investors who buy $1 million or more of Class A shares and redeem them within one year of purchase, with certain limited exceptions.

^(b)	This charge decreases over time.

^(c)	This charge applies to investors who buy Class C shares and redeem them within one year of purchase, with certain limited exceptions.

^(d)	“Total annual Fund operating expenses” do not match “Net Expenses” in the Financial Highlights section of this prospectus, which does not include, among other things, fees and expenses incurred as a result of investment in shares of certain pooled investment vehicles.

Example

The following example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds.

The example illustrates the hypothetical expenses that you would incur over the time periods indicated, and assumes that:

•

you invest $10,000 in Class A, Class B or Class C shares of the Fund for the periods indicated,

•

your investment has a 5% return each year, and

•

the Fund’s total annual operating expenses remain the same as shown in the table above.

Based on the assumptions listed above, your costs would be:

1 year

3 years

5 years

10 years

Class A Shares

[

]

[

]

[

]

[

]

Class B Shares

Assuming no redemption of shares

[

]

[

]

[

]

[

]

Assuming complete redemption of shares at the end of the period

[

]

[

]

[

]

[

]

Class C Shares

Assuming no redemption of shares

[

]

[

]

[

]

[

]

Assuming complete redemption of shares at the end of the period

[

]

[

]

[

]

[

]

Remember this is an example only. Your actual costs may be higher or lower.

Portfolio Turnover

Principal Investment Strategies

Under normal circumstances, the Fund invests at least 80% of its net assets in securities that pay interest exempt from federal income tax (but not necessarily the federal alternative minimum tax) and North Carolina individual income tax. These securities are issued by or on behalf of the State of North Carolina, its political subdivisions, agencies, instrumentalities and authorities, and other qualified issuers.

Principal Risks

•

as letters of credit, guarantees or insurance, and are generally classified into general obligation bonds and special revenue obligations. General obligation bonds are backed by an issuer’s taxing authority and may be vulnerable to limits on a government’s power or ability to raise revenue or increase taxes. They may also depend for payment on legislative appropriation and/or funding or other support from other governmental bodies. Revenue obligations are payable from revenues generated by a particular project or other revenue source, and are typically subject to greater risk of default than general obligation bonds because investors can look only to the revenue generated by the project or other revenue source backing the project, rather than to the general taxing authority of the state or local government issuer of the obligations. Because many municipal securities are issued to finance projects in sectors such as education, health care, transportation and utilities, conditions in those sectors can affect the overall municipal market. Municipal securities pay interest that, in the opinion of bond counsel, is free from U.S. federal income tax (and, in some cases, the federal alternative minimum tax). There is no assurance that the IRS will agree with this opinion. In the event the IRS determines that the issuer does not comply with relevant tax requirements, interest payments from a security could become federally taxable, possibly retroactively to the date the security was issued, and the value of the security would likely fall. As a shareholder of the Fund, you may be required to file an amended tax return and pay additional taxes as a result.

•

Interest Rate Risk – Debt securities are subject to interest rate risk. In general, if prevailing interest rates rise, the values of debt securities will tend to fall, and if interest rates fall, the values of debt securities will tend to rise. Changes in the value of a debt security usually will not affect the amount of income the Fund receives from it but may affect the value of the Fund’s shares. Interest rate risk is generally greater for debt securities with longer maturities/durations.

•

Derivatives Risk – Derivatives are financial contracts whose values are, for example, based on (or “derived” from) traditional securities (such as a stock or bond), assets (such as a commodity like gold or a foreign currency), reference rates (such as LIBOR) or market indices (such as the S&P 500 ^® Index). Derivatives involve special risks and may result in losses or may limit the Fund’s potential gain from favorable market movements. Derivative strategies often involve leverage, which may exaggerate a loss, potentially causing the Fund to lose more money than it would have lost had it invested in the underlying security or other asset. The values of derivatives may move in unexpected ways, especially in unusual market conditions, and may result in increased volatility, among other consequences. The use of derivatives may also increase the amount of taxes payable by shareholders holding shares in a taxable account. Other risks arise from the Fund’s potential inability to terminate or to sell derivative positions. A liquid secondary market may not always exist for the Fund’s derivative positions at times when the Fund might wish to terminate or to sell such positions. Over-the-counter instruments (investments not traded on an exchange) may be illiquid, and transactions in derivatives traded in the over-the-counter market are subject to the risk that the other party will not meet its obligations. The use of derivatives also involves the risks of mispricing or improper valuation and that changes in the value of the derivative may not correlate perfectly with the underlying security, asset, reference rate or index. The Fund also may not be able to find a suitable derivative transaction counterparty, and thus may be unable to engage in derivative transactions when it is deemed favorable to do so, or at all. For more information on the risks of derivative investments and strategies, see the Statement of Additional Information.

•

investments decline.

•

Performance Information

Year by Year Total Return (%) as of December 31 Each Year *

LOGO

*	Year-to-date return as of June 30, 2010: [ ]%

Best and Worst Quarterly Returns During this Period


Best:	[ ] quarter [ ]:	[ ]%
Worst:	[ ] quarter [ ]:	[ ]%

Average Annual Total Return as of December 31, 2009


	1 year		5 years		10 years
Class A shares returns before taxes	[	]%	[	]%	[	]%
Class A shares returns after taxes on distributions	[	]%	[	]%	[	]%
Class A shares returns after taxes on distributions and sale of Fund shares	[	]%	[	]%	[	]%
Class B shares returns before taxes	[	]%	[	]%	[	]%
Class C shares returns before taxes	[	]%	[	]%	[	]%
Barclays Capital 3-15 Year Blend Municipal Bond Index (reflects no deductions for fees, expenses or taxes)	[	]%	[	]%	[	]%

Investment Adviser and Portfolio Manager(s)

Investment Adviser

Columbia Management Investment Advisers, LLC

Portfolio Manager

James D’Arcy, CFA

Manager. Service with the Fund since 2010.

Purchase and Sale of Fund Shares

Tax Information

Payments to Broker-Dealers and Other Financial Intermediaries

Additional Investment Strategies and Policies

Changing the Fund’s Investment Objective and Policies

Investment Guidelines

Holding Other Kinds of Investments

Investing in Money Market Funds

Lending Securities

Portfolio Holdings Disclosure

The Fund’s complete portfolio holdings as of a quarter-end are disclosed approximately 30 calendar days after such quarter-end.

In addition, more current information concerning the Fund’s portfolio holdings as of specified dates also may be disclosed on the Columbia Funds’ website.

Investing Defensively

The Fund may from time to time take temporary defensive investment positions that are inconsistent with the Fund’s

Mailings to Households

Additional Information on Portfolio Turnover

A mutual fund that replaces, or turns over, more than 100% of its investments in a year is considered to have a high portfolio turnover rate. A high portfolio turnover rate can generate larger distributions of short-term capital gains to shareholders, which for individuals are generally taxable at higher rates than long-term capital gains for U.S. federal income tax purposes. A high portfolio turnover rate can also mean higher brokerage and other transaction costs, which could reduce a fund’s returns. In general, the greater the volume of buying and selling by a fund, the greater the impact that brokerage commissions will have on its returns. The Fund generally buys securities for capital appreciation, investment income or both. However, the Fund may sell securities regardless of how long they’ve been held. You’ll find the Fund’s portfolio turnover rate for its most recent fiscal year in the Fees and Expenses of the Fund – Portfolio Turnover section of this prospectus and portfolio turnover rates for prior fiscal years in the Financial Highlights section of this prospectus.

Management of the Fund

Primary Service Providers

The Adviser

Subadviser(s)

The SEC has issued an order that permits the Adviser, subject to the approval of the Board, to appoint an unaffiliated subadviser or to change the terms of a subadvisory agreement for the Fund without first obtaining shareholder approval. The order permits the Fund to add or to change unaffiliated subadvisers or to change the fees paid to subadvisers from time to time without the expense and delays associated with obtaining shareholder approval of the change. The Adviser and its affiliates may have other relationships, including significant financial relationships, with current or potential subadvisers or their affiliates, which may create certain conflicts of interest. When making recommendations to the Board to appoint or to change a subadviser, or to change the terms of a subadvisory agreement, the Adviser discloses to the Board the nature of any material relationships it has with a subadviser or its affiliates.

At present, the Adviser has not engaged any investment subadviser for the Fund.

Portfolio Manager

James D’Arcy, CFA

Manager. Service with the Fund since 2010.

The Administrator

Annual Administration Fee,

as a % of Average Daily Net Assets


Columbia North Carolina Intermediate Municipal Bond Fund		0.15	%

The Distributor

The Transfer Agent

The Transfer Agent is a registered transfer agent and a wholly-owned subsidiary of Ameriprise Financial. The Transfer Agent’s responsibilities include processing purchases, sales and exchanges, calculating and paying distributions, keeping shareholder records, preparing account statements and providing customer service. The Fund pays the Transfer Agent monthly fees on a per-account basis. Fees paid to the Transfer Agent include reimbursements for certain out-of-pocket expenses and sub-transfer agency fees, subject to certain limitations, paid by the Transfer Agent on the Fund’s behalf.

Expense Reimbursement Arrangements

Other Roles and Relationships of Ameriprise Financial and its Affiliates—Certain Conflicts of Interest

Conflicts of interest and limitations that could affect a Columbia Fund may arise from, for example, the following:

•

compensation and other benefits received by the Adviser and other Ameriprise Financial affiliates related to the management/administration of a Columbia Fund and the sale of its shares;

•

separate and potentially divergent management of a Columbia Fund and other funds and accounts advised/managed by the Adviser and other Ameriprise Financial affiliates;

•

regulatory and other investment restrictions on investment activities of the Adviser and other Ameriprise Financial affiliates and accounts advised/managed by them;

•

insurance and other relationships of Ameriprise Financial affiliates with companies and other entities in which a Columbia Fund invests; and

•

regulatory and other restrictions relating to the sharing of information between Ameriprise Financial and its affiliates, including the Adviser, and a Columbia Fund.

Additional information about Ameriprise Financial and the types of conflicts of interest and other matters referenced above is set forth in the “Investment Advisory and Other Services – Other Roles and Relationships of Ameriprise Financial and its Affiliates—Certain Conflicts of Interest” section of the SAI, which is identified by the LOGO icon. Investors in the Columbia Funds should carefully review these disclosures and consult with their financial advisor if they have any questions.

Certain Legal Matters

Ameriprise Financial and certain of its affiliates have historically been involved in a number of legal, arbitration and regulatory proceedings, including routine litigation, class actions and governmental actions, concerning matters arising in connection with the conduct of their business activities. Ameriprise Financial believes that the Fund is not currently the subject of, and that neither Ameriprise Financial nor any of its affiliates is the subject of, any pending legal, arbitration or regulatory proceedings that are likely to have a material adverse effect on the Fund or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Fund. Information regarding certain pending and settled legal proceedings may be found in the Fund’s shareholder reports and in the SAI. Additionally, Ameriprise Financial is required to make 10-Q, 10-K and, as necessary, 8-K filings with the SEC on legal and regulatory matters that relate to Ameriprise Financial and its affiliates. Copies of these filings may be obtained by accessing the SEC website at www.sec.gov.

Choosing a Share Class

Comparison of the Share Classes

Share Class Features


	Class A Shares	Class B Shares	Class C Shares
Eligible Investors and Minimum Initial Investments ^(a)	Minimum initial investments range from $0 to $2,500; the share class is available to the general public for investment.	The Fund no longer accepts investments from new or existing investors in Class B shares, except through a reinvestment of a dividend or capital gain distribution, or a permitted exchange as described in more detail under Buying, Selling and Exchanging Shares - Opening an Account and Placing Orders - Buying Shares - Class B Shares Closing .	Minimum initial investments range from $0 to $2,500; the share class is available to the general public for investment.

Investment Limits	none	up to $49,999 (based on aggregate account value) ^(b)	up to $999,999

Conversion Features	none	convert to Class A shares eight years after purchase	none

Front-End Sales Charges ^(c)	3.25% maximum, declining to 0.00% on investments of $1 million or more	none	none

Contingent Deferred Sales Charges (CDSCs) ^(c)	none, except a 1.00% CDSC applies to certain investments of between $1 million and $50 million sold within one year of purchase	3.00% maximum, gradually declining to 0.00% after four years	1.00% on investments sold within one year of purchase

Maximum Distribution and Service Fees	0.25% combined distribution and service fee	0.75% distribution fee 0.25% service fee	0.75% distribution fee 0.25% service fee

^(a)	See Buying, Selling and Exchanging Shares – Opening an Account and Placing Orders for more details on the eligible investors and investment minimums of these share classes.

^(b)

^(c)	See Choosing a Share Class – Reductions/Waivers of Sales Charges for information about certain exceptions to these sales charges.

FUNDamentals ^TM

Selling and/or Servicing Agents

The terms “selling agent” and “servicing agent” refer to the financial intermediary that employs your financial advisor. Selling and/or servicing agents include, for example, brokerage firms, banks, investment advisors, third party administrators and other financial intermediaries, including Ameriprise Financial and its affiliates.

Sales Charges and Commissions

Class A Shares—Front-End Sales Charge

FUNDamentals ^TM

Front-End Sales Charge Calculation

The following table presents the front-end sales charge as a percentage of both the offering price and the net amount invested.

•

The offering price per share is the net asset value per share plus any front-end sales charge that applies.

•

The net asset value (or NAV) per share is the price of a share calculated by the Fund every business day.

The dollar amount of the sales charge is the difference between the offering price of the shares you buy(based on the applicable sales charge in the table) and the net asset value of those shares.

The front-end sales charge you’ll pay on Class A shares:

•

depends on the amount you’re investing (generally, the larger the investment, the smaller the percentage sales charge), and

•

is based on the total amount of your purchase and the value of your account.

Class A Shares—Front-End Sales Charge—Breakpoint Schedule


Dollar amount of shares bought ^(a)	Sales charge as a % of the offering price ^(b)		Sales charge as a % of the net amount invested ^(b)		Amount retained by or paid to selling and/or servicing agents as a % of the offering price
$0 – $99,999	3.25	%	3.36	%	3.00	%
$100,000 – $249,999	2.50	%	2.56	%	2.25	%
$250,000 – $499,999	2.00	%	2.04	%	1.75	%
$500,000 – $999,999	1.50	%	1.52	%	1.25	%
$1,000,000 or more	0.00	%	0.00	%	1.00	% ^(c)(d)

^(a)	Purchase amounts and account values are aggregated among all eligible Columbia Fund accounts for the purposes of this table.

^(b)

^(c)

^(d)	For certain group retirement plans, selling and/or servicing agents are eligible to receive a 1.00% commission from the Distributor on all purchases up to $3 million, including those in amounts of less than $1 million that are coded as commission-eligible trades.

Class A Shares—CDSC and Commissions

In some cases, you’ll pay a CDSC if you sell Class A shares that you bought without an initial sales charge.

•

The CDSC on Class A shares:

•

is applied to the net asset value at the time of your purchase or sale, whichever is lower, and

•

will not be applied to any shares you receive through reinvested distributions.

The Distributor may also pay your selling and/or servicing agent a cumulative commission when you buy $1 million or more of Class A shares, according to the following schedule:

Class A Shares—Commission Schedule


Purchase Amount	Commission Level (as a % of net asset value per share)
$1 million – $2,999,999	1.00	%
$3 million – $49,999,999	0.50	%
$50 million or more	0.25	%

FUNDamentals ^TM

Contingent Deferred Sales Charge

Class B and Class C Shares—Sales Charges

You don’t pay a front-end sales charge when you buy Class B or Class C shares, but you may pay a CDSC when you sell Class B or Class C shares.

The CDSC on Class B and Class C shares:

•

is applied to the net asset value at the time of your purchase or sale, whichever is lower,

•

will not be applied to any shares you receive through reinvested distributions, and

•

generally declines each year until there is no sales charge for selling shares.

Class B Shares—CDSC and Commissions

Class B Shares—CDSC Schedule


Number of Years Class B Shares Held		Applicable CDSC
One		3.00%
Two		3.00%
Three		2.00%
Four		1.00%
Five		none
Six		none
Seven		none
Eight		none
Nine		Conversion to Class A Shares

The following rules apply to the conversion of Class B shares to Class A shares:

•

Class B shares are converted on or about the 15th day of the month that they become eligible for conversion.

•

Any shares you received from reinvested distributions on these shares generally will convert to Class A shares at the same time.

•

No sales charge or other charges apply, and conversions are free from U.S. federal income tax.

Class C Shares—CDSC and Commissions

Reductions/Waivers of Sales Charges

Front-End Sales Charge Reductions

FUNDamentals ^TM

Your “Immediate Family” and Account Value Aggregation

Eligible Accounts

The types of accounts that are eligible for the account value aggregation purposes described above are:

•

individual accounts,

•

joint accounts,

•

certain IRA accounts,

•

certain health savings accounts,

•

certain trust accounts, and

•

Uniform Gifts to Minors Act (UGMA)/Uniform Transfers to Minors Act (UTMA) accounts.

Eligible accounts do not include Class R share accounts or accounts holding shares of money market funds that used the Columbia brand before May 1, 2010.

Front-End Sales Charge Waivers

CDSC Waivers

The Fund may change or cancel these terms at any time. Any change or cancellation applies only to future purchases.

For more information about the sales charge reductions and waivers described here, consult the SAI.

Distribution and Service Fees

The table below shows the maximum annual distribution and service fees (as an annual % of average daily net assets) and the combined amount of such fees applicable to each share class:

Distribution and Service (Rule 12b-1) Fees


	Distribution Fee		Service Fee		Combined Total
Class A	—	^(a)	—	^(a)	0.25	% ^(a)
Class B	0.75	%	0.25	%	1.00	%
Class C	0.75	%	0.25	%	1.00	%

^(a)	The Fund’s Class A shares pay a combined distribution and service fee pursuant to the Fund’s combined distribution and shareholder servicing plan for Class A shares.

Financial Intermediary Compensation

The Distributor and the Adviser make payments, from their own resources, to certain financial intermediaries, including other Ameriprise Financial affiliates, for marketing/sales support services relating to the Columbia Funds. Such payments are generally based upon one or more of the following factors: average net assets of the Columbia Funds sold by the Distributor attributable to that intermediary, gross sales of the Columbia Funds distributed by the Distributor attributable to that intermediary, reimbursement of ticket charges (fees that an intermediary firm charges its representatives for effecting transactions in Fund shares) or a negotiated lump sum payment. While the financial arrangements may vary for each intermediary, the support payments to any one intermediary are generally between 0.05% and 0.50% on an annual basis for payments based on average net assets of the Fund attributable to the intermediary, and between 0.05% and 0.25% on an annual basis for firms receiving a payment based on gross sales of the Columbia Funds attributable to the intermediary.

These payments for shareholder servicing support vary by financial intermediary but generally are not expected, with certain limited exceptions, to exceed 0.40% of the average aggregate value of the Fund’s shares in any financial intermediary’s program on an annual basis for those classes of shares that pay a service fee pursuant to a plan under Rule 12b-1 under the 1940 Act, and 0.45% of the average aggregate value of the Fund’s shares in any financial intermediary’s program on an annual basis for those classes of shares that do not pay a service fee pursuant to a plan under Rule 12b-1 under the 1940 Act.

Amounts paid by the Distributor and the Adviser and their affiliates are paid out of the Distributor’s and the Adviser’s own resources and do not increase the amount paid by you or the Fund. You can find further details about the payments made by the Distributor and the Adviser and their affiliates and the services provided by financial intermediaries as well as a list of the intermediaries to which the Distributor and the Adviser have agreed to make marketing support payments in the SAI. Your financial intermediary may charge you fees and commissions in addition to those described in this prospectus. You should consult with your financial intermediary and review carefully any disclosure your financial intermediary provides regarding its services and compensation. Depending on the financial arrangement in place at any particular time, a financial intermediary and its financial consultants may have a financial incentive for recommending the Fund or a particular share class over others. See Management of the Fund – Other Roles and Relationships of Ameriprise Financial and its Affiliates – Certain Conflicts of Interest for more information.

Buying, Selling and Exchanging Shares

Share Price Determination

FUNDamentals ^TM

NAV Calculation

Each of the Fund’s share classes calculates its NAV as follows:

Transaction Rules and Policies

Also remember that the Fund may refuse any order to buy or exchange shares. If this happens, we’ll return any money we’ve received, but no interest will be paid on that money.

Order Processing

FUNDamentals ^TM

Business Days

A business day is any day that the New York Stock Exchange (NYSE) is open. A business day ends at the close of regular trading on the NYSE, usually at 4:00 p.m. Eastern time. If the NYSE closes early, the business day ends as of the time the NYSE closes. On holidays and other days when the NYSE is closed, the Fund’s net asset value is not calculated and the Fund does not accept buy or sell orders. However, the value of the Fund’s assets may still be affected on such days to the extent that the Fund holds foreign securities that trade on days that foreign securities markets are open.

“Good Form”

An order is in “good form” if the Transfer Agent or your selling and/or servicing agent has all of the information and documentation it deems necessary to effect your order. For example, when you sell shares by letter of instruction, “good form” means that your letter has (i) complete instructions and the signatures of all account owners, (ii) a Medallion signature guarantee for amounts equal to or greater than $100,000 and (iii) any other required documents completed and attached. For the documents required for sales by corporations, agents, fiduciaries, surviving joint owners and other legal entities, call 800.345.6611.

Medallion Signature Guarantees

Written Transactions

Telephone Transactions

Telephone orders may not be as secure as written orders. Columbia Funds will take reasonable steps to confirm that telephone instructions are genuine. For example, we require proof of your identification before we will act on instructions received by telephone and may record telephone conversations. However, the Fund and its agents will not be responsible for any losses, costs or expenses resulting from an unauthorized telephone instruction when reasonable steps have been taken to confirm that telephone instructions are

genuine. Telephone orders may be difficult to complete during periods of significant economic or market change or business interruption.

Online Transactions

Once you have an account, contact Columbia Funds at 800.345.6611 for more information on account trading restrictions and the special sign-up procedures required for online transactions. The Transfer Agent has procedures in place to authenticate electronic orders you deliver through the internet. You will be required to accept the terms of an online agreement and to establish and utilize a password in order to access online account services.

You can sell up to an aggregate of $100,000 of shares through the internet in any 30-day period if you qualify for internet orders.

Customer Identification Program

Small Account Policy—Accounts Below $250

Small Account Policy—Minimum Balance Fee

Exceptions to the Above Small Account Policy (Accounts Below $250 and Minimum Balance Fee)

Small Account Policy—Broker/Dealer and Wrap Fee Accounts

Columbia Funds may automatically redeem shares at any time from broker/dealer networked accounts and wrap fee accounts that have account balances of $20 or less or that have less than one share.

Cash Flows

Information Sharing Agreements

As required by Rule 22c-2 under the 1940 Act, the Columbia Funds or certain of their service providers will enter into information sharing agreements with financial intermediaries, including participating life insurance companies and financial intermediaries that sponsor or offer retirement plans through which shares of the Columbia Funds are made available for purchase. Pursuant to Rule 22c-2, financial intermediaries are required, upon request, to: (i) provide shareholder account and transaction information and (ii) execute instructions from the Fund to restrict or prohibit further purchases of Fund shares by shareholders who have been identified by the Fund as having engaged in transactions that violate the Fund’s excessive trading policies and procedures. See Buying, Selling and Exchanging Shares – Excessive Trading Practices for more information.

Excessive Trading Practices

Some financial intermediaries apply their own restrictions or policies to underlying investor accounts, which may be more or less restrictive than those described here. This may impact the Fund’s ability to curtail excessive trading, even where it is identified. For these and other reasons, it is possible that excessive trading may occur despite the Fund’s efforts to detect and prevent it.

Risks of Excessive Trading – Excessive trading creates certain risks to the Fund’s long-term shareholders and may create the following adverse effects:

•

negative impact on the Fund’s performance;

•

potential dilution of the value of the Fund’s shares;

•

losses on the sale of investments resulting from the need to sell securities at less favorable prices;

•

increased taxable gains to the Fund’s remaining shareholders resulting from the need to sell securities to meet sell orders; and

•

increased brokerage and administrative costs.

Opening an Account and Placing Orders

Columbia Funds encourages you to consult with a financial advisor who can help you with your investment decisions and who can help you open an account. Once you have an account, you can buy, sell and exchange shares by contacting your financial advisor who will send your order to the Transfer Agent or your selling and/or servicing agent. As described in Buying, Selling and Exchanging Shares – Transaction Rules and Policies , once you have an account you can also communicate your orders directly to the Transfer Agent by mail, by telephone or online.

Buying Shares

Eligible Investors

Class B Shares Closing

Additional Class B shares will be issued only to existing investors in Class B shares and only through the following two types of transactions (Qualifying Transactions):

•

Dividends and/or capital gain distributions may continue to be reinvested in Class B shares of the Fund.

•

Shareholders invested in Class B shares of the Fund may exchange those shares for Class B shares of other Columbia Funds offering such shares.

Any initial purchase orders for the Fund’s Class B shares will be rejected (other than through a Qualifying Transaction that is an exchange transaction).

Minimum Initial Investments

Minimum Additional Investments

There is no minimum additional investment for Class A or Class C shares.

Systematic Investment Plan

Dividend Diversification

Wire Purchases

You may buy Class A or Class C shares of the Fund by wiring money from your bank account to your Fund account by calling the Transfer Agent at 800.422.3737.

Electronic Funds Transfer

Other Purchase Rules You Should Know

•

You generally buy Class A shares at the public offering price per share because purchases of Class A shares are generally subject to a front-end sales charge.

•

You buy Class B and Class C shares at net asset value per share because no front-end sales charge applies to purchases of these share classes.

•

Selling and/or servicing agents are responsible for sending your buy orders to the Transfer Agent and ensuring that we receive your money on time.

•

Shares bought are recorded on the books of the Fund. The Fund doesn’t issue certificates.

Selling Shares

When you sell your shares, the Fund is effectively buying them back from you. This is called a redemption.

Wire Redemptions

Electronic Funds Transfer

Systematic Withdrawal Plan

guaranteed.

In-Kind Distributions

Other Redemption Rules You Should Know

•

No interest will be paid on uncashed redemption checks.

•

Other restrictions may apply to retirement accounts. For information about these restrictions, contact your retirement plan administrator.

•

Also keep in mind Columbia Funds’ Small Account Policy, which is described above in Buying, Selling and Exchanging Shares – Transaction Rules and Policies .

Exchanging Shares

Systematic Exchanges

The rules described below for making exchanges apply to systematic exchanges.

Other Exchange Rules You Should Know

•

Exchanges are made at net asset value.

•

You can generally make exchanges between like share classes of any Columbia Fund. Some exceptions apply.

•

A sales charge may apply when you exchange shares of a Columbia Fund that were not assessed a sales charge at the time of your initial purchase.

•

The rules for buying shares of a Columbia Fund generally apply to exchanges into that Fund.

•

You may make exchanges only into a Columbia Fund that is legally offered and sold in your state of residence.

•

You generally may make an exchange only into a Columbia Fund that is accepting investments.

•

The Fund may change or cancel your right to make an exchange by giving the amount of notice required by regulatory authorities (generally 60 days for a material change or cancellation).

•

Unless your account is part of a tax-advantaged arrangement, an exchange for shares of another fund is a taxable event, and you may recognize a gain or loss for tax purposes.

Same-Fund Exchange Privilege for Class Z Shares

Distributions and Taxes

Distributions to Shareholders

A mutual fund can make money two ways:

•

It can earn income on its investments. Examples of fund income are interest paid on money market instruments and bonds, and dividends paid on common stocks.

•

FUNDamentals ^TM

Distributions

Declaration and Distribution Schedule


Declarations		daily
Distributions		monthly

The Fund may, however, pay distributions of net investment income more frequently.

If you buy shares of the Fund when it holds securities with unrealized capital gain, you may, in effect, receive part of your purchase price back if and when the Fund sells those

Taxes and Your Investment

•

To the extent distributions are taxable, such distributions generally are taxable to you when paid, whether they are paid in cash or automatically reinvested in additional shares of the Fund.

•

Distributions of the Fund’s net interest income from tax-exempt securities generally are not subject to federal income tax, but may be subject to state and local income and other taxes, as well as federal and state alternative minimum tax. Distributions of the Fund’s net interest income from tax-exempt securities of North Carolina and its subdivisions generally also are not subject to North Carolina individual income tax.

•

The Fund is required by federal law to withhold tax on any taxable and possibly tax-exempt distributions and sale proceeds paid to you (including amounts paid to you in securities and amounts deemed to be paid to you upon an exchange of shares) if: you haven’t provided a correct taxpayer identification number (TIN) or haven’t certified to the Fund that withholding doesn’t apply; the Internal Revenue Service (IRS) has notified us that the TIN listed on your account is incorrect according to its records; or the IRS informs the Fund that you are otherwise subject to backup withholding.

FUNDamentals ^TM

Taxes

Financial Highlights

Columbia North Carolina Intermediate Municipal Bond Fund—Class A Shares


	Year Ended March 31, 2010			Year Ended March 31, 2009			Year Ended March 31, 2008			Year Ended March 31, 2007			Year Ended March 31, 2006 ^(a)
Net Asset Value, Beginning of Period	$	[	]	$	10.08		$	10.38		$	10.40		$	10.56
Income from Investment Operations:
Net investment income ^(b)		[	]		0.37			0.39			0.40			0.41
Net realized and unrealized gain (loss) on investments and futures contracts		[	]		(0.29	)		(0.30	)		0.03			(0.16	)
Total from investment operations		[	]		0.08			0.09			0.43			0.25
Less Distributions to Shareholders:
From net investment income		[	]		(0.37	)		(0.39	)		(0.39	)		(0.41	)
From net realized gains		[	]		—			—	^(c)		(0.06	)		—
Total distributions to shareholders		[	]		(0.37	)		(0.39	)		(0.45	)		(0.41	)
Net Asset Value, End of Period	$	[	]	$	9.79		$	10.08		$	10.38		$	10.40
Total return ^(d)(e)		[	]%		0.87	%		0.84	%		4.23	%		2.37	%
Ratios to Average Net Assets/Supplemental Data:
Net expenses before interest expense		[	]%		0.75	% ^(f)		0.75	% ^(f)		0.75	% ^(f)		0.75	% ^(f)
Interest expense		[	]		—			—			—			—
Net expenses		[	]%		0.75	% ^(f)		0.75	% ^(f)		0.75	% ^(f)		0.75	% ^(f)
Waiver/Reimbursement		[	]%		0.14	%		0.16	%		0.18	%		0.17	%
Net investment income		[	]%		3.79	% ^(f)		3.73	% ^(f)		3.80	% ^(f)		3.89	% ^(f)
Portfolio turnover rate		[	]%		20	%		25	%		17	%		16	%
Net assets, end of period (000’s)	$	[	]	$	23,236		$	22,399		$	18,705		$	19,155

^(a)	On August 22, 2005, the Fund’s Investor A shares were renamed Class A shares.

^(b)	Per share data was calculated using the average shares outstanding during the period.

^(c)	Rounds to less than $0.01 per share.

^(d)	Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge.

^(e)	Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

^(f)	The benefits derived from expense reductions had an impact of less than 0.01%.

Columbia North Carolina Intermediate Municipal Bond Fund—Class B Shares


	Year Ended March 31, 2010			Year Ended March 31, 2009			Year Ended March 31, 2008			Year Ended March 31, 2007			Year Ended March 31, 2006 ^(a)
Net Asset Value, Beginning of Period	$	[	]	$	10.08		$	10.38		$	10.39		$	10.56
Income from Investment Operations:
Net investment income ^(b)		[	]		0.30			0.31			0.32			0.33
Net realized and unrealized gain (loss) on investments and futures contracts		[	]		(0.29	)		(0.30	)		0.04			(0.17	)
Total from investment operations		[	]		0.01			0.01			0.36			0.16
Less Distributions to Shareholders:
From net investment income		[	]		(0.30	)		(0.31	)		(0.31	)		(0.33	)
From net realized gains		[	]		—			—	^(c)		(0.06	)		—
Total distributions to shareholders		[	]		(0.30	)		(0.31	)		(0.37	)		(0.33	)
Net Asset Value, End of Period	$	[	]	$	9.79		$	10.08		$	10.38		$	10.39
Total return ^(d)(e)		[	]%		0.13	%		0.09	%		3.55	%		1.51	%
Ratios to Average Net Assets/Supplemental Data:
Net expenses before interest expense		[	]%		1.50	% ^(f)		1.50	% ^(f)		1.50	% ^(f)		1.50	% ^(f)
Interest expense		[	]		—			—			—			—
Net expenses		[	]%		1.50	% ^(f)		1.50	% ^(f)		1.50	% ^(f)		1.50	% ^(f)
Waiver/Reimbursement		[	]%		0.14	%		0.16	%		0.18	%		0.17	%
Net investment income		[	]%		3.04	% ^(f)		2.99	% ^(f)		3.05	% ^(f)		3.14	% ^(f)
Portfolio turnover rate		[	]%		20	%		25	%		17	%		16	%
Net assets, end of period (000’s)	$	[	]	$	1,920		$	2,668		$	3,776		$	4,478

^(a)	On August 22, 2005, the Fund’s Investor B shares were renamed Class B shares.

^(b)	Per share data was calculated using the average shares outstanding during the period.

^(c)	Rounds to less than $0.01 per share.

^(d)	Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge.

^(e)	Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

^(f)	The benefits derived from expense reductions had an impact of less than 0.01%.

Columbia North Carolina Intermediate Municipal Bond Fund—Class C Shares


	Year Ended March 31, 2010			Year Ended March 31, 2009			Year Ended March 31, 2008			Year Ended March 31, 2007			Year Ended March 31, 2006 ^(a)
Net Asset Value, Beginning of Period	$	[	]	$	10.08		$	10.38		$	10.40		$	10.56
Income from Investment Operations:
Net investment income ^(b)		[	]		0.30			0.31			0.32			0.33
Net realized and unrealized gain (loss) on investments and futures contracts		[	]		(0.29	)		(0.30	)		0.03			(0.16	)
Total from investment operations		[	]		0.01			0.01			0.35			0.17
Less Distributions to Shareholders:
From net investment income		[	]		(0.30	)		(0.31	)		(0.31	)		(0.33	)
From net realized gains		[	]		—			—	^(c)		(0.06	)		—
Total distributions to shareholders		[	]		(0.30	)		(0.31	)		(0.37	)		(0.33	)
Net Asset Value, End of Period	$	[	]	$	9.79		$	10.08		$	10.38		$	10.40
Total return ^(d)(e)		[	]%		0.12	%		0.09	%		3.45	%		1.60	%
Ratios to Average Net Assets/Supplemental Data:
Net expenses before interest expense		[	]%		1.50	% ^(f)		1.50	% ^(f)		1.50	% ^(f)		1.50	% ^(f)
Interest expense		[	]		—			—			—			—
Net expenses		[	]%		1.50	% ^(f)		1.50	% ^(f)		1.50	% ^(f)		1.50	% ^(f)
Waiver/Reimbursement		[	]%		0.14	%		0.16	%		0.18	%		0.17	%
Net investment income		[	]%		3.04	% ^(f)		2.99	% ^(f)		3.05	% ^(f)		3.14	% ^(f)
Portfolio turnover rate		[	]%		20	%		25	%		17	%		16	%
Net assets, end of period (000’s)	$	[	]	$	3,672		$	3,108		$	3,760		$	4,650

^(a)	On August 22, 2005, the Fund’s Investor C shares were renamed Class C shares.

^(b)	Per share data was calculated using the average shares outstanding during the period.

^(c)	Rounds to less than $0.01 per share.

^(d)	Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge.

^(e)	Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

^(f)	The benefits derived from expense reductions had an impact of less than 0.01%.

Hypothetical Fees and Expenses

Columbia North Carolina Intermediate Municipal Bond Fund—Class A Shares

Maximum Initial Sales Charge 3.25%

Initial Hypothetical Investment Amount
$10,000.00

Assumed Rate of Return 5%

Year

Cumulative Return
Before Fees and
Expenses

Annual Expense
Ratio

Cumulative Return
After Fees and
Expenses

Hypothetical Year-
End Balance After
Fees and Expenses

Annual Fees and
Expenses ^(a)

5.00

[

]% ^(b)

[

]

[

]

10.25

[

]

[

]

15.76

[

]

[

]

21.55

[

]

[

]

27.63

[

]

[

]

34.01

[

]

[

]

40.71

[

]

[

]

47.75

[

]

[

]

55.13

[

]

[

]

62.89

[

]

[

]

Total Gain After Fees and Expenses

[

]

Total Annual Fees and Expenses Paid

[

]

^(a)	Annual Fees and Expenses are calculated based on the average between the beginning and ending balance for each year. All information is calculated on an annual compounding basis.

^(b)	Reflects deduction of the maximum initial sales charge.

Columbia North Carolina Intermediate Municipal Bond Fund—Class B Shares

Maximum Initial Sales Charge 0.00%

Initial Hypothetical Investment Amount
$10,000.00

Assumed Rate of Return 5%

Year

Cumulative Return
Before Fees and
Expenses

Annual Expense
Ratio

Cumulative Return
After Fees and
Expenses

Hypothetical Year-
End Balance After
Fees and Expenses

Annual Fees and
Expenses ^(a)

5.00

[

]

[

]

10.25

[

]

[

]

15.76

[

]

[

]

21.55

[

]

[

]

27.63

[

]

[

]

34.01

[

]

[

]

40.71

[

]

[

]

47.75

[

]

[

]

55.13

[

]

[

]

62.89

[

]

[

]

Total Gain After Fees and Expenses

[

]

Total Annual Fees and Expenses Paid

[

]

^(a)	Annual Fees and Expenses are calculated based on the average between the beginning and ending balance for each year. All information is calculated on an annual compounding basis.

Columbia North Carolina Intermediate Municipal Bond Fund—Class C Shares

Maximum Initial Sales Charge 0.00%

Initial Hypothetical Investment Amount
$10,000.00

Assumed Rate of Return 5%

Year

Cumulative Return
Before Fees and
Expenses

Annual Expense
Ratio

Cumulative Return
After Fees and
Expenses

Hypothetical Year-
End Balance After
Fees and Expenses

Annual Fees and
Expenses ^(a)

5.00

[

]

[

]

10.25

[

]

[

]

15.76

[

]

[

]

21.55

[

]

[

]

27.63

[

]

[

]

34.01

[

]

[

]

40.71

[

]

[

]

47.75

[

]

[

]

55.13

[

]

[

]

62.89

[

]

[

]

Total Gain After Fees and Expenses

[

]

Total Annual Fees and Expenses Paid

[

]

^(a)	Annual Fees and Expenses are calculated based on the average between the beginning and ending balance for each year. All information is calculated on an annual compounding basis.

LOGO

Columbia North Carolina Intermediate Municipal Bond Fund

Class A, Class B and Class C Shares

Prospectus, August 1, 2010

For More Information


By Mail:		Columbia Funds c/o Columbia Management Investment Services Corp. P.O. Box 8081 Boston, MA 02266-8081

By Telephone:		800.345.6611

Online:		www.columbiafunds.com

Annual and Semi-Annual Reports to Shareholders

Shareholder Communications with the Board

Statement of Additional Information

The SAI provides more detailed information about the Fund and its policies. The SAI is legally part of this prospectus (incorporated by reference). A copy has been filed with the SEC.

Information Provided by the SEC

FUNDamentals™ is a trademark of Ameriprise Financial.

The investment company registration number of Columbia Funds Series Trust, of which the Fund is a series, is 811-09645.

One Financial Center, Boston, MA 02111-2621

800.345.6611 www.columbiafunds.com

INT-36/[ ]-0810

LOGO

Prospectus

August 1, 2010

Columbia Funds

Columbia North Carolina Intermediate Municipal Bond Fund

Ticker symbol

Class Z Shares NNIBX

Table of Contents


Columbia North Carolina Intermediate Municipal Bond Fund		3

Investment Objective		3

Fees and Expenses of the Fund		3

Principal Investment Strategies		5

Principal Risks		5

Performance Information		8

Investment Adviser and Portfolio Manager(s)		9

Purchase and Sale of Fund Shares		9

Tax Information		9

Payments to Broker-Dealers and Other Financial Intermediaries		9

Additional Investment Strategies and Policies		10

Management of the Fund		12

Primary Service Providers		12

Other Roles and Relationships of Ameriprise Financial and its Affiliates—Certain Conflicts of Interest		14

Certain Legal Matters		15

About Class Z Shares		16

Description of the Share Class		16

Financial Intermediary Compensation		17

Buying, Selling and Exchanging Shares		18

Share Price Determination		18

Transaction Rules and Policies		19

Opening an Account and Placing Orders		23

Distributions and Taxes		27

Financial Highlights		31

Hypothetical Fees and Expenses		32

Icons Guide

Investment Objective

Fees and Expenses of the Fund

Principal Investment Strategies

Principal Risks

Performance Information

Other Roles and Relationships of Ameriprise Financial and its Affiliates - Certain Conflicts of Interest

Columbia North Carolina Intermediate Municipal Bond Fund

Investment Objective

The Fund seeks current income exempt from federal income tax and North Carolina individual income tax, consistent with moderate fluctuation of principal.

Fees and Expenses of the Fund

This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.

Shareholder Fees (fees paid directly from your investment)


		Class Z Shares
Maximum sales charge (load) imposed on purchases, as a % of offering price		N/A
Maximum deferred sales charge (load) imposed on redemptions, as a % of the lower of the original purchase price or net asset value		N/A

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)


	Class Z Shares
Management fees	0.55	%
Distribution and/or service (Rule 12b-1) fees	0.00	%
Other expenses	[	]%
Acquired fund fees and expenses	0.01	%
Total annual Fund operating expenses (a)	[	]%

(a)	“Total annual Fund operating expenses” do not match “Net Expenses” in the Financial Highlights section of this prospectus, which does not include, among other things, fees and expenses incurred as a result of investment in shares of certain pooled investment vehicles.

Example

The following example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds.

The example illustrates the hypothetical expenses that you would incur over the time periods indicated, and assumes that:

•

you invest $10,000 in Class Z shares of the Fund for the periods indicated,

•

your investment has a 5% return each year, and

•

the Fund’s total annual operating expenses remain the same as shown in the table above.

Based on the assumptions listed above, your costs would be:

1 year

3 years

5 years

10 years

Class Z Shares

[

]

[

]

[

]

[

]

Remember this is an example only. Your actual costs may be higher or lower.

Portfolio Turnover

Principal Investment Strategies

Under normal circumstances, the Fund invests at least 80% of its net assets in securities that pay interest exempt from federal income tax (but not necessarily the federal alternative minimum tax) and North Carolina individual income tax. These securities are issued by or on behalf of the State of North Carolina, its political subdivisions, agencies, instrumentalities and authorities, and other qualified issuers.

Principal Risks

•

Interest Rate Risk – Debt securities are subject to interest rate risk. In general, if prevailing interest rates rise, the values of debt securities will tend to fall, and if interest rates fall, the values of debt securities will tend to rise. Changes in the value of a debt security usually will not affect the amount of income the Fund receives from it but may affect the value of the Fund’s shares. Interest rate risk is generally greater for debt securities with longer maturities/durations.

•

Derivatives Risk – Derivatives are financial contracts whose values are, for example, based on (or “derived” from) traditional securities (such as a stock or bond), assets (such as a commodity like gold or a foreign currency), reference rates (such as LIBOR) or market indices (such as the S&P 500 ^® Index). Derivatives involve special risks and may result in losses or may limit the Fund’s potential gain from favorable market movements. Derivative strategies often involve leverage, which may exaggerate a loss, potentially causing the Fund to lose more money than it would have lost had it invested in the underlying security or other asset. The values of derivatives may move in unexpected ways, especially in unusual market conditions, and may result in increased volatility, among other consequences. The use of derivatives may also increase the amount of taxes payable by shareholders holding shares in a taxable account. Other risks arise from the Fund’s potential inability to terminate or to sell derivative positions. A liquid secondary market may not always exist for the Fund’s derivative positions at times when the Fund might wish to terminate or to sell such positions. Over-the-counter instruments (investments not traded on an exchange) may be illiquid, and transactions in derivatives traded in the over-the-counter market are subject to the risk that the other party will not meet its obligations. The use of derivatives also involves the risks of mispricing or improper valuation and that changes in the value of the derivative may not correlate perfectly with the underlying security, asset, reference rate or index. The Fund also may not be able to find a suitable derivative transaction counterparty, and thus may be unable to engage in derivative transactions when it is deemed favorable to do so, or at all. For more information on the risks of derivative investments and strategies, see the Statement of Additional Information.

•

investments decline.

•

Performance Information

Year by Year Total Return (%) as of December 31 Each Year*

The bar chart below shows you how the performance of the Fund’s Class Z shares has varied from year to year.

LOGO

*	Year-to-date return as of June 30, 2010: [ ]%

Best and Worst Quarterly Returns During this Period


Best:	[ ] quarter [ ]:	[ ]%
Worst:	[ ] quarter [ ]:	[ ]%

Average Annual Total Return as of December 31, 2009


	1 year		5 years		10 years
Class Z shares returns before taxes	[	]%	[	]%	[	]%
Class Z shares returns after taxes on distributions	[	]%	[	]%	[	]%
Class Z shares returns after taxes on distributions and sale of Fund shares	[	]%	[	]%	[	]%
Barclays Capital 3-15 Year Blend Municipal Bond Index (reflects no deductions for fees, expenses or taxes)	[	]%	[	]%	[	]%

Investment Adviser and Portfolio Manager(s)

Investment Adviser

Columbia Management Investment Advisers, LLC

Portfolio Manager

James D’Arcy, CFA

Manager. Service with the Fund since 2010.

Purchase and Sale of Fund Shares

Tax Information

Payments to Broker-Dealers and Other Financial Intermediaries

Additional Investment Strategies and Policies

Changing the Fund’s Investment Objective and Policies

Investment Guidelines

Holding Other Kinds of Investments

Investing in Money Market Funds

Lending Securities

Portfolio Holdings Disclosure

The Fund’s complete portfolio holdings as of a quarter-end are disclosed approximately 30 calendar days after such quarter-end.

In addition, more current information concerning the Fund’s portfolio holdings as of specified dates also may be disclosed on the Columbia Funds’ website.

Investing Defensively

The Fund may from time to time take temporary defensive investment positions that are inconsistent with the Fund’s

Mailings to Households

Additional Information on Portfolio Turnover

A mutual fund that replaces, or turns over, more than 100% of its investments in a year is considered to have a high portfolio turnover rate. A high portfolio turnover rate can generate larger distributions of short-term capital gains to shareholders, which for individuals are generally taxable at higher rates than long-term capital gains for U.S. federal income tax purposes. A high portfolio turnover rate can also mean higher brokerage and other transaction costs, which could reduce a fund’s returns. In general, the greater the volume of buying and selling by a fund, the greater the impact that brokerage commissions will have on its returns. The Fund generally buys securities for capital appreciation, investment income or both. However, the Fund may sell securities regardless of how long they’ve been held. You’ll find the Fund’s portfolio turnover rate for its most recent fiscal year in the Fees and Expenses of the Fund — Portfolio Turnover section of this prospectus and portfolio turnover rates for prior fiscal years in the Financial Highlights section of this prospectus.

Management of the Fund

Primary Service Providers

The Adviser

Subadviser(s)

The SEC has issued an order that permits the Adviser, subject to the approval of the Board, to appoint an unaffiliated subadviser or to change the terms of a subadvisory agreement for the Fund without first obtaining shareholder approval. The order permits the Fund to add or to change unaffiliated subadvisers or to change the fees paid to subadvisers from time to time without the expense and delays associated with obtaining shareholder approval of the change. The Adviser and its affiliates may have other relationships, including significant financial relationships, with current or potential subadvisers or their affiliates, which may create certain conflicts of interest. When making recommendations to the Board to appoint or to change a subadviser, or to change the terms of a subadvisory agreement, the Adviser discloses to the Board the nature of any material relationships it has with a subadviser or its affiliates.

At present, the Adviser has not engaged any investment subadviser for the Fund.

Portfolio Manager

James D’Arcy, CFA

Manager. Service with the Fund since 2010.

The Administrator

Annual Administration Fee,

as a % of Average Daily Net Assets


Columbia North Carolina Intermediate Municipal Bond Fund		0.15	%

The Distributor

The Transfer Agent

The Transfer Agent is a registered transfer agent and a wholly-owned subsidiary of Ameriprise Financial. The Transfer Agent’s responsibilities include processing purchases, sales and exchanges, calculating and paying distributions, keeping shareholder records, preparing account statements and providing customer service. The Fund pays the Transfer Agent monthly fees on a per-account basis. Fees paid to the Transfer Agent include reimbursements for certain out-of-pocket expenses and sub-transfer agency fees, subject to certain limitations, paid by the Transfer Agent on the Fund’s behalf.

Expense Reimbursement Arrangements

Other Roles and Relationships of Ameriprise Financial and its Affiliates—Certain Conflicts of Interest

Conflicts of interest and limitations that could affect a Columbia Fund may arise from, for example, the following:

•

compensation and other benefits received by the Adviser and other Ameriprise Financial affiliates related to the management/administration of a Columbia Fund and the sale of its shares;

•

separate and potentially divergent management of a Columbia Fund and other funds and accounts advised/managed by the Adviser and other Ameriprise Financial affiliates;

•

regulatory and other investment restrictions on investment activities of the Adviser and other Ameriprise Financial affiliates and accounts advised/managed by them;

•

insurance and other relationships of Ameriprise Financial affiliates with companies and other entities in which a Columbia Fund invests; and

•

regulatory and other restrictions relating to the sharing of information between Ameriprise Financial and its affiliates, including the Adviser, and a Columbia Fund.

Certain Legal Matters

Ameriprise Financial and certain of its affiliates have historically been involved in a number of legal, arbitration and regulatory proceedings, including routine litigation, class actions and governmental actions, concerning matters arising in connection with the conduct of their business activities. Ameriprise Financial believes that the Fund is not currently the subject of, and that neither Ameriprise Financial nor any of its affiliates is the subject of, any pending legal, arbitration or regulatory proceedings that are likely to have a material adverse effect on the Fund or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Fund. Information regarding certain pending and settled legal proceedings may be found in the Fund’s shareholder reports and in the SAI. Additionally, Ameriprise Financial is required to make 10-Q, 10-K and, as necessary, 8-K filings with the SEC on legal and regulatory matters that relate to Ameriprise Financial and its affiliates. Copies of these filings may be obtained by accessing the SEC website at www.sec.gov.

About Class Z Shares

Description of the Share Class

Share Class Features


		Class Z Shares
Eligible Investors and Minimum Initial Investments		Class Z shares are available only to certain eligible investors, which are subject to different minimum initial investment requirements. These minimum initial investment amounts range from $0 to $2,500. See Buying, Selling and Exchanging Shares - Opening an Account and Placing Orders for details.

Investment Limits		none

Conversion Features		none

Front-End Sales Charges		none

Contingent Deferred Sales Charges (CDSCs)		none

Maximum Distribution and Service Fees		none

FUNDamentals ^TM

Selling and/or Servicing Agents

The terms “selling agent” and “servicing agent” refer to the financial intermediary that employs your financial advisor. Selling and/or servicing agents include, for example, brokerage firms, banks, investment advisors, third party administrators and other financial intermediaries, including Ameriprise Financial and its affiliates.

Financial Intermediary Compensation

The Distributor and the Adviser make payments, from their own resources, to certain financial intermediaries, including other Ameriprise Financial affiliates, for marketing/sales support services relating to the Columbia Funds. Such payments are generally based upon one or more of the following factors: average net assets of the Columbia Funds sold by the Distributor attributable to that intermediary, gross sales of the Columbia Funds distributed by the Distributor attributable to that intermediary, reimbursement of ticket charges (fees that an intermediary firm charges its representatives for effecting transactions in Fund shares) or a negotiated lump sum payment. While the financial arrangements may vary for each intermediary, the support payments to any one intermediary are generally between 0.05% and 0.50% on an annual basis for payments based on average net assets of the Fund attributable to the intermediary, and between 0.05% and 0.25% on an annual basis for firms receiving a payment based on gross sales of the Columbia Funds attributable to the intermediary.

These payments for shareholder servicing support vary by financial intermediary but generally are not expected, with certain limited exceptions, to exceed 0.40% of the average aggregate value of the Fund’s shares in any financial intermediary’s program on an annual basis for those classes of shares that pay a service fee pursuant to a plan under Rule 12b-1 under the 1940 Act, and 0.45% of the average aggregate value of the Fund’s shares in any financial intermediary’s program on an annual basis for those classes of shares that do not pay a service fee pursuant to a plan under Rule 12b-1 under the 1940 Act.

Amounts paid by the Distributor and the Adviser and their affiliates are paid out of the Distributor’s and the Adviser’s own resources and do not increase the amount paid by you or the Fund. You can find further details about the payments made by the Distributor and the Adviser and their affiliates and the services provided by financial intermediaries as well as a list of the intermediaries to which the Distributor and the Adviser have agreed to make marketing support payments in the SAI. Your financial intermediary may charge you fees and commissions in addition to those described in this prospectus. You should consult with your financial intermediary and review carefully any disclosure your financial intermediary provides regarding its services and compensation. Depending on the financial arrangement in place at any particular time, a financial intermediary and its financial consultants may have a financial incentive for recommending the Fund or a particular share class over others. See Management of the Fund – Other Roles and Relationships of Ameriprise Financial and its Affiliates – Certain Conflicts of Interest for more information.

Buying, Selling and Exchanging Shares

Share Price Determination

FUNDamentals ^TM

NAV Calculation

Each of the Fund’s share classes calculates its NAV as follows:


		(Value of assets of the share class)
NAV =		—(Liabilities of the share class)
		Number of outstanding shares of the class

Transaction Rules and Policies

Also remember that the Fund may refuse any order to buy or exchange shares. If this happens, we’ll return any money we’ve received, but no interest will be paid on that money.

Order Processing

FUNDamentals ^TM

Business Days

A business day is any day that the New York Stock Exchange (NYSE) is open. A business day ends at the close of regular trading on the NYSE, usually at 4:00 p.m. Eastern time. If the NYSE closes early, the business day ends as of the time the NYSE closes. On holidays and other days when the NYSE is closed, the Fund’s net asset value is not calculated and the Fund does not accept buy or sell orders. However, the value of the Fund’s assets may still be affected on such days to the extent that the Fund holds foreign securities that trade on days that foreign securities markets are open.

“Good Form”

An order is in “good form” if the Transfer Agent or your selling and/or servicing agent has all of the information and documentation it deems necessary to effect your order. For example, when you sell shares by letter of instruction, “good form” means that your letter has (i) complete instructions and the signatures of all account owners, (ii) a Medallion signature guarantee for amounts equal to or greater than $100,000 and (iii) any other required documents completed and attached. For the documents required for sales by corporations, agents, fiduciaries, surviving joint owners and other legal entities, call 800.345.6611.

Medallion Signature Guarantees

Written Transactions

Telephone Transactions

Telephone orders may not be as secure as written orders. Columbia Funds will take reasonable steps to confirm that telephone instructions are genuine. For example, we require proof of your identification before we will act on instructions received by telephone and may record telephone conversations. However, the Fund and its agents will not be responsible for any losses, costs or expenses resulting from an unauthorized telephone instruction when reasonable steps have been taken to confirm that telephone instructions are

genuine. Telephone orders may be difficult to complete during periods of significant economic or market change or business interruption.

Online Transactions

Once you have an account, contact Columbia Funds at 800.345.6611 for more information on account trading restrictions and the special sign-up procedures required for online transactions. The Transfer Agent has procedures in place to authenticate electronic orders you deliver through the internet. You will be required to accept the terms of an online agreement and to establish and utilize a password in order to access online account services.

You can sell up to an aggregate of $100,000 of shares through the internet in any 30-day period if you qualify for internet orders.

Customer Identification Program

Small Account Policy—Accounts Below $250

Small Account Policy—Minimum Balance Fee

Exceptions to the Above Small Account Policy (Accounts Below $250 and Minimum Balance Fee)

Small Account Policy—Broker/Dealer and Wrap Fee Accounts

Columbia Funds may automatically redeem shares at any time from broker/dealer networked accounts and wrap fee accounts that have account balances of $20 or less or that have less than one share.

Cash Flows

Information Sharing Agreements

As required by Rule 22c-2 under the 1940 Act, the Columbia Funds or certain of their service providers will enter into information sharing agreements with financial intermediaries, including participating life insurance companies and financial intermediaries that sponsor or offer retirement plans through which shares of the Columbia Funds are made available for purchase. Pursuant to Rule 22c-2, financial intermediaries are required, upon request, to: (i) provide shareholder account and transaction information and (ii) execute instructions from the Fund to restrict or prohibit further purchases of Fund shares by shareholders who have been identified by the Fund as having engaged in transactions that violate the Fund’s excessive trading policies and procedures. See Buying, Selling and Exchanging Shares – Excessive Trading Practices for more information.

Excessive Trading Practices

Some financial intermediaries apply their own restrictions or policies to underlying investor accounts, which may be more or less restrictive than those described here. This may impact the Fund’s ability to curtail excessive trading, even where it is identified. For these and other reasons, it is possible that excessive trading may occur despite the Fund’s efforts to detect and prevent it.

Risks of Excessive Trading – Excessive trading creates certain risks to the Fund’s long-term shareholders and may create the following adverse effects:

•

negative impact on the Fund’s performance;

•

potential dilution of the value of the Fund’s shares;

•

losses on the sale of investments resulting from the need to sell securities at less favorable prices;

•

increased taxable gains to the Fund’s remaining shareholders resulting from the need to sell securities to meet sell orders; and

•

increased brokerage and administrative costs.

Opening an Account and Placing Orders

Columbia Funds encourages you to consult with a financial advisor who can help you with your investment decisions and who can help you open an account. Once you have an account, you can buy, sell and exchange shares by contacting your financial advisor who will send your order to the Transfer Agent or your selling and/or servicing agent. As described in Buying, Selling and Exchanging Shares – Transaction Rules and Policies , once you have an account you can also communicate your orders directly to the Transfer Agent by mail, by telephone or online.

Buying Shares

Minimum Initial Investments

There is no minimum initial investment in Class Z shares for the following categories of eligible investors:

•

The minimum initial investment in Class Z shares for the following categories of eligible investors is $1,000:

•

The minimum initial investment in Class Z shares for the following categories of eligible investors is $2,500:

•

Any investor buying shares through a Columbia Management state tuition plan organized under Section 529 of the Internal Revenue Code.

•

Any trustee or director (or family member of a trustee or director) of a fund distributed by the Distributor.

•

Any employee (or family member of an employee) of Bank of America or one of its subsidiaries.

•

Any institutional investor who is a corporation, partnership, trust, foundation, endowment, institution, government

entity, or similar organization, which meets the respective qualifications for an accredited investor, as defined under the Securities Act of 1933.

•

For investors establishing a Systematic Investment Plan, the minimum initial investment is $50.

Minimum Additional Investments

There is no minimum additional investment for Class Z shares.

Systematic Investment Plan

Dividend Diversification

Wire Purchases

You may buy Class Z shares of the Fund by wiring money from your bank account to your Fund account by calling the Transfer Agent at 800.422.3737.

Electronic Funds Transfer

Other Purchase Rules You Should Know

•

Once the Transfer Agent or your selling and/or servicing agent receives your buy order in “good form,” your purchase will be made at the next calculated net asset value per share.

•

You generally buy Class Z shares at net asset value because no front-end sales charge applies to purchases of this share class.

•

Selling and/or servicing agents are responsible for sending your buy orders to the Transfer Agent and ensuring that we receive your money on time.

•

Shares bought are recorded on the books of the Fund. The Fund doesn’t issue certificates.

Selling Shares

When you sell your shares, the Fund is effectively buying them back from you. This is called a redemption.

Wire Redemptions

Electronic Funds Transfer

Systematic Withdrawal Plan

In-Kind Distributions

Other Redemption Rules You Should Know

•

Once the Transfer Agent or your selling and/or servicing agent receives your sell order in “good form,” your shares will be sold at the next calculated net asset value per share.

•

No interest will be paid on uncashed redemption checks.

•

Other restrictions may apply to retirement accounts. For information about these restrictions, contact your retirement plan administrator.

•

Also keep in mind Columbia Funds’ Small Account Policy, which is described above in Buying, Selling and Exchanging Shares – Transaction Rules and Policies .

Exchanging Shares

Systematic Exchanges

The rules described below for making exchanges apply to systematic exchanges.

Other Exchange Rules You Should Know

•

Exchanges are made at net asset value.

•

You can generally make exchanges between like share classes of any Columbia Fund. Some exceptions apply.

•

The rules for buying shares of a Columbia Fund generally apply to exchanges into that Fund.

•

You may make exchanges only into a Columbia Fund that is legally offered and sold in your state of residence.

•

You generally may make an exchange only into a Columbia Fund that is accepting investments.

•

The Fund may change or cancel your right to make an exchange by giving the amount of notice required by regulatory authorities (generally 60 days for a material change or cancellation).

•

Unless your account is part of a tax-advantaged arrangement, an exchange for shares of another fund is a taxable event, and you may recognize a gain or loss for tax purposes.

Distributions and Taxes

Distributions to Shareholders

A mutual fund can make money two ways:

•

It can earn income on its investments. Examples of fund income are interest paid on money market instruments and bonds, and dividends paid on common stocks.

•

FUNDamentals ^TM

Distributions

Declaration and Distribution Schedule


Declarations		daily
Distributions		monthly

The Fund may, however, pay distributions of net investment income more frequently.

If you buy shares of the Fund when it holds securities with unrealized capital gain, you may, in effect, receive part of your purchase price back if and when the Fund sells those

Taxes and Your Investment

•

To the extent distributions are taxable, such distributions generally are taxable to you when paid, whether they are paid in cash or automatically reinvested in additional shares of the Fund.

•

Distributions of the Fund’s net interest income from tax-exempt securities generally are not subject to federal income tax, but may be subject to state and local income and other taxes, as well as federal and state alternative minimum tax. Distributions of the Fund’s net interest income from tax-exempt securities of North Carolina and its subdivisions generally also are not subject to North Carolina individual income tax.

•

FUNDamentals ^TM

Taxes

Financial Highlights

Columbia North Carolina Intermediate Municipal Bond Fund—Class Z Shares


	Year Ended March 31, 2010			Year Ended March 31, 2009			Year Ended March 31, 2008			Year Ended March 31, 2007			Year Ended March 31, 2006 ^(a)
Net Asset Value, Beginning of Period	$	[	]	$	10.07		$	10.38		$	10.39		$	10.56
Income from Investment Operations:
Net investment income ^(b)		[	]		0.40			0.41			0.42			0.43
Net realized and unrealized gain (loss) on investments and futures contracts		[	]		(0.28	)		(0.31	)		0.05			(0.16	)
Total from investment operations		[	]		0.12			0.10			0.47			0.27
Less Distributions to Shareholders:
From net investment income		[	]		(0.40	)		(0.41	)		(0.42	)		(0.44	)
From net realized gains		[	]		—			—	^(c)		(0.06	)		—
Total distributions to shareholders		[	]		(0.40	)		(0.41	)		(0.48	)		(0.44	)
Net Asset Value, End of Period	$	[	]	$	9.79		$	10.07		$	10.38		$	10.39
Total return ^(d)(e)		[	]%		1.22	%		0.99	%		4.59	%		2.53	%
Ratios to Average Net Assets/Supplemental Data:
Net expenses before interest expense		[	]%		0.50	% ^(f)		0.50	% ^(f)		0.50	% ^(f)		0.50	% ^(f)
Interest expense		[	]		—			—			—			—
Net expenses		[	]%		0.50	% ^(f)		0.50	% ^(f)		0.50	% ^(f)		0.50	% ^(f)
Waiver/Reimbursement		[	]%		0.14	%		0.16	%		0.18	%		0.17	%
Net investment income		[	]%		4.03	% ^(f)		3.99	% ^(f)		4.05	% ^(f)		4.14	% ^(f)
Portfolio turnover rate		[	]%		20	%		25	%		17	%		16	%
Net assets, end of period (000’s)	$	[	]	$	163,885		$	154,515		$	155,432		$	138,854

^(a)	On August 22, 2005, the Fund’s Primary A shares were renamed Class Z shares.

^(b)	Per share data was calculated using the average shares outstanding during the period.

^(c)	Rounds to less than $0.01 per share.

^(d)	Total return at net asset value assuming all distributions reinvested.

^(e)	Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

^(f)	The benefits derived from expense reductions had an impact of less than 0.01%.

^(g)	Rounds to less than 0.01%.

Hypothetical Fees and Expenses

The following supplemental hypothetical investment information provides additional information about the effect of the fees and expenses of the Fund, including investment advisory fees and other Fund costs, on the Fund’s returns over a 10-year period. The chart shows the estimated fees and expenses that would be charged on a hypothetical investment of $10,000 in Class Z shares of the Fund, assuming a 5% return each year, the cumulative return after fees and expenses and the hypothetical year-end balance after fees and expenses. The chart also assumes that all dividends and distributions are reinvested. The annual expense ratio used for the share class, which is the same as that stated in the Annual Fund Operating Expenses table, is presented in the chart and is net of any contractual fee waivers or expense reimbursements for the period of contractual commitment. Your actual costs may be higher or lower.

Columbia North Carolina Intermediate Municipal Bond Fund—Class Z Shares

Maximum Initial Sales Charge 0.00%

Initial Hypothetical Investment Amount
$10,000.00

Assumed Rate of Return 5%

Year

Cumulative Return
Before Fees and
Expenses

Annual Expense
Ratio

Cumulative Return
After Fees and
Expenses

Hypothetical Year-
End Balance After
Fees and Expenses

Annual Fees and
Expenses ^(a)

5.00

[

]

[

]

10.25

[

]

[

]

15.76

[

]

[

]

21.55

[

]

[

]

27.63

[

]

[

]

34.01

[

]

[

]

40.71

[

]

[

]

47.75

[

]

[

]

55.13

[

]

[

]

62.89

[

]

[

]

Total Gain After Fees and Expenses

[

]

Total Annual Fees and Expenses Paid

[

]

^(a)	Annual Fees and Expenses are calculated based on the average between the beginning and ending balance for each year. All information is calculated on an annual compounding basis.

LOGO

Columbia North Carolina Intermediate Municipal Bond Fund

Class Z Shares

Prospectus, August 1, 2010

For More Information


By Mail:		Columbia Funds c/o Columbia Management Investment Services Corp. P.O. Box 8081 Boston, MA 02266-8081

By Telephone:		800.345.6611

Online:		www.columbiafunds.com

Annual and Semi-Annual Reports to Shareholders

Shareholder Communications with the Board

Statement of Additional Information

The SAI provides more detailed information about the Fund and its policies. The SAI is legally part of this prospectus (incorporated by reference). A copy has been filed with the SEC.

Information Provided by the SEC

FUNDamentals™ is a trademark of Ameriprise Financial.

The investment company registration number of Columbia Funds Series Trust, of which the Fund is a series, is 811-09645.

One Financial Center, Boston, MA 02111-2621

800.345.6611 www.columbiafunds.com

INT-36/[ ]-0810

LOGO

Prospectus

August 1, 2010

Columbia Funds

Columbia South Carolina Intermediate Municipal Bond Fund

Ticker symbols

Class A Shares NSCIX

Class B Shares NISCX

Class C Shares NSICX

Table of Contents


Columbia South Carolina Intermediate Municipal Bond Fund		3

Investment Objective		3

Fees and Expenses of the Fund		3

Principal Investment Strategies		5

Principal Risks		5

Performance Information		8

Investment Adviser and Portfolio Manager(s)		9

Purchase and Sale of Fund Shares		9

Tax Information		9

Payments to Broker-Dealers and Other Financial Intermediaries		9

Additional Investment Strategies and Policies		10

Management of the Fund		12

Primary Service Providers		12

Other Roles and Relationships of Ameriprise Financial and its Affiliates—Certain Conflicts of Interest		14

Certain Legal Matters		15

Choosing a Share Class		16

Comparison of the Share Classes		16

Sales Charges and Commissions		17

Reductions/Waivers of Sales Charges		21

Distribution and Service Fees		23

Financial Intermediary Compensation		24

Buying, Selling and Exchanging Shares		25

Share Price Determination		25

Transaction Rules and Policies		26

Opening an Account and Placing Orders		30

Distributions and Taxes		34

Financial Highlights		38

Hypothetical Fees and Expenses		41

Icons Guide

LOGO Investment Objective

LOGO Fees and Expenses of the Fund

LOGO Principal Investment Strategies

LOGO Principal Risks

LOGO Performance Information

LOGO Other Roles and Relationships of Ameriprise Financial and its Affiliates - Certain Conflicts of Interest

Columbia South Carolina Intermediate Municipal Bond Fund

Investment Objective

The Fund seeks current income exempt from federal income tax and South Carolina individual income tax, consistent with moderate fluctuation of principal.

Fees and Expenses of the Fund

Shareholder Fees (fees paid directly from your investment)


	Class A Shares		Class B Shares		Class C Shares
Maximum sales charge (load) imposed on purchases, as a % of offering price	3.25	%	N/A		N/A
Maximum deferred sales charge (load) imposed on redemptions, as a % of the lower of the original purchase price or net asset value	1.00	% ^(a)	3.00	% ^(b)	1.00	% ^(c)

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)


	Class A Shares		Class B Shares		Class C Shares
Management fees	0.55	%	0.55	%	0.55	%
Distribution and/or service (Rule 12b-1) fees	0.25	%	1.00	%	1.00	%
Other expenses	[	]%	[	]%	[	]%
Acquired fund fees and expenses	0.01	%	0.01	%	0.01	%
Total annual Fund operating expenses ^(d)	[	]%	[	]%	[	]%

^(a)	This charge applies to investors who buy $1 million or more of Class A shares and redeem them within one year of purchase, with certain limited exceptions.

^(b)	This charge decreases over time.

^(c)	This charge applies to investors who buy Class C shares and redeem them within one year of purchase, with certain limited exceptions.

^(d)	“Total annual Fund operating expenses” do not match “Net Expenses” in the Financial Highlights section of this prospectus, which does not include, among other things, fees and expenses incurred as a result of investment in shares of certain pooled investment vehicles.

Example

The following example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds.

The example illustrates the hypothetical expenses that you would incur over the time periods indicated, and assumes that:

•

you invest $10,000 in Class A, Class B or Class C shares of the Fund for the periods indicated,

•

your investment has a 5% return each year, and

•

the Fund’s total annual operating expenses remain the same as shown in the table above.

Based on the assumptions listed above, your costs would be:

1 year

3 years

5 years

10 years

Class A Shares

[

]

[

]

[

]

[

]

Class B Shares

Assuming no redemption of shares

[

]

[

]

[

]

[

]

Assuming complete redemption of shares at the end of the period

[

]

[

]

[

]

[

]

Class C Shares

Assuming no redemption of shares

[

]

[

]

[

]

[

]

Assuming complete redemption of shares at the end of the period

[

]

[

]

[

]

[

]

Remember this is an example only. Your actual costs may be higher or lower.

Portfolio Turnover

Principal Investment Strategies

Under normal circumstances, the Fund invests at least 80% of its net assets in securities that pay interest exempt from federal income tax (but not necessarily the federal alternative minimum tax) and South Carolina individual income tax. These securities are issued by or on behalf of the State of South Carolina, its political subdivisions, agencies, instrumentalities and authorities, and other qualified issuers.

Principal Risks

•

Interest Rate Risk – Debt securities are subject to interest rate risk. In general, if prevailing interest rates rise, the values of debt securities will tend to fall, and if interest rates fall, the values of debt securities will tend to rise. Changes in the value of a debt security usually will not affect the amount of income the Fund receives from it but may affect the value of the Fund’s shares. Interest rate risk is generally greater for debt securities with longer maturities/durations.

•

Derivatives Risk – Derivatives are financial contracts whose values are, for example, based on (or “derived” from) traditional securities (such as a stock or bond), assets (such as a commodity like gold or a foreign currency), reference rates (such as LIBOR) or market indices (such as the S&P 500 ^® Index). Derivatives involve special risks and may result in losses or may limit the Fund’s potential gain from favorable market movements. Derivative strategies often involve leverage, which may exaggerate a loss, potentially causing the Fund to lose more money than it would have lost had it invested in the underlying security or other asset. The values of derivatives may move in unexpected ways, especially in unusual market conditions, and may result in increased volatility, among other consequences. The use of derivatives may also increase the amount of taxes payable by shareholders holding shares in a taxable account. Other risks arise from the Fund’s potential inability to terminate or to sell derivative positions. A liquid secondary market may not always exist for the Fund’s derivative positions at times when the Fund might wish to terminate or to sell such positions. Over-the-counter instruments (investments not traded on an exchange) may be illiquid, and transactions in derivatives traded in the over-the-counter market are subject to the risk that the other party will not meet its obligations. The use of derivatives also involves the risks of mispricing or improper valuation and that changes in the value of the derivative may not correlate perfectly with the underlying security, asset, reference rate or index. The Fund also may not be able to find a suitable derivative transaction counterparty, and thus may be unable to engage in derivative transactions when it is deemed favorable to do so, or at all. For more information on the risks of derivative investments and strategies, see the Statement of Additional Information.

•

Low and Below Investment Grade Securities Risk – Debt securities with the lowest investment grade rating (e.g., BBB by Standard & Poor’s, a division of the McGraw & Hill Companies, Inc. (Standard & Poor’s) or Fitch) or that are below investment grade (which are commonly referred to as “junk bonds”) (e.g., BB or below by Standard & Poor’s, or Fitch, Inc. (Fitch)) are more speculative than securities with higher ratings, and tend to be more sensitive to credit risk, particularly during a downturn in the economy, which is more likely to weaken the ability of the issuers to make principal and interest payments on these securities than is the case for higher-rated securities. These securities typically pay a premium – a higher interest rate or yield – because of the increased risk of loss, including default. These securities also are generally less liquid than higher-rated securities. The securities ratings provided by Moody’s Investors Service, Inc. (Moody’s), Standard & Poor’s and Fitch are based on analyses by these ratings agencies of the credit quality of the securities and may not take into account every risk related to whether interest or principal will be timely repaid.

•

Performance Information

Year by Year Total Return (%) as of December 31 Each Year ^*

LOGO

*	Year-to-date return as of June 30, 2010: [ ]%

Best and Worst Quarterly Returns During this Period


Best:	[ ] quarter [ ]:	[ ]%
Worst:	[ ] quarter [ ]:	[ ]%

Average Annual Total Return as of December 31, 2009


	1 year		5 years		10 years
Class A shares returns before taxes	[	]%	[	]%	[	]%
Class A shares returns after taxes on distributions	[	]%	[	]%	[	]%
Class A shares returns after taxes on distributions and sale of Fund shares	[	]%	[	]%	[	]%
Class B shares returns before taxes	[	]%	[	]%	[	]%
Class C shares returns before taxes	[	]%	[	]%	[	]%
Barclays Capital 3-15 Year Blend Municipal Bond Index (reflects no deductions for fees, expenses or taxes)	[	]%	[	]%	[	]%

Investment Adviser and Portfolio Manager(s)

Investment Adviser

Columbia Management Investment Advisers, LLC

Portfolio Manager

James D’Arcy, CFA

Manager. Service with the Fund since 2010.

Purchase and Sale of Fund Shares

Tax Information

Payments to Broker-Dealers and Other Financial Intermediaries

Additional Investment Strategies and Policies

Changing the Fund’s Investment Objective and Policies

Investment Guidelines

Holding Other Kinds of Investments

Investing in Money Market Funds

Lending Securities

Portfolio Holdings Disclosure

The Fund’s complete portfolio holdings as of a calendar quarter-end are disclosed approximately 30 calendar days after each such quarter-end.

In addition, more current information concerning the Fund’s portfolio holdings as of specified dates also may be disclosed on the Columbia Funds’ website.

Investing Defensively

Mailings to Households

Additional Information on Portfolio Turnover

A mutual fund that replaces, or turns over, more than 100% of its investments in a year is considered to have a high portfolio turnover rate. A high portfolio turnover rate can generate larger distributions of short-term capital gains to shareholders, which for individuals are generally taxable at higher rates than long-term capital gains for U.S. federal income tax purposes. A high portfolio turnover rate can also mean higher brokerage and other transaction costs, which could reduce a fund’s returns. In general, the greater the volume of buying and selling by a fund, the greater the impact that brokerage commissions will have on its returns. The Fund generally buys securities for capital appreciation, investment income or both. However, the Fund may sell securities regardless of how long they’ve been held. You’ll find the Fund’s portfolio turnover rate for its most recent fiscal year in the Fees and Expenses of the Fund — Portfolio Turnover section of this prospectus and portfolio turnover rates for prior fiscal years in the Financial Highlights section of this prospectus.

Management of the Fund

Primary Service Providers

The Adviser

Subadviser(s)

The SEC has issued an order that permits the Adviser, subject to the approval of the Board, to appoint an unaffiliated subadviser or to change the terms of a subadvisory agreement for the Fund without first obtaining shareholder approval. The order permits the Fund to add or to change unaffiliated subadvisers or to change the fees paid to subadvisers from time to time without the expense and delays associated with obtaining shareholder approval of the change. The Adviser and its affiliates may have other relationships, including significant financial relationships, with current or potential subadvisers or their affiliates, which may create certain conflicts of interest. When making recommendations to the Board to appoint or to change a subadviser, or to change the terms of a subadvisory agreement, the Adviser discloses to the Board the nature of any material relationships it has with a subadviser or its affiliates.

At present, the Adviser has not engaged any investment subadviser for the Fund.

Portfolio Manager

James D’Arcy, CFA

Manager. Service with the Fund since 2010.

The Administrator

Annual Administration Fee,

as a % of Average Daily Net Assets


Columbia South Carolina Intermediate Municipal Bond Fund		0.15	%

The Distributor

The Transfer Agent

The Transfer Agent is a registered transfer agent and a wholly-owned subsidiary of Ameriprise Financial. The Transfer Agent’s responsibilities include processing purchases, sales and exchanges, calculating and paying distributions, keeping shareholder records, preparing account statements and providing customer service. The Fund pays the Transfer Agent monthly fees on a per-account basis. Fees paid to the Transfer Agent include reimbursements for certain out-of-pocket expenses and sub-transfer agency fees, subject to certain limitations, paid by the Transfer Agent on the Fund’s behalf.

Expense Reimbursement Arrangements

Other Roles and Relationships of Ameriprise Financial and its Affiliates—Certain Conflicts of Interest

Conflicts of interest and limitations that could affect a Columbia Fund may arise from, for example, the following:

•

compensation and other benefits received by the Adviser and other Ameriprise Financial affiliates related to the management/administration of a Columbia Fund and the sale of its shares;

•

separate and potentially divergent management of a Columbia Fund and other funds and accounts advised/managed by the Adviser and other Ameriprise Financial affiliates;

•

regulatory and other investment restrictions on investment activities of the Adviser and other Ameriprise Financial affiliates and accounts advised/managed by them;

•

insurance and other relationships of Ameriprise Financial affiliates with companies and other entities in which a Columbia Fund invests; and

•

regulatory and other restrictions relating to the sharing of information between Ameriprise Financial and its affiliates, including the Adviser, and a Columbia Fund.

Additional information about Ameriprise Financial and the types of conflicts of interest and other matters referenced above is set forth in the “Investment Advisory and Other Services – Other Roles and Relationships of Ameriprise Financial and its Affiliates – Certain Conflicts of Interest ” section of the SAI, which is identified by the LOGO icon. Investors in the Columbia Funds should carefully review these disclosures and consult with their financial advisor if they have any questions.

Certain Legal Matters

Ameriprise Financial and certain of its affiliates have historically been involved in a number of legal, arbitration and regulatory proceedings, including routine litigation, class actions and governmental actions, concerning matters arising in connection with the conduct of their business activities. Ameriprise Financial believes that the Fund is not currently the subject of, and that neither Ameriprise Financial nor any of its affiliates is the subject of, any pending legal, arbitration or regulatory proceedings that are likely to have a material adverse effect on the Fund or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Fund. Information regarding certain pending and settled legal proceedings may be found in the Fund’s shareholder reports and in the SAI. Additionally, Ameriprise Financial is required to make 10-Q, 10-K and, as necessary, 8-K filings with the SEC on legal and regulatory matters that relate to Ameriprise Financial and its affiliates. Copies of these filings may be obtained by accessing the SEC website at www.sec.gov.

Choosing a Share Class

Comparison of the Share Classes

Share Class Features


	Class A Shares	Class B Shares	Class C Shares
Eligible Investors and Minimum Initial Investments ^(a)	Minimum initial investments range from $0 to $2,500; the share class is available to the general public for investment.	The Fund no longer accepts investments from new or existing investors in Class B shares, except through a reinvestment of a dividend or capital gain distribution, or a permitted exchange as described in more detail under Buying, Selling and Exchanging Shares - Opening an Account and Placing Orders – Buying Shares - Class B Shares Closing .	Minimum initial investments range from $0 to $2,500; the share class is available to the general public for investment.

Investment Limits	none	up to $49,999 (based on aggregate account value) ^(b)	up to $999,999

Conversion Features	none	convert to Class A shares eight years after purchase	none

Front-End Sales Charges ^(c)	3.25% maximum, declining to 0.00% on investments of $1 million or more	none	none

Contingent Deferred Sales Charges (CDSCs) ^(c)	none, except a 1.00% CDSC applies to certain investments of between $1 million and $50 million sold within one year of purchase	3.00% maximum, gradually declining to 0.00% after four years	1.00% on investments sold within one year of purchase

Maximum Distribution and Service Fees	0.25% combined distribution and service fee	0.75% distribution fee 0.25% service fee	0.75% distribution fee 0.25% service fee

^(a)	See Buying, Selling and Exchanging Shares – Opening an Account and Placing Orders for more details on the eligible investors and investment minimums of these share classes.

^(b)

^(c)	See Choosing a Share Class – Reductions/Waivers of Sales Charges for information about certain exceptions to these sales charges.

FUNDamentals ^TM

Selling and/or Servicing Agents

The terms “selling agent” and “servicing agent” refer to the financial intermediary that employs your financial advisor. Selling and/or servicing agents include, for example, brokerage firms, banks, investment advisors, third party administrators and other financial intermediaries, including Ameriprise Financial and its affiliates.

Sales Charges and Commissions

Class A Shares—Front-End Sales Charge

FUNDamentals ^TM

Front-End Sales Charge Calculation

The following table presents the front-end sales charge as a percentage of both the offering price and the net amount invested.

•

The offering price per share is the net asset value per share plus any front-end sales charge that applies.

•

The net asset value (or NAV) per share is the price of a share calculated by the Fund every business day.

The dollar amount of the sales charge is the difference between the offering price of the shares you buy (based on the applicable sales charge in the table) and the net asset value of those shares.

The front-end sales charge you’ll pay on Class A shares:

•

depends on the amount you’re investing (generally, the larger the investment, the smaller the percentage sales charge), and

•

is based on the total amount of your purchase and the value of your account.

Class A Shares—Front-End Sales Charge—Breakpoint Schedule


Dollar amount of shares bought ^(a)	Sales charge as a % of the offering price ^(b)		Sales charge as a % of the net amount invested ^(b)		Amount retained by or paid to selling and/or servicing agents as a % of the offering price
$0 – $99,999	3.25	%	3.36	%	3.00	%
$100,000 – $249,999	2.50	%	2.56	%	2.25	%
$250,000 – $499,999	2.00	%	2.04	%	1.75	%
$500,000 – $999,999	1.50	%	1.52	%	1.25	%
$1,000,000 or more	0.00	%	0.00	%	1.00	% ^(c)(d)

^(a)	Purchase amounts and account values are aggregated among all eligible Columbia Fund accounts for the purposes of this table.

^(b)

^(c)

^(d)	For certain group retirement plans, selling and/or servicing agents are eligible to receive a 1.00% commission from the Distributor on all purchases up to $3 million, including those in amounts of less than $1 million that are coded as commission-eligible trades.

Class A Shares—CDSC and Commissions

In some cases, you’ll pay a CDSC if you sell Class A shares that you bought without an initial sales charge.

•

The CDSC on Class A shares:

•

is applied to the net asset value at the time of your purchase or sale, whichever is lower, and

•

will not be applied to any shares you receive through reinvested distributions.

The Distributor may also pay your selling and/or servicing agent a cumulative commission when you buy $1 million or more of Class A shares, according to the following schedule:

Class A Shares—Commission Schedule


Purchase Amount	Commission Level (as a % of net asset value per share)
$1 million – $2,999,999	1.00	%
$3 million – $49,999,999	0.50	%
$50 million or more	0.25	%

FUNDamentals ^TM

Contingent Deferred Sales Charge

Class B and Class C Shares—Sales Charges

You don’t pay a front-end sales charge when you buy Class B or Class C shares, but you may pay a CDSC when you sell Class B or Class C shares.

The CDSC on Class B and Class C shares:

•

is applied to the net asset value at the time of your purchase or sale, whichever is lower,

•

will not be applied to any shares you receive through reinvested distributions, and

•

generally declines each year until there is no sales charge for selling shares.

Class B Shares—CDSC and Commissions

Class B Shares—CDSC Schedule


Number of Years Class B Shares Held		Applicable CDSC
One		3.00%
Two		3.00%
Three		2.00%
Four		1.00%
Five		none
Six		none
Seven		none
Eight		none
Nine		Conversion to Class A Shares

The following rules apply to the conversion of Class B shares to Class A shares:

•

Class B shares are converted on or about the 15th day of the month that they become eligible for conversion.

•

Any shares you received from reinvested distributions on these shares generally will convert to Class A shares at the same time.

•

No sales charge or other charges apply, and conversions are free from U.S. federal income tax.

Class C Shares—CDSC and Commissions

Reductions/Waivers of Sales Charges

Front-End Sales Charge Reductions

FUNDamentals ^TM

Your “Immediate Family” and Account Value Aggregation

Eligible Accounts

The types of accounts that are eligible for the account value aggregation purposes described above are:

•

individual accounts,

•

joint accounts,

•

certain IRA accounts,

•

certain health savings accounts,

•

certain trust accounts, and

•

Uniform Gifts to Minors Act (UGMA)/Uniform Transfers to Minors Act (UTMA) accounts.

Eligible accounts do not include Class R share accounts or accounts holding shares of money market funds that used the Columbia brand before May 1, 2010.

Front-End Sales Charge Waivers

CDSC Waivers

The Fund may change or cancel these terms at any time. Any change or cancellation applies only to future purchases.

For more information about the sales charge reductions and waivers described here, consult the SAI.

Distribution and Service Fees

The table below shows the maximum annual distribution and service fees (as an annual % of average daily net assets) and the combined amount of such fees applicable to each share class:

Distribution and Service (Rule 12b-1) Fees


	Distribution Fee		Service Fee		Combined Total
Class A	—	^(a)	—	^(a)	0.25	% ^(a)
Class B	0.75	%	0.25	%	1.00	%
Class C	0.75	%	0.25	%	1.00	%

^(a)	The Fund’s Class A shares pay a combined distribution and service fee pursuant to the Fund’s combined distribution and shareholder servicing plan for Class A shares.

Financial Intermediary Compensation

The Distributor and the Adviser make payments, from their own resources, to certain financial intermediaries, including other Ameriprise Financial affiliates, for marketing/sales support services relating to the Columbia Funds. Such payments are generally based upon one or more of the following factors: average net assets of the Columbia Funds sold by the Distributor attributable to that intermediary, gross sales of the Columbia Funds distributed by the Distributor attributable to that intermediary, reimbursement of ticket charges (fees that an intermediary firm charges its representatives for effecting transactions in Fund shares) or a negotiated lump sum payment. While the financial arrangements may vary for each intermediary, the support payments to any one intermediary are generally between 0.05% and 0.50% on an annual basis for payments based on average net assets of the Fund attributable to the intermediary, and between 0.05% and 0.25% on an annual basis for firms receiving a payment based on gross sales of the Columbia Funds attributable to the intermediary.

These payments for shareholder servicing support vary by financial intermediary but generally are not expected, with certain limited exceptions, to exceed 0.40% of the average aggregate value of the Fund’s shares in any financial intermediary’s program on an annual basis for those classes of shares that pay a service fee pursuant to a plan under Rule 12b-1 under the 1940 Act, and 0.45% of the average aggregate value of the Fund’s shares in any financial intermediary’s program on an annual basis for those classes of shares that do not pay a service fee pursuant to a plan under Rule 12b-1 under the 1940 Act.

Amounts paid by the Distributor and the Adviser and their affiliates are paid out of the Distributor’s and the Adviser’s own resources and do not increase the amount paid by you or the Fund. You can find further details about the payments made by the Distributor and the Adviser and their affiliates and the services provided by financial intermediaries as well as a list of the intermediaries to which the Distributor and the Adviser have agreed to make marketing support payments in the SAI. Your financial intermediary may charge you fees and commissions in addition to those described in this prospectus. You should consult with your financial intermediary and review carefully any disclosure your financial intermediary provides regarding its services and compensation. Depending on the financial arrangement in place at any particular time, a financial intermediary and its financial consultants may have a financial incentive for recommending the Fund or a particular share class over others. See Management of the Fund – Other Roles and Relationships of Ameriprise Financial and its Affiliates – Certain Conflicts of Interest for more information.

Buying, Selling and Exchanging Shares

Share Price Determination

FUNDamentals ^TM

NAV Calculation

Each of the Fund’s share classes calculates its NAV as follows:


		(Value of assets of the share class)
NAV	=	—(Liabilities of the share class)
		Number of outstanding shares of the class

Transaction Rules and Policies

Also remember that the Fund may refuse any order to buy or exchange shares. If this happens, we’ll return any money we’ve received, but no interest will be paid on that money.

Order Processing

FUNDamentals ^TM

Business Days

A business day is any day that the New York Stock Exchange (NYSE) is open. A business day ends at the close of regular trading on the NYSE, usually at 4:00 p.m. Eastern time. If the NYSE closes early, the business day ends as of the time the NYSE closes. On holidays and other days when the NYSE is closed, the Fund’s net asset value is not calculated and the Fund does not accept buy or sell orders. However, the value of the Fund’s assets may still be affected on such days to the extent that the Fund holds foreign securities that trade on days that foreign securities markets are open.

“Good Form”

An order is in “good form” if the Transfer Agent or your selling and/or servicing agent has all of the information and documentation it deems necessary to effect your order. For example, when you sell shares by letter of instruction, “good form” means that your letter has (i) complete instructions and the signatures of all account owners, (ii) a Medallion signature guarantee for amounts equal to or greater than $100,000 and (iii) any other required documents completed and attached. For the documents required for sales by corporations, agents, fiduciaries, surviving joint owners and other legal entities, call 800.345.6611.

Medallion Signature Guarantees

Written Transactions

Telephone Transactions

Telephone orders may not be as secure as written orders. Columbia Funds will take reasonable steps to confirm that telephone instructions are genuine. For example, we require proof of your identification before we will act on instructions received by telephone and may record telephone conversations. However, the Fund and its agents will not be responsible for any losses, costs or expenses resulting from an unauthorized telephone instruction when reasonable steps have been taken to confirm that telephone instructions are

genuine. Telephone orders may be difficult to complete during periods of significant economic or market change or business interruption.

Online Transactions

Once you have an account, contact Columbia Funds at 800.345.6611 for more information on account trading restrictions and the special sign-up procedures required for online transactions. The Transfer Agent has procedures in place to authenticate electronic orders you deliver through the internet. You will be required to accept the terms of an online agreement and to establish and utilize a password in order to access online account services.

You can sell up to an aggregate of $100,000 of shares through the internet in any 30-day period if you qualify for internet orders.

Customer Identification Program

Small Account Policy—Accounts Below $250

Small Account Policy—Minimum Balance Fee

Exceptions to the Above Small Account Policy (Accounts Below $250 and Minimum Balance Fee)

Small Account Policy—Broker/Dealer and Wrap Fee Accounts

Columbia Funds may automatically redeem shares at any time from broker/dealer networked accounts and wrap fee accounts that have account balances of $20 or less or that have less than one share.

Cash Flows

Information Sharing Agreements

As required by Rule 22c-2 under the 1940 Act, the Columbia Funds or certain of their service providers will enter into information sharing agreements with financial intermediaries, including participating life insurance companies and financial intermediaries that sponsor or offer retirement plans through which shares of the Columbia Funds are made available for purchase. Pursuant to Rule 22c-2, financial intermediaries are required, upon request, to: (i) provide shareholder account and transaction information and (ii) execute instructions from the Fund to restrict or prohibit further purchases of Fund shares by shareholders who have been identified by the Fund as having engaged in transactions that violate the Fund’s excessive trading policies and procedures. See Buying, Selling and Exchanging Shares – Excessive Trading Practices for more information.

Excessive Trading Practices

Limitations on the Ability to Detect and Prevent Excessive Trading Practices – The Fund takes various steps designed to detect and prevent excessive trading, including daily review of available shareholder transaction information. However, the Fund receives buy, sell and exchange orders through financial intermediaries, and cannot always know of or reasonably detect excessive trading that may be facilitated by financial intermediaries or by the use of the omnibus account arrangements they offer. Omnibus account arrangements are common forms of holding shares of mutual funds, particularly among certain financial intermediaries such as broker/dealers, retirement plans and variable insurance products. These arrangements often permit financial intermediaries to aggregate their clients’ transactions and accounts, and in these circumstances, the identity of the shareholders is often not known.

Some financial intermediaries apply their own restrictions or policies to underlying investor accounts, which may be more or less restrictive than those described here. This may impact the Fund’s ability to curtail excessive trading, even where it is identified. For these and other reasons, it is possible that excessive trading may occur despite the Fund’s efforts to detect and prevent it.

Risks of Excessive Trading – Excessive trading creates certain risks to the Fund’s long-term shareholders and may create the following adverse effects:

•

negative impact on the Fund’s performance;

•

potential dilution of the value of the Fund’s shares;

•

losses on the sale of investments resulting from the need to sell securities at less favorable prices;

•

increased taxable gains to the Fund’s remaining shareholders resulting from the need to sell securities to meet sell orders; and

•

increased brokerage and administrative costs.

Opening an Account and Placing Orders

Columbia Funds encourages you to consult with a financial advisor who can help you with your investment decisions and who can help you open an account. Once you have an account, you can buy, sell and exchange shares by contacting your financial advisor who will send your order to the Transfer Agent or your selling and/or servicing agent. As described in Buying, Selling and Exchanging Shares – Transaction Rules and Policies , once you have an account you can also communicate your orders directly to the Transfer Agent by mail, by telephone or online.

Buying Shares

Eligible Investors

Class B Shares Closing

Additional Class B shares will be issued only to existing investors in Class B shares and only through the following two types of transactions (Qualifying Transactions):

•

Dividends and/or capital gain distributions may continue to be reinvested in Class B shares of the Fund.

•

Shareholders invested in Class B shares of the Fund may exchange those shares for Class B shares of other Columbia Funds offering such shares.

Any initial purchase orders for the Fund’s Class B shares will be rejected (other than through a Qualifying Transaction that is an exchange transaction).

Minimum Initial Investments

Minimum Additional Investments

There is no minimum additional investment for Class A or Class C shares.

Systematic Investment Plan

Dividend Diversification

Wire Purchases

You may buy Class A or Class C shares of the Fund by wiring money from your bank account to your Fund account by calling the Transfer Agent at 800.422.3737.

Electronic Funds Transfer

Other Purchase Rules You Should Know

•

You generally buy Class A shares at the public offering price per share because purchases of Class A shares are generally subject to a front-end sales charge.

•

You buy Class B and Class C shares at net asset value per share because no front-end sales charge applies to purchases of these share classes.

•

Selling and/or servicing agents are responsible for sending your buy orders to the Transfer Agent and ensuring that we receive your money on time.

•

Shares bought are recorded on the books of the Fund. The Fund doesn’t issue certificates.

Selling Shares

When you sell your shares, the Fund is effectively buying them back from you. This is called a redemption.

Wire Redemptions

Electronic Funds Transfer

Systematic Withdrawal Plan

guaranteed.

In-Kind Distributions

Other Redemption Rules You Should Know

•

No interest will be paid on uncashed redemption checks.

•

Other restrictions may apply to retirement accounts. For information about these restrictions, contact your retirement plan administrator.

•

Also keep in mind Columbia Funds’ Small Account Policy, which is described above in Buying, Selling and Exchanging Shares – Transaction Rules and Policies .

Exchanging Shares

Systematic Exchanges

The rules described below for making exchanges apply to systematic exchanges.

Other Exchange Rules You Should Know

•

Exchanges are made at net asset value.

•

You can generally make exchanges between like share classes of any Columbia Fund. Some exceptions apply.

•

A sales charge may apply when you exchange shares of a Columbia Fund that were not assessed a sales charge at the time of your initial purchase.

•

The rules for buying shares of a Columbia Fund generally apply to exchanges into that Fund.

•

You may make exchanges only into a Columbia Fund that is legally offered and sold in your state of residence.

•

You generally may make an exchange only into a Columbia Fund that is accepting investments.

•

The Fund may change or cancel your right to make an exchange by giving the amount of notice required by regulatory authorities (generally 60 days for a material change or cancellation).

•

Unless your account is part of a tax-advantaged arrangement, an exchange for shares of another fund is a taxable event, and you may recognize a gain or loss for tax purposes.

Same-Fund Exchange Privilege for Class Z Shares

Distributions and Taxes

Distributions to Shareholders

A mutual fund can make money two ways:

•

It can earn income on its investments. Examples of fund income are interest paid on money market instruments and bonds, and dividends paid on common stocks.

•

FUNDamentals ^TM

Distributions

Declaration and Distribution Schedule


Declarations		daily
Distributions		monthly

The Fund may, however, pay distributions of net investment income more frequently.

If you buy shares of the Fund when it holds securities with unrealized capital gain, you may, in effect, receive part of your purchase price back if and when the Fund sells those

Taxes and Your Investment

•

To the extent distributions are taxable, such distributions generally are taxable to you when paid, whether they are paid in cash or automatically reinvested in additional shares of the Fund.

•

Distributions of the Fund’s net interest income from tax-exempt securities generally are not subject to federal income tax, but may be subject to state and local income and other taxes, as well as federal and state alternative minimum tax. Distributions of the Fund’s net interest income from tax-exempt securities of South Carolina and its subdivisions generally also are not subject to South Carolina individual income tax.

•

FUNDamentals ^TM

Taxes

Financial Highlights

Columbia South Carolina Intermediate Municipal Bond Fund—Class A Shares


	Year Ended March 31, 2010			Year Ended March 31, 2009			Year Ended March 31, 2008			Year Ended March 31, 2007			Year Ended March 31, 2006 ^(a)
Net Asset Value, Beginning of Period	$	[	]	$	10.01		$	10.27		$	10.25		$	10.46
Income from Investment Operations:
Net investment income ^(b)		[	]		0.37			0.39			0.39			0.43
Net realized and unrealized gain (loss) on investments and futures contracts		[	]		(0.17	)		(0.25	)		0.06			(0.17	)
Total from investment operations		[	]		0.20			0.14			0.45			0.26
Less Distributions to Shareholders:
From net investment income		[	]		(0.37	)		(0.38	)		(0.38	)		(0.40	)
From net realized gains		[	]		—			(0.02	)		(0.05	)		(0.07	)
Total distributions to shareholders		[	]		(0.37	)		(0.40	)		(0.43	)		(0.47	)
Net Asset Value, End of Period	$	[	]	$	9.84		$	10.01		$	10.27		$	10.25
Total return ^(c)(d)		[	]%		2.09	%		1.39	%		4.50	%		2.46	%
Ratios to Average Net Assets/Supplemental Data:
Net expenses before interest expense		[	]%		0.75	% ^(e)		0.75	% ^(e)		0.75	% ^(e)		0.75	% ^(e)
Interest expense		[	]		—			—			—	% ^(f)		—	% ^(f)
Net expenses		[	]%		0.75	% ^(e)		0.75	% ^(e)		0.75	% ^(e)		0.75	% ^(e)
Waiver/Reimbursement		[	]%		0.13	%		0.15	%		0.17	%		0.14	%
Net investment income		[	]%		3.76	% ^(e)		3.78	% ^(e)		3.77	% ^(e)		3.78	% ^(e)
Portfolio turnover rate		[	]%		21	%		13	%		15	%		11	%
Net assets, end of period (000’s)	$	[	]	$	23,865		$	16,007		$	17,443		$	18,855

^(a)	On August 22, 2005, the Fund’s Investor A shares were renamed Class A shares.

^(b)	Per share data was calculated using the average shares outstanding during the period.

^(c)	Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge.

^(d)	Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

^(e)	The benefits derived from expense reductions had an impact of less than 0.01%.

^(f)	Rounds to less than 0.01%.

Columbia South Carolina Intermediate Municipal Bond Fund—Class B Shares


	Year Ended March 31, 2010			Year Ended March 31, 2009			Year Ended March 31, 2008			Year Ended March 31, 2007			Year Ended March 31, 2006 ^(a)
Net Asset Value, Beginning of Period	$	[	]	$	10.01		$	10.27		$	10.25		$	10.46
Income from Investment Operations:
Net investment income ^(b)		[	]		0.30			0.31			0.31			0.34
Net realized and unrealized gain (loss) on investments and futures contracts		[	]		(0.16	)		(0.24	)		0.07			(0.16	)
Total from investment operations		[	]		0.14			0.07			0.38			0.18
Less Distributions to Shareholders:
From net investment income		[	]		(0.30	)		(0.31	)		(0.31	)		(0.32	)
From net realized gains		[	]		—			(0.02	)		(0.05	)		(0.07	)
Total distributions to shareholders		[	]		(0.30	)		(0.33	)		(0.36	)		(0.39	)
Net Asset Value, End of Period	$	[	]	$	9.85		$	10.01		$	10.27		$	10.25
Total return ^(c)(d)		[	]%		1.43	%		0.64	%		3.72	%		1.70	%
Ratios to Average Net Assets/Supplemental Data:
Net expenses before interest expense		[	]%		1.50	% ^(e)		1.50	% ^(e)		1.50	% ^(e)		1.50	% ^(e)
Interest expense		[	]		—			—			—	% ^(f)		—	% ^(f)
Net expenses		[	]%		1.50	% ^(e)		1.50	% ^(e)		1.50	% ^(e)		1.50	% ^(e)
Waiver/Reimbursement		[	]%		0.13	%		0.15	%		0.17	%		0.14	%
Net investment income		[	]%		3.03	% ^(e)		3.03	% ^(e)		3.02	% ^(e)		3.03	% ^(e)
Portfolio turnover rate		[	]%		21	%		13	%		15	%		11	%
Net assets, end of period (000’s)	$	[	]	$	1,978		$	2,268		$	2,866		$	4,135

^(a)	On August 22, 2005, the Fund’s Investor B shares were renamed Class B shares.

^(b)	Per share data was calculated using the average shares outstanding during the period.

^(c)	Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge.

^(d)	Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

^(e)	The benefits derived from expense reductions had an impact of less than 0.01%.

^(f)	Rounds to less than 0.01%.

Columbia South Carolina Intermediate Municipal Bond Fund—Class C Shares


	Year Ended March 31, 2010			Year Ended March 31, 2009			Year Ended March 31, 2008			Year Ended March 31, 2007			Year Ended March 31, 2006 ^(a)
Net Asset Value, Beginning of Period	$	[	]	$	10.01		$	10.28		$	10.26		$	10.47
Income from Investment Operations:
Net investment income ^(b)		[	]		0.30			0.31			0.31			0.34
Net realized and unrealized gain (loss) on investments and futures contracts		[	]		(0.16	)		(0.26	)		0.07			(0.16	)
Total from investment operations		[	]		0.14			0.05			0.38			0.18
Less Distributions to Shareholders:
From net investment income		[	]		(0.30	)		(0.30	)		(0.31	)		(0.32	)
From net realized gains		[	]		—			(0.02	)		(0.05	)		(0.07	)
Total distributions to shareholders		[	]		(0.30	)		(0.32	)		(0.36	)		(0.39	)
Net Asset Value, End of Period	$	[	]	$	9.85		$	10.01		$	10.28		$	10.26
Total return ^(c)(d)		[	]%		1.43	%		0.54	%		3.72	%		1.70	%
Ratios to Average Net Assets/Supplemental Data:
Net expenses before interest expense		[	]%		1.50	% ^(e)		1.50	% ^(e)		1.50	% ^(e)		1.50	% ^(e)
Interest expense		[	]		—			—			—	% ^(f)		—	% ^(f)
Net expenses		[	]%		1.50	% ^(e)		1.50	% ^(e)		1.50	% ^(e)		1.50	% ^(e)
Waiver/Reimbursement		[	]%		0.13	%		0.15	%		0.17	%		0.14	%
Net investment income		[	]%		3.02	% ^(e)		3.03	% ^(e)		3.02	% ^(e)		3.03	% ^(e)
Portfolio turnover rate		[	]%		21	%		13	%		15	%		11	%
Net assets, end of period (000’s)	$	[	]	$	6,146		$	5,697		$	6,324		$	7,060

^(a)	On August 22, 2005, the Fund’s Investor C shares were renamed Class C shares.

^(b)	Per share data was calculated using the average shares outstanding during the period.

^(c)	Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge.

^(d)	Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

^(e)	The benefits derived from expense reductions had an impact of less than 0.01%.

^(f)	Rounds to less than 0.01%.

Hypothetical Fees and Expenses

Columbia South Carolina Intermediate Municipal Bond Fund—Class A Shares

Maximum Initial Sales Charge 3.25%

Initial Hypothetical Investment Amount
$10,000.00

Assumed Rate of Return 5%

Year

Cumulative Return
Before Fees and
Expenses

Annual Expense
Ratio

Cumulative Return
After Fees and
Expenses

Hypothetical Year-
End Balance After
Fees and Expenses

Annual Fees and
Expenses ^(a)

5.00

[

]% ^(b)

[

]

[

]

10.25

[

]

[

]

15.76

[

]

[

]

21.55

[

]

[

]

27.63

[

]

[

]

34.01

[

]

[

]

40.71

[

]

[

]

47.75

[

]

[

]

55.13

[

]

[

]

62.89

[

]

[

]

Total Gain After Fees and Expenses

[

]

Total Annual Fees and Expenses Paid

[

]

^(a)	Annual Fees and Expenses are calculated based on the average between the beginning and ending balance for each year. All information is calculated on an annual compounding basis.

^(b)	Reflects deduction of the maximum initial sales charge.

Columbia South Carolina Intermediate Municipal Bond Fund—Class B Shares

Maximum Initial Sales Charge 0.00%

Initial Hypothetical Investment Amount
$10,000.00

Assumed Rate of Return 5%

Year

Cumulative Return
Before Fees and
Expenses

Annual Expense
Ratio

Cumulative Return
After Fees and
Expenses

Hypothetical Year-
End Balance After
Fees and Expenses

Annual Fees and
Expenses ^(a)

5.00

[

]

[

]

10.25

[

]

[

]

15.76

[

]

[

]

21.55

[

]

[

]

27.63

[

]

[

]

34.01

[

]

[

]

40.71

[

]

[

]

47.75

[

]

[

]

55.13

[

]

[

]

62.89

[

]

[

]

Total Gain After Fees and Expenses

[

Total Annual Fees and Expenses Paid

[

^(a)	Annual Fees and Expenses are calculated based on the average between the beginning and ending balance for each year. All information is calculated on an annual compounding basis.

Columbia South Carolina Intermediate Municipal Bond Fund—Class C Shares

Maximum Initial Sales Charge 0.00%

Initial Hypothetical Investment Amount
$10,000.00

Assumed Rate of Return 5%

Year

Cumulative Return
Before Fees and
Expenses

Annual Expense
Ratio

Cumulative Return
After Fees and
Expenses

Hypothetical Year-
End Balance After
Fees and Expenses

Annual Fees and
Expenses ^(a)

5.00

[

]

[

]

10.25

[

]

[

]

15.76

[

]

[

]

21.55

[

]

[

]

27.63

[

]

[

]

34.01

[

]

[

]

40.71

[

]

[

]

47.75

[

]

[

]

55.13

[

]

[

]

62.89

[

]

[

]

Total Gain After Fees and Expenses

[

]

Total Annual Fees and Expenses Paid

[

]

^(a)	Annual Fees and Expenses are calculated based on the average between the beginning and ending balance for each year. All information is calculated on an annual compounding basis.

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Columbia South Carolina Intermediate Municipal Bond Fund

Class A, Class B and Class C Shares

Prospectus, August 1, 2010

For More Information


By Mail:		Columbia Funds c/o Columbia Management Investment Services Corp. P.O. Box 8081 Boston, MA 02266-8081

By Telephone:		800.345.6611

Online:		www.columbiafunds.com

Annual and Semi-Annual Reports to Shareholders

Shareholder Communications with the Board

Statement of Additional Information

The SAI provides more detailed information about the Fund and its policies. The SAI is legally part of this prospectus (incorporated by reference). A copy has been filed with the SEC.

Information Provided by the SEC

FUNDamentals™ is a trademark of Ameriprise Financial.

The investment company registration number of Columbia Funds Series Trust, of which the Fund is a series, is 811-09645.

One Financial Center, Boston, MA 02111-2621

800.345.6611 www.columbiafunds.com

INT-36/[ ]-0810

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Prospectus

August 1, 2010

Columbia Funds

Columbia South Carolina Intermediate Municipal Bond Fund

Ticker symbol

Class Z Shares NSCMX

Table of Contents


Columbia South Carolina Intermediate Municipal Bond Fund		3

Investment Objective		3

Fees and Expenses of the Fund		3

Principal Investment Strategies		5

Principal Risks		5

Performance Information		8

Investment Adviser and Portfolio Manager(s)		9

Purchase and Sale of Fund Shares		9

Tax Information		9

Payments to Broker-Dealers and Other Financial Intermediaries		9

Additional Investment Strategies and Policies		10

Management of the Fund		12

Primary Service Providers		12

Other Roles and Relationships of Ameriprise Financial and its Affiliates—Certain Conflicts of Interest		14

Certain Legal Matters		15

About Class Z Shares		16

Description of the Share Class		16

Financial Intermediary Compensation		17

Buying, Selling and Exchanging Shares		18

Share Price Determination		18

Transaction Rules and Policies		19

Opening an Account and Placing Orders		23

Distributions and Taxes		27

Financial Highlights		30

Hypothetical Fees and Expenses		31

Icons Guide

Investment Objective

Fees and Expenses of the Fund

Principal Investment Strategies

Principal Risks

Performance Information

Other Roles and Relationships of Ameriprise Financial and its Affiliates - Certain Conflicts of Interest

Columbia South Carolina Intermediate Municipal Bond Fund

Investment Objective

The Fund seeks current income exempt from federal income tax and South Carolina individual income tax, consistent with moderate fluctuation of principal.

Fees and Expenses of the Fund

This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.

Shareholder Fees (fees paid directly from your investment)


		Class Z Shares
Maximum sales charge (load) imposed on purchases, as a % of offering price		N/A
Maximum deferred sales charge (load) imposed on redemptions, as a % of the lower of the original purchase price or net asset value		N/A

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)


	Class Z Shares
Management fees	0.55	%
Distribution and/or service (Rule 12b-1) fees	0.00	%
Other expenses	[ ]	%
Acquired fund fees and expenses	0.01	%
Total annual Fund operating expenses ^(a)	[ ]	%

^(a)	“Total annual Fund operating expenses” do not match “Net Expenses” in the Financial Highlights section of this prospectus, which does not include, among other things, fees and expenses incurred as a result of investment in shares of certain pooled investment vehicles.

Example

The following example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds.

The example illustrates the hypothetical expenses that you would incur over the time periods indicated, and assumes that:

•

you invest $10,000 in Class Z shares of the Fund for the periods indicated,

•

your investment has a 5% return each year, and

•

the Fund’s total annual operating expenses remain the same as shown in the table above.

Based on the assumptions listed above, your costs would be:

1 year

3 years

5 years

10 years

Class Z Shares

[ ]

Remember this is an example only. Your actual costs may be higher or lower.

Portfolio Turnover

Principal Investment Strategies

Under normal circumstances, the Fund invests at least 80% of its net assets in securities that pay interest exempt from federal income tax (but not necessarily the federal alternative minimum tax) and South Carolina individual income tax. These securities are issued by or on behalf of the State of South Carolina, its political subdivisions, agencies, instrumentalities and authorities, and other qualified issuers.

Principal Risks

•

Interest Rate Risk – Debt securities are subject to interest rate risk. In general, if prevailing interest rates rise, the values of debt securities will tend to fall, and if interest rates fall, the values of debt securities will tend to rise. Changes in the value of a debt security usually will not affect the amount of income the Fund receives from it but may affect the value of the Fund’s shares. Interest rate risk is generally greater for debt securities with longer maturities/durations.

•

Derivatives Risk – Derivatives are financial contracts whose values are, for example, based on (or “derived” from) traditional securities (such as a stock or bond), assets (such as a commodity like gold or a foreign currency), reference rates (such as LIBOR) or market indices (such as the S&P 500 ^® Index). Derivatives involve special risks and may result in losses or may limit the Fund’s potential gain from favorable market movements. Derivative strategies often involve leverage, which may exaggerate a loss, potentially causing the Fund to lose more money than it would have lost had it invested in the underlying security or other asset. The values of derivatives may move in unexpected ways, especially in unusual market conditions, and may result in increased volatility, among other consequences. The use of derivatives may also increase the amount of taxes payable by shareholders holding shares in a taxable account. Other risks arise from the Fund’s potential inability to terminate or to sell derivative positions. A liquid secondary market may not always exist for the Fund’s derivative positions at times when the Fund might wish to terminate or to sell such positions. Over-the-counter instruments (investments not traded on an exchange) may be illiquid, and transactions in derivatives traded in the over-the-counter market are subject to the risk that the other party will not meet its obligations. The use of derivatives also involves the risks of mispricing or improper valuation and that changes in the value of the derivative may not correlate perfectly with the underlying security, asset, reference rate or index. The Fund also may not be able to find a suitable derivative transaction counterparty, and thus may be unable to engage in derivative transactions when it is deemed favorable to do so, or at all. For more information on the risks of derivative investments and strategies, see the Statement of Additional Information.

•

Performance Information

Year by Year Total Return (%) as of December 31 Each Year*

The bar chart below shows you how the performance of the Fund’s Class Z shares has varied from year to year.

LOGO

*	Year-to-date return as of June 30, 2010: [ ]%

Best and Worst Quarterly Returns During this Period


Best:	[ ] quarter [ ]:	[ ]%
Worst:	[ ] quarter [ ]:	[ ]%

Average Annual Total Return as of December 31, 2009


	1 year		5 years		10 years
Class Z shares returns before taxes	[ ]	%	[ ]	%	[ ]	%
Class Z shares returns after taxes on distributions	[ ]	%	[ ]	%	[ ]	%
Class Z shares returns after taxes on distributions and sale of Fund shares	[ ]	%	[ ]	%	[ ]	%
Barclays Capital 3-15 Year Blend Municipal Bond Index (reflects no deductions for fees, expenses or taxes)	[ ]	%	[ ]	%	[ ]	%

Investment Adviser and Portfolio Manager(s)

Investment Adviser

Columbia Management Investment Advisers, LLC

Portfolio Manager

James D’Arcy, CFA

Manager. Service with the Fund since 2010.

Purchase and Sale of Fund Shares

Tax Information

Payments to Broker-Dealers and Other Financial Intermediaries

Additional Investment Strategies and Policies

Changing the Fund’s Investment Objective and Policies

Investment Guidelines

Holding Other Kinds of Investments

Investing in Money Market Funds

Lending Securities

Portfolio Holdings Disclosure

The Fund’s complete portfolio holdings as of a calendar quarter-end are disclosed approximately 30 calendar days after each such quarter-end.

In addition, more current information concerning the Fund’s portfolio holdings as of specified dates also may be disclosed on the Columbia Funds’ website.

Investing Defensively

Mailings to Households

Additional Information on Portfolio Turnover

A mutual fund that replaces, or turns over, more than 100% of its investments in a year is considered to have a high portfolio turnover rate. A high portfolio turnover rate can generate larger distributions of short-term capital gains to shareholders, which for individuals are generally taxable at higher rates than long-term capital gains for U.S. federal income tax purposes. A high portfolio turnover rate can also mean higher brokerage and other transaction costs, which could reduce a fund’s returns. In general, the greater the volume of buying and selling by a fund, the greater the impact that brokerage commissions will have on its returns. The Fund generally buys securities for capital appreciation, investment income or both. However, the Fund may sell securities regardless of how long they’ve been held. You’ll find the Fund’s portfolio turnover rate for its most recent fiscal year in the Fees and Expenses of the Fund – Portfolio Turnover section of this prospectus and portfolio turnover rates for prior fiscal years in the Financial Highlights section of this prospectus.

Management of the Fund

Primary Service Providers

The Adviser

Subadviser(s)

The SEC has issued an order that permits the Adviser, subject to the approval of the Board, to appoint an unaffiliated subadviser or to change the terms of a subadvisory agreement for the Fund without first obtaining shareholder approval. The order permits the Fund to add or to change unaffiliated subadvisers or to change the fees paid to subadvisers from time to time without the expense and delays associated with obtaining shareholder approval of the change. The Adviser and its affiliates may have other relationships, including significant financial relationships, with current or potential subadvisers or their affiliates, which may create certain conflicts of interest. When making recommendations to the Board to appoint or to change a subadviser, or to change the terms of a subadvisory agreement, the Adviser discloses to the Board the nature of any material relationships it has with a subadviser or its affiliates.

At present, the Adviser has not engaged any investment subadviser for the Fund.

Portfolio Manager

James D’Arcy, CFA

Manager. Service with the Fund since 2010.

The Administrator

Annual Administration Fee,

as a % of Average Daily Net Assets


Columbia South Carolina Intermediate Municipal Bond Fund		0.15	%

The Distributor

The Transfer Agent

The Transfer Agent is a registered transfer agent and a wholly-owned subsidiary of Ameriprise Financial. The Transfer Agent’s responsibilities include processing purchases, sales and exchanges, calculating and paying distributions, keeping shareholder records, preparing account statements and providing customer service. The Fund pays the Transfer Agent monthly fees on a per-account basis. Fees paid to the Transfer Agent include reimbursements for certain out-of-pocket expenses and sub-transfer agency fees, subject to certain limitations, paid by the Transfer Agent on the Fund’s behalf.

Expense Reimbursement Arrangements

Other Roles and Relationships of Ameriprise Financial and its Affiliates—Certain Conflicts of Interest

Conflicts of interest and limitations that could affect a Columbia Fund may arise from, for example, the following:

•

compensation and other benefits received by the Adviser and other Ameriprise Financial affiliates related to the management/administration of a Columbia Fund and the sale of its shares;

•

separate and potentially divergent management of a Columbia Fund and other funds and accounts advised/managed by the Adviser and other Ameriprise Financial affiliates;

•

regulatory and other investment restrictions on investment activities of the Adviser and other Ameriprise Financial affiliates and accounts advised/managed by them;

•

insurance and other relationships of Ameriprise Financial affiliates with companies and other entities in which a Columbia Fund invests; and

•

regulatory and other restrictions relating to the sharing of information between Ameriprise Financial and its affiliates, including the Adviser, and a Columbia Fund.

Certain Legal Matters

Ameriprise Financial and certain of its affiliates have historically been involved in a number of legal, arbitration and regulatory proceedings, including routine litigation, class actions and governmental actions, concerning matters arising in connection with the conduct of their business activities. Ameriprise Financial believes that the Fund is not currently the subject of, and that neither Ameriprise Financial nor any of its affiliates is the subject of, any pending legal, arbitration or regulatory proceedings that are likely to have a material adverse effect on the Fund or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Fund. Information regarding certain pending and settled legal proceedings may be found in the Fund’s shareholder reports and in the SAI. Additionally, Ameriprise Financial is required to make 10-Q, 10-K and, as necessary, 8-K filings with the SEC on legal and regulatory matters that relate to Ameriprise Financial and its affiliates. Copies of these filings may be obtained by accessing the SEC website at www.sec.gov.

About Class Z Shares

Description of the Share Class

Share Class Features


		Class Z Shares
Eligible Investors and Minimum Initial Investments		Class Z shares are available only to certain eligible investors, which are subject to different minimum initial investment requirements. These minimum initial investment amounts range from $0 to $2,500. See Buying, Selling and Exchanging Shares – Opening an Account and Placing Orders for details.

Investment Limits		none

Conversion Features		none

Front-End Sales Charges		none

Contingent Deferred Sales Charges (CDSCs)		none

Maximum Distribution and Service Fees		none

FUNDamentals ^TM

Selling and/or Servicing Agents

The terms “selling agent” and “servicing agent” refer to the financial intermediary that employs your financial advisor. Selling and/or servicing agents include, for example, brokerage firms, banks, investment advisors, third party administrators and other financial intermediaries, including Ameriprise Financial and its affiliates.

Financial Intermediary Compensation

The Distributor and the Adviser make payments, from their own resources, to certain financial intermediaries, including other Ameriprise Financial affiliates, for marketing/sales support services relating to the Columbia Funds. Such payments are generally based upon one or more of the following factors: average net assets of the Columbia Funds sold by the Distributor attributable to that intermediary, gross sales of the Columbia Funds distributed by the Distributor attributable to that intermediary, reimbursement of ticket charges (fees that an intermediary firm charges its representatives for effecting transactions in Fund shares) or a negotiated lump sum payment. While the financial arrangements may vary for each intermediary, the support payments to any one intermediary are generally between 0.05% and 0.50% on an annual basis for payments based on average net assets of the Fund attributable to the intermediary, and between 0.05% and 0.25% on an annual basis for firms receiving a payment based on gross sales of the Columbia Funds attributable to the intermediary.

These payments for shareholder servicing support vary by financial intermediary but generally are not expected, with certain limited exceptions, to exceed 0.40% of the average aggregate value of the Fund’s shares in any financial intermediary’s program on an annual basis for those classes of shares that pay a service fee pursuant to a plan under Rule 12b-1 under the 1940 Act, and 0.45% of the average aggregate value of the Fund’s shares in any financial intermediary’s program on an annual basis for those classes of shares that do not pay a service fee pursuant to a plan under Rule 12b-1 under the 1940 Act.

Amounts paid by the Distributor and the Adviser and their affiliates are paid out of the Distributor’s and the Adviser’s own resources and do not increase the amount paid by you or the Fund. You can find further details about the payments made by the Distributor and the Adviser and their affiliates and the services provided by financial intermediaries as well as a list of the intermediaries to which the Distributor and the Adviser have agreed to make marketing support payments in the SAI. Your financial intermediary may charge you fees and commissions in addition to those described in this prospectus. You should consult with your financial intermediary and review carefully any disclosure your financial intermediary provides regarding its services and compensation. Depending on the financial arrangement in place at any particular time, a financial intermediary and its financial consultants may have a financial incentive for recommending the Fund or a particular share class over others. See Management of the Fund – Other Roles and Relationships of Ameriprise Financial and its Affiliates – Certain Conflicts of Interest for more information.

Buying, Selling and Exchanging Shares

Share Price Determination

FUNDamentals ^TM

NAV Calculation

Each of the Fund’s share classes calculates its NAV as follows:


		(Value of assets of the share class)
NAV	=	—(Liabilities of the share class)
		Number of outstanding shares of the class

Transaction Rules and Policies

Also remember that the Fund may refuse any order to buy or exchange shares. If this happens, we’ll return any money we’ve received, but no interest will be paid on that money.

Order Processing

FUNDamentals ^TM

Business Days

A business day is any day that the New York Stock Exchange (NYSE) is open. A business day ends at the close of regular trading on the NYSE, usually at 4:00 p.m. Eastern time. If the NYSE closes early, the business day ends as of the time the NYSE closes. On holidays and other days when the NYSE is closed, the Fund’s net asset value is not calculated and the Fund does not accept buy or sell orders. However, the value of the Fund’s assets may still be affected on such days to the extent that the Fund holds foreign securities that trade on days that foreign securities markets are open.

“Good Form”

An order is in “good form” if the Transfer Agent or your selling and/or servicing agent has all of the information and documentation it deems necessary to effect your order. For example, when you sell shares by letter of instruction, “good form” means that your letter has (i) complete instructions and the signatures of all account owners, (ii) a Medallion signature guarantee for amounts equal to or greater than $100,000 and (iii) any other required documents completed and attached. For the documents required for sales by corporations, agents, fiduciaries, surviving joint owners and other legal entities, call 800.345.6611.

Medallion Signature Guarantees

Written Transactions

Telephone Transactions

Telephone orders may not be as secure as written orders. Columbia Funds will take reasonable steps to confirm that telephone instructions are genuine. For example, we require proof of your identification before we will act on instructions received by telephone and may record telephone conversations. However, the Fund and its agents will not be responsible for any losses, costs or expenses resulting from an unauthorized telephone instruction when reasonable steps have been taken to confirm that telephone instructions are

genuine. Telephone orders may be difficult to complete during periods of significant economic or market change or business interruption.

Online Transactions

Once you have an account, contact Columbia Funds at 800.345.6611 for more information on account trading restrictions and the special sign-up procedures required for online transactions. The Transfer Agent has procedures in place to authenticate electronic orders you deliver through the internet. You will be required to accept the terms of an online agreement and to establish and utilize a password in order to access online account services.

You can sell up to an aggregate of $100,000 of shares through the internet in any 30-day period if you qualify for internet orders.

Customer Identification Program

Small Account Policy—Accounts Below $250

Small Account Policy—Minimum Balance Fee

Exceptions to the Above Small Account Policy (Accounts Below $250 and Minimum Balance Fee)

Small Account Policy—Broker/Dealer and Wrap Fee Accounts

Columbia Funds may automatically redeem shares at any time from broker/dealer networked accounts and wrap fee accounts that have account balances of $20 or less or that have less than one share.

Cash Flows

Information Sharing Agreements

As required by Rule 22c-2 under the 1940 Act, the Columbia Funds or certain of their service providers will enter into information sharing agreements with financial intermediaries, including participating life insurance companies and financial intermediaries that sponsor or offer retirement plans through which shares of the Columbia Funds are made available for purchase. Pursuant to Rule 22c-2, financial intermediaries are required, upon request, to: (i) provide shareholder account and transaction information and (ii) execute instructions from the Fund to restrict or prohibit further purchases of Fund shares by shareholders who have been identified by the Fund as having engaged in transactions that violate the Fund’s excessive trading policies and procedures. See Buying, Selling and Exchanging Shares – Excessive Trading Practices for more information.

Excessive Trading Practices

Some financial intermediaries apply their own restrictions or policies to underlying investor accounts, which may be more or less restrictive than those described here. This may impact the Fund’s ability to curtail excessive trading, even where it is identified. For these and other reasons, it is possible that excessive trading may occur despite the Fund’s efforts to detect and prevent it.

Risks of Excessive Trading – Excessive trading creates certain risks to the Fund’s long-term shareholders and may create the following adverse effects:

•

negative impact on the Fund’s performance;

•

potential dilution of the value of the Fund’s shares;

•

losses on the sale of investments resulting from the need to sell securities at less favorable prices;

•

increased taxable gains to the Fund’s remaining shareholders resulting from the need to sell securities to meet sell orders; and

•

increased brokerage and administrative costs.

Opening an Account and Placing Orders

Columbia Funds encourages you to consult with a financial advisor who can help you with your investment decisions and who can help you open an account. Once you have an account, you can buy, sell and exchange shares by contacting your financial advisor who will send your order to the Transfer Agent or your selling and/or servicing agent. As described in Buying, Selling and Exchanging Shares – Transaction Rules and Policies , once you have an account you can also communicate your orders directly to the Transfer Agent by mail, by telephone or online.

Buying Shares

Minimum Initial Investments

There is no minimum initial investment in Class Z shares for the following categories of eligible investors:

•

The minimum initial investment in Class Z shares for the following categories of eligible investors is $1,000 :

•

The minimum initial investment in Class Z shares for the following categories of eligible investors is $2,500:

•

Any investor buying shares through a Columbia Management state tuition plan organized under Section 529 of the Internal Revenue Code.

•

Any trustee or director (or family member of a trustee or director) of a fund distributed by the Distributor.

•

Any employee (or family member of an employee) of Bank of America or one of its subsidiaries.

•

Any institutional investor who is a corporation, partnership, trust, foundation, endowment, institution, government

entity, or similar organization, which meets the respective qualifications for an accredited investor, as defined under the Securities Act of 1933.

•

For investors establishing a Systematic Investment Plan, the minimum initial investment is $50.

Minimum Additional Investments

There is no minimum additional investment for Class Z shares.

Systematic Investment Plan

Dividend Diversification

Wire Purchases

You may buy Class Z shares of the Fund by wiring money from your bank account to your Fund account by calling the Transfer Agent at 800.422.3737.

Electronic Funds Transfer

Other Purchase Rules You Should Know

•

Once the Transfer Agent or your selling and/or servicing agent receives your buy order in “good form,” your purchase will be made at the next calculated net asset value per share.

•

You generally buy Class Z shares at net asset value because no front-end sales charge applies to purchases of this share class.

•

Selling and/or servicing agents are responsible for sending your buy orders to the Transfer Agent and ensuring that we receive your money on time.

•

Shares bought are recorded on the books of the Fund. The Fund doesn’t issue certificates.

Selling Shares

When you sell your shares, the Fund is effectively buying them back from you. This is called a redemption.

Wire Redemptions

Electronic Funds Transfer

Systematic Withdrawal Plan

In-Kind Distributions

Other Redemption Rules You Should Know

•

Once the Transfer Agent or your selling and/or servicing agent receives your sell order in “good form,” your shares will be sold at the next calculated net asset value per share.

•

No interest will be paid on uncashed redemption checks.

•

Other restrictions may apply to retirement accounts. For information about these restrictions, contact your retirement plan administrator.

•

Also keep in mind Columbia Funds’ Small Account Policy, which is described above in Buying, Selling and Exchanging Shares – Transaction Rules and Policies .

Exchanging Shares

Systematic Exchanges

The rules described below for making exchanges apply to systematic exchanges.

Other Exchange Rules You Should Know

•

Exchanges are made at net asset value.

•

You can generally make exchanges between like share classes of any Columbia Fund. Some exceptions apply.

•

The rules for buying shares of a Columbia Fund generally apply to exchanges into that Fund.

•

You may make exchanges only into a Columbia Fund that is legally offered and sold in your state of residence.

•

You generally may make an exchange only into a Columbia Fund that is accepting investments.

•

The Fund may change or cancel your right to make an exchange by giving the amount of notice required by regulatory authorities (generally 60 days for a material change or cancellation).

•

Unless your account is part of a tax-advantaged arrangement, an exchange for shares of another fund is a taxable event, and you may recognize a gain or loss for tax purposes.

Distributions and Taxes

Distributions to Shareholders

A mutual fund can make money two ways:

•

It can earn income on its investments. Examples of fund income are interest paid on money market instruments and bonds, and dividends paid on common stocks.

•

FUNDamentals ^TM

Distributions

Declaration and Distribution Schedule


Declarations		daily
Distributions		monthly

The Fund may, however, pay distributions of net investment income more frequently.

If you buy shares of the Fund when it holds securities with unrealized capital gain, you may, in effect, receive part of your purchase price back if and when the Fund sells those

Taxes and Your Investment

•

To the extent distributions are taxable, such distributions generally are taxable to you when paid, whether they are paid in cash or automatically reinvested in additional shares of the Fund.

•

Distributions of the Fund’s net interest income from tax-exempt securities generally are not subject to federal income tax, but may be subject to state and local income and other taxes, as well as federal and state alternative minimum tax. Distributions of the Fund’s net interest income from tax-exempt securities of South Carolina and its subdivisions generally also are not subject to South Carolina individual income tax.

•

Revenue Service (IRS) has notified us that the TIN listed on your account is incorrect according to its records; or the IRS informs the Fund that you are otherwise subject to backup withholding.

FUNDamentals ^TM

Taxes

Financial Highlights

Columbia South Carolina Intermediate Municipal Bond Fund—Class Z Shares


	Year Ended March 31, 2010			Year Ended March 31, 2009			Year Ended March 31, 2008			Year Ended March 31, 2007			Year Ended March 31, 2006 ^(a)
Net Asset Value, Beginning of Period	$	[ ]		$	10.01		$	10.27		$	10.25		$	10.46
Income from Investment Operations:
Net investment income ^(b)		[ ]			0.40			0.41			0.41			0.46
Net realized and unrealized gain (loss) on investments and futures contracts		[ ]			(0.17	)		(0.24	)		0.07			(0.18	)
Total from investment operations		[ ]			0.23			0.17			0.48			0.28
Less Distributions to Shareholders:
From net investment income		[ ]			(0.40	)		(0.41	)		(0.41	)		(0.42	)
From net realized gains		[ ]			—			(0.02	)		(0.05	)		(0.07	)
Total distributions to shareholders		[ ]			(0.40	)		(0.43	)		(0.46	)		(0.49	)
Net Asset Value, End of Period	$	[ ]		$	9.84		$	10.01		$	10.27		$	10.25
Total return ^(c)(d)		[ ]	%		2.34	%		1.65	%		4.76	%		2.71	%
Ratios to Average Net Assets/Supplemental Data:
Net expenses before interest expense		[ ]	%		0.50	% ^(e)		0.50	% ^(e)		0.50	% ^(e)		0.50	% ^(e)
Interest expense		[ ]			—			—			—	% ^(f)		—	% ^(f)
Net expenses		[ ]	%		0.50	% ^(e)		0.50	% ^(e)		0.50	% ^(e)		0.50	% ^(e)
Waiver/Reimbursement		[ ]	%		0.13	%		0.15	%		0.17	%		0.14	%
Net investment income		[ ]	%		4.03	% ^(e)		4.03	% ^(e)		4.01	% ^(e)		4.03	% ^(e)
Portfolio turnover rate		[ ]	%		21	%		13	%		15	%		11	%
Net assets, end of period (000’s)	$	[ ]		$	172,604		$	170,987		$	157,399		$	160,021

^(a)	On August 22, 2005, the Fund’s Primary A shares were renamed Class Z shares.

^(b)	Per share data was calculated using the average shares outstanding during the period.

^(c)	Total return at net asset value assuming all distributions reinvested.

^(d)	Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

^(e)	The benefits derived from expense reductions had an impact of less than 0.01%.

^(f)	Rounds to less than 0.01%.

Hypothetical Fees and Expenses

The following supplemental hypothetical investment information provides additional information about the effect of the fees and expenses of the Fund, including investment advisory fees and other Fund costs, on the Fund’s returns over a 10-year period. The chart shows the estimated fees and expenses that would be charged on a hypothetical investment of $10,000 in Class Z shares of the Fund, assuming a 5% return each year, the cumulative return after fees and expenses and the hypothetical year-end balance after fees and expenses. The chart also assumes that all dividends and distributions are reinvested. The annual expense ratio used for the share class, which is the same as that stated in the Annual Fund Operating Expenses table, is presented in the chart and is net of any contractual fee waivers or expense reimbursements for the period of contractual commitment. Your actual costs may be higher or lower.

Columbia South Carolina Intermediate Municipal Bond Fund—Class Z Shares


Maximum Initial Sales Charge 0.00%			Initial Hypothetical Investment Amount $10,000.00				Assumed Rate of Return 5%
Year	Cumulative Return Before Fees and Expenses		Annual Expense Ratio		Cumulative Return After Fees and Expenses		Hypothetical Year- End Balance After Fees and Expenses		Annual Fees and Expenses ^(a)
1	5.00	%	[ ]	%	[ ]	%	$	[ ]	$	[ ]
2	10.25	%	[ ]	%	[ ]	%	$	[ ]	$	[ ]
3	15.76	%	[ ]	%	[ ]	%	$	[ ]	$	[ ]
4	21.55	%	[ ]	%	[ ]	%	$	[ ]	$	[ ]
5	27.63	%	[ ]	%	[ ]	%	$	[ ]	$	[ ]
6	34.01	%	[ ]	%	[ ]	%	$	[ ]	$	[ ]
7	40.71	%	[ ]	%	[ ]	%	$	[ ]	$	[ ]
8	47.75	%	[ ]	%	[ ]	%	$	[ ]	$	[ ]
9	55.13	%	[ ]	%	[ ]	%	$	[ ]	$	[ ]
10	62.89	%	[ ]	%	[ ]	%	$	[ ]	$	[ ]
Total Gain After Fees and Expenses							$	[ ]
Total Annual Fees and Expenses Paid									$	[ ]

^(a)	Annual Fees and Expenses are calculated based on the average between the beginning and ending balance for each year. All information is calculated on an annual compounding basis.

LOGO

Columbia South Carolina Intermediate Municipal Bond Fund

Class Z Shares

Prospectus, August 1, 2010

For More Information


By Mail:		Columbia Funds c/o Columbia Management Investment Services Corp. P.O. Box 8081 Boston, MA 02266-8081

By Telephone:		800.345.6611

Online:		www.columbiafunds.com

Annual and Semi-Annual Reports to Shareholders

Shareholder Communications with the Board

Statement of Additional Information

The SAI provides more detailed information about the Fund and its policies. The SAI is legally part of this prospectus (incorporated by reference). A copy has been filed with the SEC.

Information Provided by the SEC

FUNDamentals™ is a trademark of Ameriprise Financial.

The investment company registration number of Columbia Funds Series Trust, of which the Fund is a series, is 811-09645.

One Financial Center, Boston, MA 02111-2621

800.345.6611 www.columbiafunds.com

INT-36/[ ]-0810

LOGO

Prospectus

August 1, 2010

Columbia Funds

Columbia Maryland Intermediate

Municipal Bond Fund


Ticker symbols
Class A Shares NMDMX
Class B Shares NMITX
Class C Shares NMINX


Table of Contents

Columbia Maryland Intermediate Municipal Bond Fund		3

Investment Objective		3

Fees and Expenses of the Fund		3

Principal Investment Strategies		5

Principal Risks		5

Performance Information		8

Investment Adviser and Portfolio Manager(s)		9

Purchase and Sale of Fund Shares		9

Tax Information		9

Payments to Broker-Dealers and Other Financial Intermediaries		9

Additional Investment Strategies and Policies		10

Management of the Fund		12

Primary Service Providers		12

Other Roles and Relationships of Ameriprise Financial and its Affiliates—Certain Conflicts of Interest		14

Certain Legal Matters		15

Choosing a Share Class		16

Comparison of the Share Classes		16

Sales Charges and Commissions		17

Reductions/Waivers of Sales Charges		21

Distribution and Service Fees		23

Financial Intermediary Compensation		24

Buying, Selling and Exchanging Shares		25

Share Price Determination		25

Transaction Rules and Policies		26

Opening an Account and Placing Orders		30

Distributions and Taxes		34

Financial Highlights		37

Hypothetical Fees and Expenses		40

Icons Guide

LOGO Investment Objective

LOGO Fees and Expenses of the Fund

LOGO Principal Investment Strategies

LOGO Principal Risks

LOGO Performance Information

LOGO Other Roles and Relationships of Ameriprise Financial and its Affiliates - Certain Conflicts of Interest

Columbia Maryland Intermediate Municipal Bond Fund

Investment Objective

The Fund seeks current income exempt from federal income tax and Maryland individual income tax, consistent with moderate fluctuation of principal.

Fees and Expenses of the Fund

Shareholder Fees (fees paid directly from your investment)


	Class A Shares		Class B Shares		Class C Shares

Maximum sales charge (load) imposed on purchases, as a % of offering price	3.25	%	N/A		N/A
Maximum deferred sales charge (load) imposed on redemptions, as a % of the lower of the original purchase price or net asset value	1.00	% ^(a)	3.00	% ^(b)	1.00	% ^(c)

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)


	Class A Shares		Class B Shares		Class C Shares
Management fees	0.55	%	0.55	%	0.55	%
Distribution and/or service (Rule 12b-1) fees	0.25	%	1.00	%	1.00	%
Other expenses	[	]%	[	]%	[	]%
Acquired fund fees and expenses	0.01	%	0.01	%	0.01	%
Total annual Fund operating expenses (d)	[	]%	[	]%	[	]%

^(a)	This charge applies to investors who buy $1 million or more of Class A shares and redeem them within one year of purchase, with certain limited exceptions.

^(b)	This charge decreases over time.

^(c)	This charge applies to investors who buy Class C shares and redeem them within one year of purchase, with certain limited exceptions.

^(d)	“Total annual Fund operating expenses” do not match “Net Expenses” in the Financial Highlights section of this prospectus, which does not include, among other things, fees and expenses incurred as a result of investment in shares of certain pooled investment vehicles.

Example

The following example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds.

The example illustrates the hypothetical expenses that you would incur over the time periods indicated, and assumes that:

•

you invest $10,000 in Class A, Class B or Class C shares of the Fund for the periods indicated,

•

your investment has a 5% return each year, and

•

the Fund’s total annual operating expenses remain the same as shown in the table above.

Based on the assumptions listed above, your costs would be:

1 year

3 years

5 years

10 years

Class A Shares

[

]

[

]

[

]

[

]

Class B Shares

Assuming no redemption of shares

[

]

[

]

[

]

[

]

Assuming complete redemption of shares at the end of the period

[

]

[

]

[

]

[

]

Class C Shares

Assuming no redemption of shares

[

]

[

]

[

]

[

]

Assuming complete redemption of shares at the end of the period

[

]

[

]

[

]

[

]

Remember this is an example only. Your actual costs may be higher or lower.

Portfolio Turnover

Principal Investment Strategies

Under normal circumstances, the Fund invests at least 80% of its net assets in securities that pay interest exempt from federal income tax (but not necessarily the federal alternative minimum tax) and Maryland individual income tax. These securities are issued by or on behalf of the State of Maryland, its political subdivisions, agencies, instrumentalities and authorities, and other qualified issuers.

The Fund is non-diversified, which means that it can invest a greater percentage of its assets in a single issuer than can a diversified fund.

Principal Risks

•

Investment Strategy Risk – The Adviser uses the principal investment strategies and other investment strategies to seek to achieve the Fund’s investment objective. There is no assurance that the Fund will achieve its investment objective. Investment decisions made by the Adviser in using these strategies may not produce the returns expected by the Adviser, may cause the Fund’s shares to lose value or may cause the Fund to underperform other funds with similar investment objectives.

•

Market Risk – Market risk refers to the possibility that the market values of securities that the Fund holds will rise or fall, sometimes rapidly or unpredictably. Security values may fall because of factors affecting individual companies, industries or sectors, or the markets as a whole, reducing the value of an investment in the Fund. Accordingly, an investment in the Fund could lose money over short or even long periods. The market values of the securities the Fund holds also can be affected by changes or perceived changes in U.S. or foreign economies and financial markets, and the liquidity of these securities, among other factors. In general, equity securities tend to have greater price volatility than debt securities.

•

Changes in the value of a debt security usually will not affect the amount of income the Fund receives from it but may affect the value of the Fund’s shares. Interest rate risk is generally greater for debt securities with longer maturities/durations.

•

Credit Risk – Credit risk applies to most debt securities, but is generally not a factor for obligations backed by the “full faith and credit” of the U.S. Government. The Fund could lose money if the issuer of a debt security is unable or perceived to be unable to pay interest or repay principal when it becomes due. Various factors could affect the issuer’s actual or perceived willingness or ability to make timely interest or principal payments, including changes in the issuer’s financial condition or in general economic conditions. Debt securities backed by an issuer’s taxing authority may be subject to legal limits on the issuer’s power to increase taxes or otherwise to raise revenue, or may be dependent on legislative appropriation or government aid. Certain debt securities are backed only by revenues derived from a particular project or source, rather than by an issuer’s taxing authority, and thus may have a greater risk of default.

•

Municipal Securities Risk – Municipal securities are debt obligations generally issued to obtain funds for various public purposes, including general financing for state and local governments, or financing for a specific project or public facility. Municipal securities may be fully or partially backed by the taxing authority of the local government, by the credit of a private issuer, by the current or anticipated revenues from a specific project or specific assets or by domestic or foreign entities providing credit support, such as letters of credit, guarantees or insurance, and are generally classified into general obligation bonds and special revenue obligations. General obligation bonds are backed by an issuer’s taxing authority and may be vulnerable to limits on a government’s power or ability to raise revenue or increase taxes. They may also depend for payment on legislative appropriation and/or funding or other support from other governmental bodies. Revenue obligations are payable from revenues generated by a particular project or other revenue source, and are typically subject to greater risk of default than general obligation bonds because investors can look only to the revenue generated by the project or other revenue source backing the project, rather than to the general taxing authority of the state or local government issuer of the obligations. Because many municipal securities are issued to finance projects in sectors such as education, health care, transportation and utilities, conditions in those sectors can affect the overall municipal market. Municipal securities pay interest that, in the opinion of bond counsel, is free from U.S. federal income tax (and, in some cases, the federal alternative minimum tax). There is no assurance that the IRS will agree with this opinion. In the event the IRS determines that the issuer does not comply with relevant tax requirements, interest payments from a security could become federally taxable, possibly retroactively to the date the security was issued, and the value of the security would likely fall. As a shareholder of the Fund, you may be required to file an amended tax return and pay additional taxes as a result.

•

Derivatives Risk – Derivatives are financial contracts whose values are, for example, based on (or “derived” from) traditional securities (such as a stock or bond), assets (such as a commodity like gold or a foreign currency), reference rates (such as LIBOR) or market indices (such as the S&P 500 ^® Index). Derivatives involve special risks and may result in losses or may limit the Fund’s potential gain from favorable market movements. Derivative strategies often involve leverage, which may exaggerate a loss, potentially causing the Fund to lose more money than it would have lost had it invested in the underlying security or other asset. The values of derivatives may move in unexpected ways, especially in unusual market conditions, and may result in increased volatility, among other consequences. The use of derivatives may also increase the amount of taxes payable by shareholders holding shares in a taxable account. Other risks arise from the Fund’s potential inability to terminate or to sell derivative positions. A liquid secondary market may not always exist for the Fund’s derivative positions at times when the Fund might wish to terminate or to sell such positions. Over-the-counter instruments (investments not traded on an exchange) may be illiquid, and transactions in derivatives traded in the over-the-counter market are subject to the risk that the other party will not meet its obligations. The use of derivatives also involves the risks of mispricing or improper valuation and that changes in the value of the derivative may not correlate perfectly with the underlying security, asset, reference rate or index. The Fund also may not be able to find a suitable derivative transaction counterparty, and thus may be unable to engage in derivative transactions when it is deemed favorable to do so, or at all. For more information on the risks of derivative investments and strategies, see the Statement of Additional Information.

•

Low and Below Investment Grade Securities Risk – Debt securities with the lowest investment grade rating (e.g., BBB by Standard & Poor’s or Fitch) or that are below investment grade (which are commonly referred to as “junk bonds”) (e.g., BB or below by Standard & Poor’s, a division of the McGraw & Hill Companies, Inc. (Standard & Poor’s) or Fitch, Inc. (Fitch)) are more speculative than securities with higher ratings, and tend to be more sensitive to credit risk, particularly during a downturn in the economy, which is more likely to weaken the ability of the issuers to make principal and interest payments on these securities than is the case for higher-rated securities. These securities typically pay a premium – a higher interest rate or yield – because of the increased risk of loss, including default. These securities also are generally less liquid than higher-rated securities. The securities ratings provided by Moody’s Investors Service, Inc. (Moody’s), Standard & Poor’s and Fitch are based on analyses by these ratings agencies of the credit quality of the securities and may not take into account every risk related to whether interest or principal will be timely repaid.

•

Reinvestment Risk – Income from the Fund’s debt securities portfolio will decline if and when the Fund invests the proceeds from matured, traded or called securities in securities with market interest rates that are below the current earnings rate of the Fund’s portfolio.

•

Non-Diversified Mutual Fund Risk – The Fund is non-diversified, which generally means that it may invest a greater percentage of its total assets in the securities of fewer issuers than a “diversified” fund. This increases the risk that a change in the value of any one investment held by the Fund could affect the overall value of the Fund more than it would affect that of a diversified fund holding a greater number of investments. Accordingly, the Fund’s value will likely be more volatile than the value of more diversified funds. The Fund may not operate as a non-diversified fund at all times.

Performance Information

Year by Year Total Return (%) as of December 31 Each Year*

LOGO

*	Year-to-date return as of June 30, 2010: [ ]%

Best and Worst Quarterly Returns During this Period


Best:	[ ] quarter [ ]:	[ ]%
Worst:	[ ] quarter [ ]:	[ ]%

Average Annual Total Return as of December 31, 2009


	1 year		5 years		10 years
Class A shares returns before taxes	[	]%	[	]%	[	]%
Class A shares returns after taxes on distributions	[	]%	[	]%	[	]%
Class A shares returns after taxes on distributions and sale of Fund shares	[	]%	[	]%	[	]%
Class B shares returns before taxes	[	]%	[	]%	[	]%
Class C shares returns before taxes	[	]%	[	]%	[	]%
Barclays Capital 3-15 Year Blend Municipal Bond Index (reflects no deductions for fees, expenses or taxes)	[	]%	[	]%	[	]%

Investment Adviser and Portfolio Manager(s)

Investment Adviser

Columbia Management Investment Advisers, LLC

Portfolio Manager

James D’Arcy, CFA

Manager. Service with the Fund since 2010.

Purchase and Sale of Fund Shares

Tax Information

Payments to Broker-Dealers and Other Financial Intermediaries

Additional Investment Strategies and Policies

Changing the Fund’s Investment Objective and Policies

Investment Guidelines

Holding Other Kinds of Investments

Investing in Money Market Funds

Lending Securities

Portfolio Holdings Disclosure

The Fund’s complete portfolio holdings as of a quarter-end are disclosed approximately 30 calendar days after such quarter-end.

In addition, more current information concerning the Fund’s portfolio holdings as of specified dates also may be disclosed on the Columbia Funds’ website.

Investing Defensively

Mailings to Households

Additional Information on Portfolio Turnover

A mutual fund that replaces, or turns over, more than 100% of its investments in a year is considered to have a high portfolio turnover rate. A high portfolio turnover rate can generate larger distributions of short-term capital gains to shareholders, which for individuals are generally taxable at higher rates than long-term capital gains for U.S. federal income tax purposes. A high portfolio turnover rate can also mean higher brokerage and other transaction costs, which could reduce a fund’s returns. In general, the greater the volume of buying and selling by a fund, the greater the impact that brokerage commissions will have on its returns. The Fund generally buys securities for capital appreciation, investment income or both. However, the Fund may sell securities regardless of how long they’ve been held. You’ll find the Fund’s portfolio turnover rate for its most recent fiscal year in the Fees and Expenses of the Fund — Portfolio Turnover section of this prospectus and portfolio turnover rates for prior fiscal years in the Financial Highlights section of this prospectus.

Management of the Fund

Primary Service Providers

The Adviser

Subadviser(s)

The SEC has issued an order that permits the Adviser, subject to the approval of the Board, to appoint an unaffiliated subadviser or to change the terms of a subadvisory agreement for the Fund without first obtaining shareholder approval. The order permits the Fund to add or to change unaffiliated subadvisers or to change the fees paid to subadvisers from time to time without the expense and delays associated with obtaining shareholder approval of the change. The Adviser and its affiliates may have other relationships, including significant financial relationships, with current or potential subadvisers or their affiliates, which may create certain conflicts of interest. When making recommendations to the Board to appoint or to change a subadviser, or to change the terms of a subadvisory agreement, the Adviser discloses to the Board the nature of any material relationships it has with a subadviser or its affiliates.

At present, the Adviser has not engaged any investment subadviser for the Fund.

Portfolio Manager

James D’Arcy, CFA

Manager. Service with the Fund since 2010.

The Administrator

Annual Administration Fee,

as a % of Average Daily Net Assets


Columbia Maryland Intermediate Municipal Bond Fund		0.15	%

The Distributor

The Transfer Agent

The Transfer Agent is a registered transfer agent and a wholly-owned subsidiary of Ameriprise Financial. The Transfer Agent’s responsibilities include processing purchases, sales and exchanges, calculating and paying distributions, keeping shareholder records, preparing account statements and providing customer service. The Fund pays the Transfer Agent monthly fees on a per-account basis. Fees paid to the Transfer Agent include reimbursements for certain out-of-pocket expenses and sub-transfer agency fees, subject to certain limitations, paid by the Transfer Agent on the Fund’s behalf.

Expense Reimbursement Arrangements

Other Roles and Relationships of Ameriprise Financial and its Affiliates—Certain Conflicts of Interest

Conflicts of interest and limitations that could affect a Columbia Fund may arise from, for example, the following:

•

compensation and other benefits received by the Adviser and other Ameriprise Financial affiliates related to the management/administration of a Columbia Fund and the sale of its shares;

•

separate and potentially divergent management of a Columbia Fund and other funds and accounts advised/managed by the Adviser and other Ameriprise Financial affiliates;

•

regulatory and other investment restrictions on investment activities of the Adviser and other Ameriprise Financial affiliates and accounts advised/managed by them;

•

insurance and other relationships of Ameriprise Financial affiliates with companies and other entities in which a Columbia Fund invests; and

•

regulatory and other restrictions relating to the sharing of information between Ameriprise Financial and its affiliates, including the Adviser, and a Columbia Fund.

Additional information about Ameriprise Financial and the types of conflicts of interest and other matters referenced above is set forth in the “Investment Advisory and Other Services - Other Roles and Relationships of Ameriprise Financial and its Affiliates - Certain Conflicts of Interest” section of the SAI, which is identified by the icon. Investors in the Columbia Funds should carefully review these disclosures and consult with their financial advisor if they have any questions.

Certain Legal Matters

Ameriprise Financial and certain of its affiliates have historically been involved in a number of legal, arbitration and regulatory proceedings, including routine litigation, class actions and governmental actions, concerning matters arising in connection with the conduct of their business activities. Ameriprise Financial believes that the Fund is not currently the subject of, and that neither Ameriprise Financial nor any of its affiliates is the subject of, any pending legal, arbitration or regulatory proceedings that are likely to have a material adverse effect on the Fund or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Fund. Information regarding certain pending and settled legal proceedings may be found in the Fund’s shareholder reports and in the SAI. Additionally, Ameriprise Financial is required to make 10-Q, 10-K and, as necessary, 8-K filings with the SEC on legal and regulatory matters that relate to Ameriprise Financial and its affiliates. Copies of these filings may be obtained by accessing the SEC website at www.sec.gov.

Choosing a Share Class

Comparison of the Share Classes

Share Class Features


	Class A Shares	Class B Shares	Class C Shares
Eligible Investors and Minimum Initial Investments ^(a)	Minimum initial investments range from $0 to $2,500; the share class is available to the general public for investment.	The Fund no longer accepts investments from new or existing investors in Class B shares, except through a reinvestment of a dividend or capital gain distribution, or a permitted exchange as described in more detail under Buying, Selling and Exchanging Shares - Opening an Account and Placing Orders - Buying Shares - Class B Shares Closing .	Minimum initial investments range from $0 to $2,500; the share class is available to the general public for investment.

Investment Limits	none	up to $49,999 (based on aggregate account value) ^(b)	up to $999,999

Conversion Features	none	convert to Class A shares eight years after purchase	none

Front-End Sales Charges ^(c)	3.25% maximum, declining to 0.00% on investments of $1 million or more	none	none

Contingent Deferred Sales Charges (CDSCs) ^(c)	none, except a 1.00% CDSC applies to certain investments of between $1 million and $50 million sold within one year of purchase	3.00% maximum, gradually declining to 0.00% after four years	1.00% on investments sold within one year of purchase

Maximum Distribution and Service Fees	0.25% combined distribution and service fee	0.75% distribution fee 0.25% service fee	0.75% distribution fee 0.25% service fee

^(a)	See Buying, Selling and Exchanging Shares – Opening an Account and Placing Orders for more details on the eligible investors and investment minimums of these share classes.

^(b)

^(c)	See Choosing a Share Class – Reductions/Waivers of Sales Charges for information about certain exceptions to these sales charges.

FUNDamentals ^TM

Selling and/or Servicing Agents

The terms “selling agent” and “servicing agent” refer to the financial intermediary that employs your financial advisor. Selling and/or servicing agents include, for example, brokerage firms, banks, investment advisors, third party administrators and other financial intermediaries, including Ameriprise Financial and its affiliates.

Sales Charges and Commissions

Class A Shares—Front-End Sales Charge

FUNDamentals ^TM

Front-End Sales Charge Calculation

The following table presents the front-end sales charge as a percentage of both the offering price and the net amount invested.

•

The offering price per share is the net asset value per share plus any front-end sales charge that applies.

•

The net asset value (or NAV) per share is the price of a share calculated by the Fund every business day.

The dollar amount of the sales charge is the difference between the offering price of the shares you buy (based on the applicable sales charge in the table) and the net asset value of those shares.

The front-end sales charge you’ll pay on Class A shares:

•

depends on the amount you’re investing (generally, the larger the investment, the smaller the percentage sales charge), and

•

is based on the total amount of your purchase and the value of your account.

Class A Shares—Front-End Sales Charge - Breakpoint Schedule


Dollar amount of shares bought ^(a)	Sales charge as a % of the offering price ^(b)		Sales charge as a % of the net amount invested ^(b)		Amount retained by or paid to selling and/or servicing agents as a % of the offering price
$0 – $99,999	3.25	%	3.36	%	3.00	%
$100,000 – $249,999	2.50	%	2.56	%	2.25	%
$250,000 – $499,999	2.00	%	2.04	%	1.75	%
$500,000 – $999,999	1.50	%	1.52	%	1.25	%
$1,000,000 or more	0.00	%	0.00	%	1.00	% ^(c)(d)

^(a)	Purchase amounts and account values are aggregated among all eligible Columbia Fund accounts for the purposes of this table.

^(b)

^(c)

^(d)	For certain group retirement plans, selling and/or servicing agents are eligible to receive a 1.00% commission from the Distributor on all purchases up to $3 million, including those in amounts of less than $1 million that are coded as commission-eligible trades.

Class A Shares—CDSC and Commissions

In some cases, you’ll pay a CDSC if you sell Class A shares that you bought without an initial sales charge.

•

The CDSC on Class A shares:

•

is applied to the net asset value at the time of your purchase or sale, whichever is lower, and

•

will not be applied to any shares you receive through reinvested distributions.

The Distributor may also pay your selling and/or servicing agent a cumulative commission when you buy $1 million or more of Class A shares, according to the following schedule:

Class A Shares—Commission Schedule


Purchase Amount	Commission Level (as a % of net asset value per share)
$1 million – $2,999,999	1.00	%
$3 million – $49,999,999	0.50	%
$50 million or more	0.25	%

FUNDamentals ^TM

Contingent Deferred Sales Charge

Class B and Class C Shares—Sales Charges

You don’t pay a front-end sales charge when you buy Class B or Class C shares, but you may pay a CDSC when you sell Class B or Class C shares.

The CDSC on Class B and Class C shares:

•

is applied to the net asset value at the time of your purchase or sale, whichever is lower,

•

will not be applied to any shares you receive through reinvested distributions, and

•

generally declines each year until there is no sales charge for selling shares.

Class B Shares—CDSC and Commissions

Class B Shares—CDSC Schedule


Number of Years Class B Shares Held		Applicable CDSC
One		3.00%
Two		3.00%
Three		2.00%
Four		1.00%
Five		none
Six		none
Seven		none
Eight		none
Nine		Conversion to Class A Shares

The following rules apply to the conversion of Class B shares to Class A shares:

•

Class B shares are converted on or about the 15th day of the month that they become eligible for conversion.

•

Any shares you received from reinvested distributions on these shares generally will convert to Class A shares at the same time.

•

No sales charge or other charges apply, and conversions are free from U.S. federal income tax.

Class C Shares—CDSC and Commissions

Reductions/Waivers of Sales Charges

Front-End Sales Charge Reductions

FUNDamentals ^TM

Your “Immediate Family” and Account Value Aggregation

Eligible Accounts

The types of accounts that are eligible for the account value aggregation purposes described above are:

•

individual accounts,

•

joint accounts,

•

certain IRA accounts,

•

certain health savings accounts,

•

certain trust accounts, and

•

Uniform Gifts to Minors Act (UGMA)/Uniform Transfers to Minors Act (UTMA) accounts.

Eligible accounts do not include Class R share accounts or accounts holding shares of money market funds that used the Columbia brand before May 1, 2010.

Front-End Sales Charge Waivers

CDSC Waivers

The Fund may change or cancel these terms at any time. Any change or cancellation applies only to future purchases.

For more information about the sales charge reductions and waivers described here, consult the SAI.

Distribution and Service Fees

The table below shows the maximum annual distribution and service fees (as an annual % of average daily net assets) and the combined amount of such fees applicable to each share class:

Distribution and Service (Rule 12b-1) Fees


	Distribution Fee		Service Fee		Combined Total
Class A	—	^(a)	—	^(a)	0.25	% ^(a)
Class B	0.75	%	0.25	%	1.00	%
Class C	0.75	%	0.25	%	1.00	%

^(a)	The Fund’s Class A shares pay a combined distribution and service fee pursuant to the Fund’s combined distribution and shareholder servicing plan for Class A shares.

Financial Intermediary Compensation

The Distributor and the Adviser make payments, from their own resources, to certain financial intermediaries, including other Ameriprise Financial affiliates, for marketing/sales support services relating to the Columbia Funds. Such payments are generally based upon one or more of the following factors: average net assets of the Columbia Funds sold by the Distributor attributable to that intermediary, gross sales of the Columbia Funds distributed by the Distributor attributable to that intermediary, reimbursement of ticket charges (fees that an intermediary firm charges its representatives for effecting transactions in Fund shares) or a negotiated lump sum payment. While the financial arrangements may vary for each intermediary, the support payments to any one intermediary are generally between 0.05% and 0.50% on an annual basis for payments based on average net assets of the Fund attributable to the intermediary, and between 0.05% and 0.25% on an annual basis for firms receiving a payment based on gross sales of the Columbia Funds attributable to the intermediary.

These payments for shareholder servicing support vary by financial intermediary but generally are not expected, with certain limited exceptions, to exceed 0.40% of the average aggregate value of the Fund’s shares in any financial intermediary’s program on an annual basis for those classes of shares that pay a service fee pursuant to a plan under Rule 12b-1 under the 1940 Act, and 0.45% of the average aggregate value of the Fund’s shares in any financial intermediary’s program on an annual basis for those classes of shares that do not pay a service fee pursuant to a plan under Rule 12b-1 under the 1940 Act.

Amounts paid by the Distributor and the Adviser and their affiliates are paid out of the Distributor’s and the Adviser’s own resources and do not increase the amount paid by you or the Fund. You can find further details about the payments made by the Distributor and the Adviser and their affiliates and the services provided by financial intermediaries as well as a list of the intermediaries to which the Distributor and the Adviser have agreed to make marketing support payments in the SAI. Your financial intermediary may charge you fees and commissions in addition to those described in this prospectus. You should consult with your financial intermediary and review carefully any disclosure your financial intermediary provides regarding its services and compensation. Depending on the financial arrangement in place at any particular time, a financial intermediary and its financial consultants may have a financial incentive for recommending the Fund or a particular share class over others. See Management of the Fund – Other Roles and Relationships of Ameriprise Financial and its Affiliates – Certain Conflicts of Interest for more information.

Buying, Selling and Exchanging Shares

Share Price Determination

FUNDamentals ^TM

NAV Calculation

Each of the Fund’s share classes calculates its NAV as follows:


		(Value of assets of the share class)
NAV =		—(Liabilities of the share class)
		Number of outstanding shares of the class

Transaction Rules and Policies

Also remember that the Fund may refuse any order to buy or exchange shares. If this happens, we’ll return any money we’ve received, but no interest will be paid on that money.

Order Processing

FUNDamentals ^TM

Business Days

A business day is any day that the New York Stock Exchange (NYSE) is open. A business day ends at the close of regular trading on the NYSE, usually at 4:00 p.m. Eastern time. If the NYSE closes early, the business day ends as of the time the NYSE closes. On holidays and other days when the NYSE is closed, the Fund’s net asset value is not calculated and the Fund does not accept buy or sell orders. However, the value of the Fund’s assets may still be affected on such days to the extent that the Fund holds foreign securities that trade on days that foreign securities markets are open.

“Good Form”

An order is in “good form” if the Transfer Agent or your selling and/or servicing agent has all of the information and documentation it deems necessary to effect your order. For example, when you sell shares by letter of instruction, “good form” means that your letter has (i) complete instructions and the signatures of all account owners, (ii) a Medallion signature guarantee for amounts equal to or greater than $100,000 and (iii) any other required documents completed and attached. For the documents required for sales by corporations, agents, fiduciaries, surviving joint owners and other legal entities, call 800.345.6611.

Medallion Signature Guarantees

Written Transactions

Telephone Transactions

Telephone orders may not be as secure as written orders. Columbia Funds will take reasonable steps to confirm that telephone instructions are genuine. For example, we require

Online Transactions

Once you have an account, contact Columbia Funds at 800.345.6611 for more information on account trading restrictions and the special sign-up procedures required for online transactions. The Transfer Agent has procedures in place to authenticate electronic orders you deliver through the internet. You will be required to accept the terms of an online agreement and to establish and utilize a password in order to access online account services.

You can sell up to an aggregate of $100,000 of shares through the internet in any 30-day period if you qualify for internet orders.

Customer Identification Program

Small Account Policy—Accounts Below $250

Small Account Policy—Minimum Balance Fee

market value of Fund shares, sales loads applicable to a particular class of shares, or for other reasons.

Exceptions to the Above Small Account Policy (Accounts Below $250 and Minimum Balance Fee)

Small Account Policy—Broker/Dealer and Wrap Fee Accounts

Columbia Funds may automatically redeem shares at any time from broker/dealer networked accounts and wrap fee accounts that have account balances of $20 or less or that have less than one share.

Cash Flows

Information Sharing Agreements

As required by Rule 22c-2 under the 1940 Act, the Columbia Funds or certain of their service providers will enter into information sharing agreements with financial intermediaries, including participating life insurance companies and financial intermediaries that sponsor or offer retirement plans through which shares of the Columbia Funds are made available for purchase. Pursuant to Rule 22c-2, financial intermediaries are required, upon request, to: (i) provide shareholder account and transaction information and (ii) execute instructions from the Fund to restrict or prohibit further purchases of Fund shares by shareholders who have been identified by the Fund as having engaged in transactions that violate the Fund’s excessive trading policies and procedures. See Buying, Selling and Exchanging Shares – Excessive Trading Practices for more information.

Excessive Trading Practices

Some financial intermediaries apply their own restrictions or policies to underlying investor accounts, which may be more or less restrictive than those described here. This may impact the Fund’s ability to curtail excessive trading, even where it is identified. For these and other reasons, it is possible that excessive trading may occur despite the Fund’s efforts to detect and prevent it.

Risks of Excessive Trading – Excessive trading creates certain risks to the Fund’s long-term shareholders and may create the following adverse effects:

•

negative impact on the Fund’s performance;

•

potential dilution of the value of the Fund’s shares;

•

losses on the sale of investments resulting from the need to sell securities at less favorable prices;

•

increased taxable gains to the Fund’s remaining shareholders resulting from the need to sell securities to meet sell orders; and

•

increased brokerage and administrative costs.

Opening an Account and Placing Orders

Columbia Funds encourages you to consult with a financial advisor who can help you with your investment decisions and who can help you open an account. Once you have an account, you can buy, sell and exchange shares by contacting your financial advisor who will send your order to the Transfer Agent or your selling and/or servicing agent. As described in Buying, Selling and Exchanging Shares – Transaction Rules and Policies , once you have an account you can also communicate your orders directly to the Transfer Agent by mail, by telephone or online.

Buying Shares

Eligible Investors

Class B Shares Closing

Additional Class B shares will be issued only to existing investors in Class B shares and only through the following two types of transactions (Qualifying Transactions):

•

Dividends and/or capital gain distributions may continue to be reinvested in Class B shares of the Fund.

•

Shareholders invested in Class B shares of the Fund may exchange those shares for Class B shares of other Columbia Funds offering such shares.

Any initial purchase orders for the Fund’s Class B shares will be rejected (other than through a Qualifying Transaction that is an exchange transaction).

Unless contrary instructions are received in advance by the Fund, purchase orders (except those submitted by a financial intermediary through the National Securities Clearing Corporation (NSCC) as described in more detail below) for additional Class B shares of the Fund received from existing investors in Class B shares, including orders made through an active systematic investment plan, will be invested in Class A shares of the Fund, without regard to the normal minimum initial investment for Class A shares, but subject to the front-end sales charge that generally applies to Class A shares. See Choosing a Share Class—Class A Shares—Front-end Sales Charge for additional information.

Minimum Initial Investments

Minimum Additional Investments

There is no minimum additional investment for Class A or Class C shares.

Systematic Investment Plan

Dividend Diversification

Generally, you may automatically invest distributions made by another Columbia Fund into the same class of shares (and in some cases certain other classes of shares) of the Fund at no additional sales charge. A sales charge may apply when you invest distributions made by a Columbia Fund that were not assessed a sales charge at the time of your initial purchase. Call Columbia Funds at 800.345.6611 for details. See Buying, Selling and Exchanging Shares—Opening an Account and Placing Orders—Buying Shares—Class B Shares Closing for restrictions applicable to Class B shares.

Wire Purchases

You may buy Class A or Class C shares of the Fund by wiring money from your bank account to your Fund account by calling the Transfer Agent at 800.422.3737.

Electronic Funds Transfer

Other Purchase Rules You Should Know

•

You generally buy Class A shares at the public offering price per share because purchases of Class A shares are generally subject to a front-end sales charge.

•

You buy Class B and Class C shares at net asset value per share because no front-end sales charge applies to purchases of these share classes.

•

Selling and/or servicing agents are responsible for sending your buy orders to the Transfer Agent and ensuring that we receive your money on time.

•

Shares bought are recorded on the books of the Fund. The Fund doesn’t issue certificates.

Selling Shares

When you sell your shares, the Fund is effectively buying them back from you. This is called a redemption.

Wire Redemptions

Electronic Funds Transfer

Systematic Withdrawal Plan

guaranteed.

In-Kind Distributions

Other Redemption Rules You Should Know

•

No interest will be paid on uncashed redemption checks.

•

Other restrictions may apply to retirement accounts. For information about these restrictions, contact your retirement plan administrator.

•

Also keep in mind Columbia Funds’ Small Account Policy, which is described above in Buying, Selling and Exchanging Shares – Transaction Rules and Policies .

Exchanging Shares

Systematic Exchanges

The rules described below for making exchanges apply to systematic exchanges.

Other Exchange Rules You Should Know

•

Exchanges are made at net asset value.

•

You can generally make exchanges between like share classes of any Columbia Fund. Some exceptions apply.

•

A sales charge may apply when you exchange shares of a Columbia Fund that were not assessed a sales charge at the time of your initial purchase.

•

The rules for buying shares of a Columbia Fund generally apply to exchanges into that Fund.

•

You may make exchanges only into a Columbia Fund that is legally offered and sold in your state of residence.

•

You generally may make an exchange only into a Columbia Fund that is accepting investments.

•

The Fund may change or cancel your right to make an exchange by giving the amount of notice required by regulatory authorities (generally 60 days for a material change or cancellation).

•

Unless your account is part of a tax-advantaged arrangement, an exchange for shares of another fund is a taxable event, and you may recognize a gain or loss for tax purposes.

Same-Fund Exchange Privilege for Class Z Shares

Distributions and Taxes

Distributions to Shareholders

A mutual fund can make money two ways:

•

It can earn income on its investments. Examples of fund income are interest paid on money market instruments and bonds, and dividends paid on common stocks.

•

FUNDamentals ^TM

Distributions

Declaration and Distribution Schedule


Declarations		daily
Distributions		monthly

The Fund may, however, pay distributions of net investment income more frequently.

If you buy shares of the Fund when it holds securities with unrealized capital gain, you may, in effect, receive part of your purchase price back if and when the Fund sells those

Taxes and Your Investment

•

To the extent distributions are taxable, such distributions generally are taxable to you when paid, whether they are paid in cash or automatically reinvested in additional shares of the Fund.

•

Distributions of the Fund’s net interest income from tax-exempt securities generally are not subject to federal income tax, but may be subject to state and local income and other taxes, as well as federal and state alternative minimum tax. Distributions of the Fund’s net interest income from tax-exempt securities of Maryland and its subdivisions generally also are not subject to Maryland individual income tax.

•

Revenue Service (IRS) has notified us that the TIN listed on your account is incorrect according to its records; or the IRS informs the Fund that you are otherwise subject to backup withholding.

FUNDamentals ^TM

Taxes

Financial Highlights

Columbia Maryland Intermediate Municipal Bond Fund—Class A Shares


	Year Ended March 31, 2010			Year Ended March 31, 2009			Year Ended March 31, 2008			Year Ended March 31, 2007			Year Ended March 31, 2006 ^(a)
Net Asset Value, Beginning of Period	$	[	]	$	10.44		$	10.63		$	10.57		$	10.78
Income from Investment Operations:
Net investment income ^(b)		[	]		0.38			0.39			0.40			0.39
Net realized and unrealized gain (loss) on investments and futures contracts		[	]		(0.36	)		(0.19	)		0.06			(0.22	)
Total from investment operations		[	]		0.02			0.20			0.46			0.17
Less Distributions to Shareholders:
From net investment income		[	]		(0.38	)		(0.39	)		(0.40	)		(0.38	)
Net Asset Value, End of Period	$	[	]	$	10.08		$	10.44		$	10.63		$	10.57
Total return ^(c)(d)		[	]%		0.26	%		1.96	%		4.46	%		1.59	%
Ratios to Average Net Assets/Supplemental Data:
Net expenses before interest expense		[	]%		0.75	% ^(e)		0.75	% ^(e)		0.75	% ^(e)		0.75	% ^(e)
Interest expense		[	]		—			—			—	% ^(f)		—	% ^(f)
Net expenses		[	]%		0.75	% ^(e)		0.75	% ^(e)		0.75	% ^(e)		0.75	% ^(e)
Waiver/Reimbursement		[	]%		0.15	%		0.16	%		0.17	%		0.16	%
Net investment income		[	]%		3.76	% ^(e)		3.74	% ^(e)		3.81	% ^(e)		3.59	% ^(e)
Portfolio turnover rate		[	]%		11	%		8	%		20	%		24	%
Net assets, end of period (000’s)	$	[	]	$	23,530		$	24,405		$	24,730		$	28,877

^(a)	On August 22, 2005, the Fund’s Investor A shares were renamed Class A shares.

^(b)	Per share data was calculated using the average shares outstanding during the period.

^(c)	Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge.

^(d)	Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

^(e)	The benefits derived from expense reductions had an impact of less than 0.01%.

^(f)	Rounds to less than 0.01%.

Columbia Maryland Intermediate Municipal Bond Fund—Class B Shares


	Year Ended March 31, 2010			Year Ended March 31, 2009			Year Ended March 31, 2008			Year Ended March 31, 2007			Year Ended March 31, 2006 ^(a)
Net Asset Value, Beginning of Period	$	[	]	$	10.45		$	10.64		$	10.57		$	10.78
Income from Investment Operations:
Net investment income ^(b)		[	]		0.31			0.32			0.33			0.30
Net realized and unrealized gain (loss) on investments and futures contracts		[	]		(0.36	)		(0.19	)		0.06			(0.21	)
Total from investment operations		[	]		(0.05	)		0.13			0.39			0.09
Less Distributions to Shareholders:
From net investment income		[	]		(0.31	)		(0.32	)		(0.32	)		(0.30	)
Net Asset Value, End of Period	$	[	]	$	10.09		$	10.45		$	10.64		$	10.57
Total return ^(c)(d)		[	]%		(0.48	)%		1.20	%		3.78	%		0.83	%
Ratios to Average Net Assets/Supplemental Data:
Net expenses before interest expense		[	]%		1.50	% ^(e)		1.50	% ^(e)		1.50	% ^(e)		1.50	% ^(e)
Interest expense		[	]		—			—			—	% ^(f)		—	% ^(f)
Net expenses		[	]%		1.50	% ^(e)		1.50	% ^(e)		1.50	% ^(e)		1.50	% ^(e)
Waiver/Reimbursement		[	]%		0.15	%		0.16	%		0.17	%		0.16	%
Net investment income		[	]%		3.01	% ^(e)		3.00	% ^(e)		3.07	% ^(e)		2.84	% ^(e)
Portfolio turnover rate		[	]%		11	%		8	%		20	%		24	%
Net assets, end of period (000’s)	$	[	]	$	2,220		$	2,689		$	4,159		$	7,825

^(a)	On August 22, 2005, the Fund’s Investor B shares were renamed Class B shares.

^(b)	Per share data was calculated using the average shares outstanding during the period.

^(c)	Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge.

^(d)	Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

^(e)	The benefits derived from expense reductions had an impact of less than 0.01%.

^(f)	Rounds to less than 0.01%.

Columbia Maryland Intermediate Municipal Bond Fund—Class C Shares


	Year Ended March 31, 2010			Year Ended March 31, 2009			Year Ended March 31, 2008			Year Ended March 31, 2007			Year Ended March 31, 2006 ^(a)
Net Asset Value, Beginning of Period	$	[	]	$	10.44		$	10.63		$	10.57		$	10.78
Income from Investment Operations:
Net investment income ^(b)		[	]		0.31			0.32			0.32			0.30
Net realized and unrealized gain (loss) on investments and futures contracts		[	]		(0.36	)		(0.19	)		0.06			(0.21	)
Total from investment operations		[	]		(0.05	)		0.13			0.38			0.09
Less Distributions to Shareholders:
From net investment income		[	]		(0.31	)		(0.32	)		(0.32	)		(0.30	)
Net Asset Value, End of Period	$	[	]	$	10.08		$	10.44		$	10.63		$	10.57
Total return ^(c)(d)		[	]		(0.49	)%		1.20	%		3.68	%		0.83	%
Ratios to Average Net Assets/Supplemental Data:
Net expenses before interest expense		[	]%		1.50	% ^(e)		1.50	% ^(e)		1.50	% ^(e)		1.50	% ^(e)
Interest expense		[	]		—			—			—	% ^(f)		—	% ^(f)
Net expenses		[	]%		1.50	% ^(e)		1.50	% ^(e)		1.50	% ^(e)		1.50	% ^(e)
Waiver/Reimbursement		[	]%		0.15	%		0.16	%		0.17	%		0.16	%
Net investment income		[	]%		3.02	% ^(e)		2.99	% ^(e)		3.06	% ^(e)		2.84	% ^(e)
Portfolio turnover rate		[	]%		11	%		8	%		20	%		24	%
Net assets, end of period (000’s)	$	[	]	$	2,143		$	1,597		$	1,767		$	1,979

^(a)	On August 22, 2005, the Fund’s Investor C shares were renamed Class C shares.

^(b)	Per share data was calculated using the average shares outstanding during the period.

^(c)	Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge.

^(d)	Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

^(e)	The benefits derived from expense reductions had an impact of less than 0.01%.

^(f)	Rounds to less than 0.01%.

Hypothetical Fees and Expenses

Columbia Maryland Intermediate Municipal Bond Fund—Class A Shares

Maximum Initial Sales Charge 3.25%

Initial Hypothetical Investment
Amount $10,000.00

Assumed Rate of Return 5%

Year

Cumulative Return
Before Fees and
Expenses

Annual Expense
Ratio

Cumulative Return
After Fees and
Expenses

Hypothetical Year-End
Balance After Fees and
Expenses

Annual Fees and
Expenses ^(a)

5.00

[

]% ^(b)

[

]

[

]

10.25

[

]

[

]

15.76

[

]

[

]

21.55

[

]

[

]

27.63

[

]

[

]

34.01

[

]

[

]

40.71

[

]

[

]

47.75

[

]

[

]

55.13

[

]

[

]

62.89

[

]

[

]

Total Gain After Fees and Expenses

[

]

Total Annual Fees and Expenses Paid

[

]

^(a)	Annual Fees and Expenses are calculated based on the average between the beginning and ending balance for each year. All information is calculated on an annual compounding basis.

^(b)	Reflects deduction of the maximum initial sales charge.

Columbia Maryland Intermediate Municipal Bond Fund—Class B Shares

Maximum Initial Sales Charge 0.00%

Initial Hypothetical Investment
Amount $10,000.00

Assumed Rate of Return 5%

Year

Cumulative Return
Before Fees and
Expenses

Annual Expense
Ratio

Cumulative Return
After Fees and
Expenses

Hypothetical Year-End
Balance After Fees and
Expenses

Annual Fees and
Expenses ^(a)

5.00

[

]

[

]

10.25

[

]

[

]

15.76

[

]

[

]

21.55

[

]

[

]

27.63

[

]

[

]

34.01

[

]

[

]

40.71

[

]

[

]

47.75

[

]

[

]

55.13

[

]

[

]

62.89

[

]

[

]

Total Gain After Fees and Expenses

[

]

Total Annual Fees and Expenses Paid

[

]

^(a)	Annual Fees and Expenses are calculated based on the average between the beginning and ending balance for each year. All information is calculated on an annual compounding basis.

Columbia Maryland Intermediate Municipal Bond Fund—Class C Shares

Maximum Initial Sales Charge 0.00%

Initial Hypothetical Investment
Amount $10,000.00

Assumed Rate of Return 5%

Year

Cumulative Return
Before Fees and
Expenses

Annual Expense
Ratio

Cumulative Return
After Fees and
Expenses

Hypothetical Year-End
Balance After Fees and
Expenses

Annual Fees and
Expenses ^(a)

5.00

[

]

[

]

10.25

[

]

[

]

15.76

[

]

[

]

21.55

[

]

[

]

27.63

[

]

[

]

34.01

[

]

[

]

40.71

[

]

[

]

47.75

[

]

[

]

55.13

[

]

[

]

62.89

[

]

[

]

Total Gain After Fees and Expenses

[

]

Total Annual Fees and Expenses Paid

[

]

^(a)	Annual Fees and Expenses are calculated based on the average between the beginning and ending balance for each year. All information is calculated on an annual compounding basis.

LOGO

Columbia Maryland Intermediate Municipal Bond Fund

Class A, Class B and Class C Shares

Prospectus, August 1, 2010

For More Information


By Mail:		Columbia Funds c/o Columbia Management Investment Services Corp. P.O. Box 8081 Boston, MA 02266-8081

By Telephone:		800.345.6611

Online:		www.columbiafunds.com

Annual and Semi-Annual Reports to Shareholders

Shareholder Communications with the Board

Statement of Additional Information

The SAI provides more detailed information about the Fund and its policies. The SAI is legally part of this prospectus (incorporated by reference). A copy has been filed with the SEC.

Information Provided by the SEC

FUNDamentals™ is a trademark of Ameriprise Financial.

The investment company registration number of Columbia Funds Series Trust, of which the Fund is a series, is 811-09645.

One Financial Center, Boston, MA 02111-2621

800.345.6611 www.columbiafunds.com

INT-36/[ ]-0810

LOGO

Prospectus

August 1, 2010

Columbia Funds

Columbia Maryland Intermediate Municipal Bond Fund

Ticker symbol

Class Z Shares NMDBX

Table of Contents


Columbia Maryland Intermediate Municipal Bond Fund		3

Investment Objective		3

Fees and Expenses of the Fund		3

Principal Investment Strategies		5

Principal Risks		5

Performance Information		8

Investment Adviser and Portfolio Manager(s)		9

Purchase and Sale of Fund Shares		9

Tax Information		9

Payments to Broker-Dealers and Other Financial Intermediaries		9

Additional Investment Strategies and Policies		10

Management of the Fund		12

Primary Service Providers		12

Other Roles and Relationships of Ameriprise Financial and its Affiliates—Certain Conflicts of Interest		14

Certain Legal Matters		15

About Class Z Shares		16

Description of the Share Class		16

Financial Intermediary Compensation		17

Buying, Selling and Exchanging Shares		18

Share Price Determination		18

Transaction Rules and Policies		19

Opening an Account and Placing Orders		23

Distributions and Taxes		27

Financial Highlights		30

Hypothetical Fees and Expenses		31

Icons Guide

LOGO Investment Objective

LOGO Fees and Expenses of the Fund

LOGO Principal Investment Strategies

LOGO Principal Risks

LOGO Performance Information

LOGO Other Roles and Relationships of Ameriprise Financial and its Affiliates - Certain Conflicts of Interest

Columbia Maryland Intermediate Municipal Bond Fund

Investment Objective

The Fund seeks current income exempt from federal income tax and Maryland individual income tax, consistent with moderate fluctuation of principal.

Fees and Expenses of the Fund

This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.

Shareholder Fees (fees paid directly from your investment)


		Class Z Shares
Maximum sales charge (load) imposed on purchases, as a % of offering price		N/A
Maximum deferred sales charge (load) imposed on redemptions, as a % of the lower of the original purchase price or net asset value		N/A

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)


	Class Z Shares
Management fees	0.55	%
Distribution and/or service (Rule 12b-1) fees	0.00	%
Other expenses	[ ]	%
Acquired fund fees and expenses	0.01	%
Total annual Fund operating expenses ^(a)	[ ]	%

^(a)	“Total annual Fund operating expenses” do not match “Net Expenses” in the Financial Highlights section of this prospectus, which does not include, among other things, fees and expenses incurred as a result of investment in shares of certain pooled investment vehicles.

Example

•

you invest $10,000 in Class Z shares of the Fund for the periods indicated,

•

your investment has a 5% return each year, and

•

the Fund’s total annual operating expenses remain the same as shown in the table above.

Based on the assumptions listed above, your costs would be:

1 year

3 years

5 years

10 years

Class Z Shares

[ ]

Remember this is an example only. Your actual costs may be higher or lower.

Portfolio Turnover

Principal Investment Strategies

Under normal circumstances, the Fund invests at least 80% of its net assets in securities that pay interest exempt from federal income tax (but not necessarily the federal alternative minimum tax) and Maryland individual income tax. These securities are issued by or on behalf of the State of Maryland, its political subdivisions, agencies, instrumentalities and authorities, and other qualified issuers.

The Fund is non-diversified, which means that it can invest a greater percentage of its assets in a single issuer than can a diversified fund.

Principal Risks

•

Derivatives Risk – Derivatives are financial contracts whose values are, for example, based on (or “derived” from) traditional securities (such as a stock or bond), assets (such as a commodity like gold or a foreign currency), reference rates (such as LIBOR) or market indices (such as the S&P 500 ^® Index). Derivatives involve special risks and may result in losses or may limit the Fund’s potential gain from favorable market movements. Derivative strategies often involve leverage, which may exaggerate a loss, potentially causing the Fund to lose more money than it would have lost had it invested in the underlying security or other asset. The values of derivatives may move in unexpected ways, especially in unusual market conditions, and may result in increased volatility, among other consequences. The use of derivatives may also increase the amount of taxes payable by shareholders holding shares in a taxable account. Other risks arise from the Fund’s potential inability to terminate or to sell derivative positions. A liquid secondary market may not always exist for the Fund’s derivative positions at times when the Fund might wish to terminate or to sell such positions. Over-the-counter instruments (investments not traded on an exchange) may be illiquid, and transactions in derivatives traded in the over-the-counter market are subject to the risk that the other party will not meet its obligations. The use of derivatives also involves the risks of mispricing or improper valuation and that changes in the value of the derivative may not correlate perfectly with the underlying security, asset, reference rate or index. The Fund also may not be able to find a suitable derivative transaction counterparty, and thus may be unable to engage in derivative transactions when it is deemed favorable to do so, or at all. For more information on the risks of derivative investments and strategies, see the Statement of Additional Information.

•

Non-Diversified Mutual Fund Risk – The Fund is non-diversified, which generally means that it may invest a greater percentage of its total assets in the securities of fewer issuers than a “diversified” fund. This increases the risk that a change in the value of any one investment held by the Fund could affect the overall value of the Fund more than it would affect that of a diversified fund holding a greater number of investments. Accordingly, the Fund’s value will likely be more volatile than the value of more diversified funds. The Fund may not operate as a non-diversified fund at all times.

Performance Information

Year by Year Total Return (%) as of December 31 Each Year ^*

The bar chart below shows you how the performance of the Fund’s Class Z shares has varied from year to year.

LOGO

Best and Worst Quarterly Returns During this Period


Best:	[ ] quarter [ ]:	[ ]%
Worst:	[ ] quarter [ ]:	[ ]%

^*	Year-to-date return as of June 30, 2010: [ ]%

Average Annual Total Return as of December 31, 2009


	1 year		5 years		10 years
Class Z shares returns before taxes	[ ]	%	[ ]	%	[ ]	%
Class Z shares returns after taxes on distributions	[ ]	%	[ ]	%	[ ]	%
Class Z shares returns after taxes on distributions and sale of Fund shares	[ ]	%	[ ]	%	[ ]	%
Barclays Capital 3-15 Year Blend Municipal Bond Index (reflects no deductions for fees, expenses or taxes)	[ ]	%	[ ]	%	[ ]	%

Investment Adviser and Portfolio Manager(s)

Investment Adviser

Columbia Management Investment Advisers, LLC

Portfolio Manager

James D’Arcy, CFA

Manager. Service with the Fund since 2010.

Purchase and Sale of Fund Shares

Tax Information

Payments to Broker-Dealers and Other Financial Intermediaries

Additional Investment Strategies and Policies

Changing the Fund’s Investment Objective and Policies

Investment Guidelines

Holding Other Kinds of Investments

Investing in Money Market Funds

Lending Securities

Portfolio Holdings Disclosure

The Fund’s complete portfolio holdings as of a quarter-end are disclosed approximately 30 calendar days after such quarter-end.

In addition, more current information concerning the Fund’s portfolio holdings as of specified dates also may be disclosed on the Columbia Funds’ website.

Investing Defensively

The Fund may from time to time take temporary defensive investment positions that are inconsistent with the Fund’s

Mailings to Households

Additional Information on Portfolio Turnover

A mutual fund that replaces, or turns over, more than 100% of its investments in a year is considered to have a high portfolio turnover rate. A high portfolio turnover rate can generate larger distributions of short-term capital gains to shareholders, which for individuals are generally taxable at higher rates than long-term capital gains for U.S. federal income tax purposes. A high portfolio turnover rate can also mean higher brokerage and other transaction costs, which could reduce a fund’s returns. In general, the greater the volume of buying and selling by a fund, the greater the impact that brokerage commissions will have on its returns. The Fund generally buys securities for capital appreciation, investment income or both. However, the Fund may sell securities regardless of how long they’ve been held. You’ll find the Fund’s portfolio turnover rate for its most recent fiscal year in the Fees and Expenses of the Fund — Portfolio Turnover section of this prospectus and portfolio turnover rates for prior fiscal years in the Financial Highlights section of this prospectus.

Management of the Fund

Primary Service Providers

The Adviser

Subadviser(s)

The SEC has issued an order that permits the Adviser, subject to the approval of the Board, to appoint an unaffiliated subadviser or to change the terms of a subadvisory agreement for the Fund without first obtaining shareholder approval. The order permits the Fund to add or to change unaffiliated subadvisers or to change the fees paid to subadvisers from time to time without the expense and delays associated with obtaining shareholder approval of the change. The Adviser and its affiliates may have other relationships, including significant financial relationships, with current or potential subadvisers or their affiliates, which may create certain conflicts of interest. When making recommendations to the Board to appoint or to change a subadviser, or to change the terms of a subadvisory agreement, the Adviser discloses to the Board the nature of any material relationships it has with a subadviser or its affiliates.

At present, the Adviser has not engaged any investment subadviser for the Fund.

Portfolio Manager

James D’Arcy, CFA

Manager. Service with the Fund since 2010.

The Administrator

Annual Administration Fee,

as a % of Average Daily Net Assets


Columbia Maryland Intermediate Municipal Bond Fund		0.15	%

The Distributor

The Transfer Agent

The Transfer Agent is a registered transfer agent and a wholly-owned subsidiary of Ameriprise Financial. The Transfer Agent’s responsibilities include processing purchases, sales and exchanges, calculating and paying distributions, keeping shareholder records, preparing account statements and providing customer service. The Fund pays the Transfer Agent monthly fees on a per-account basis. Fees paid to the Transfer Agent include reimbursements for certain out-of-pocket expenses and sub-transfer agency fees, subject to certain limitations, paid by the Transfer Agent on the Fund’s behalf.

Expense Reimbursement Arrangements

Other Roles and Relationships of Ameriprise Financial and its Affiliates—Certain Conflicts of Interest

Conflicts of interest and limitations that could affect a Columbia Fund may arise from, for example, the following:

•

compensation and other benefits received by the Adviser and other Ameriprise Financial affiliates related to the management/administration of a Columbia Fund and the sale of its shares;

•

separate and potentially divergent management of a Columbia Fund and other funds and accounts advised/managed by the Adviser and other Ameriprise Financial affiliates;

•

regulatory and other investment restrictions on investment activities of the Adviser and other Ameriprise Financial affiliates and accounts advised/managed by them;

•

insurance and other relationships of Ameriprise Financial affiliates with companies and other entities in which a Columbia Fund invests; and

•

regulatory and other restrictions relating to the sharing of information between Ameriprise Financial and its affiliates, including the Adviser, and a Columbia Fund.

Additional information about Ameriprise Financial and the types of conflicts of interest and other matters referenced above is set forth in the “Investment Advisory and Other Services—Other Roles and Relationships of Ameriprise Financial and its Affiliates—Certain Conflicts of Interest” section of the SAI, which is identified by the icon. Investors in the Columbia Funds should carefully review these disclosures and consult with their financial advisor if they have any questions.

Certain Legal Matters

Ameriprise Financial and certain of its affiliates have historically been involved in a number of legal, arbitration and regulatory proceedings, including routine litigation, class actions and governmental actions, concerning matters arising in connection with the conduct of their business activities. Ameriprise Financial believes that the Fund is not currently the subject of, and that neither Ameriprise Financial nor any of its affiliates is the subject of, any pending legal, arbitration or regulatory proceedings that are likely to have a material adverse effect on the Fund or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Fund. Information regarding certain pending and settled legal proceedings may be found in the Fund’s shareholder reports and in the SAI. Additionally, Ameriprise Financial is required to make 10-Q, 10-K and, as necessary, 8-K filings with the SEC on legal and regulatory matters that relate to Ameriprise Financial and its affiliates. Copies of these filings may be obtained by accessing the SEC website at www.sec.gov.

About Class Z Shares

Description of the Share Class

Share Class Features


		Class Z Shares
Eligible Investors and Minimum Initial Investments		Class Z shares are available only to certain eligible investors, which are subject to different minimum initial investment requirements. These minimum initial investment amounts range from $0 to $2,500. See Buying, Selling and Exchanging Shares – Opening an Account and Placing Orders for details.

Investment Limits		none

Conversion Features		none

Front-End Sales Charges		none

Contingent Deferred Sales Charges (CDSCs)		none

Maximum Distribution and Service Fees		none

FUNDamentals ^TM

Selling and/or Servicing Agents

The terms “selling agent” and “servicing agent” refer to the financial intermediary that employs your financial advisor. Selling and/or servicing agents include, for example, brokerage firms, banks, investment advisors, third party administrators and other financial intermediaries, including Ameriprise Financial and its affiliates.

Financial Intermediary Compensation

The Distributor and the Adviser make payments, from their own resources, to certain financial intermediaries, including other Ameriprise Financial affiliates, for marketing/sales support services relating to the Columbia Funds. Such payments are generally based upon one or more of the following factors: average net assets of the Columbia Funds sold by the Distributor attributable to that intermediary, gross sales of the Columbia Funds distributed by the Distributor attributable to that intermediary, reimbursement of ticket charges (fees that an intermediary firm charges its representatives for effecting transactions in Fund shares) or a negotiated lump sum payment. While the financial arrangements may vary for each intermediary, the support payments to any one intermediary are generally between 0.05% and 0.50% on an annual basis for payments based on average net assets of the Fund attributable to the intermediary, and between 0.05% and 0.25% on an annual basis for firms receiving a payment based on gross sales of the Columbia Funds attributable to the intermediary.

These payments for shareholder servicing support vary by financial intermediary but generally are not expected, with certain limited exceptions, to exceed 0.40% of the average aggregate value of the Fund’s shares in any financial intermediary’s program on an annual basis for those classes of shares that pay a service fee pursuant to a plan under Rule 12b-1 under the 1940 Act, and 0.45% of the average aggregate value of the Fund’s shares in any financial intermediary’s program on an annual basis for those classes of shares that do not pay a service fee pursuant to a plan under Rule 12b-1 under the 1940 Act.

Amounts paid by the Distributor and the Adviser and their affiliates are paid out of the Distributor’s and the Adviser’s own resources and do not increase the amount paid by you or the Fund. You can find further details about the payments made by the Distributor and the Adviser and their affiliates and the services provided by financial intermediaries as well as a list of the intermediaries to which the Distributor and the Adviser have agreed to make marketing support payments in the SAI. Your financial intermediary may charge you fees and commissions in addition to those described in this prospectus. You should consult with your financial intermediary and review carefully any disclosure your financial intermediary provides regarding its services and compensation. Depending on the financial arrangement in place at any particular time, a financial intermediary and its financial consultants may have a financial incentive for recommending the Fund or a particular share class over others. See Management of the Fund – Other Roles and Relationships of Ameriprise Financial and its Affiliates – Certain Conflicts of Interest for more information.

Buying, Selling and Exchanging Shares

Share Price Determination

FUNDamentals ^TM

NAV Calculation

Each of the Fund’s share classes calculates its NAV as follows:


		(Value of assets of the share class)
NAV =		—(Liabilities of the share class)
		Number of outstanding shares of the class

Transaction Rules and Policies

Also remember that the Fund may refuse any order to buy or exchange shares. If this happens, we’ll return any money we’ve received, but no interest will be paid on that money.

Order Processing

FUNDamentals ^TM

Business Days

A business day is any day that the New York Stock Exchange (NYSE) is open. A business day ends at the close of regular trading on the NYSE, usually at 4:00 p.m. Eastern time. If the NYSE closes early, the business day ends as of the time the NYSE closes. On holidays and other days when the NYSE is closed, the Fund’s net asset value is not calculated and the Fund does not accept buy or sell orders. However, the value of the Fund’s assets may still be affected on such days to the extent that the Fund holds foreign securities that trade on days that foreign securities markets are open.

“Good Form”

An order is in “good form” if the Transfer Agent or your selling and/or servicing agent has all of the information and documentation it deems necessary to effect your order. For example, when you sell shares by letter of instruction, “good form” means that your letter has (i) complete instructions and the signatures of all account owners, (ii) a Medallion signature guarantee for amounts equal to or greater than $100,000 and (iii) any other required documents completed and attached. For the documents required for sales by corporations, agents, fiduciaries, surviving joint owners and other legal entities, call 800.345.6611.

Medallion Signature Guarantees

Written Transactions

Telephone Transactions

Telephone orders may not be as secure as written orders. Columbia Funds will take reasonable steps to confirm that telephone instructions are genuine. For example, we require

Online Transactions

Once you have an account, contact Columbia Funds at 800.345.6611 for more information on account trading restrictions and the special sign-up procedures required for online transactions. The Transfer Agent has procedures in place to authenticate electronic orders you deliver through the internet. You will be required to accept the terms of an online agreement and to establish and utilize a password in order to access online account services.

You can sell up to an aggregate of $100,000 of shares through the internet in any 30-day period if you qualify for internet orders.

Customer Identification Program

Small Account Policy—Accounts Below $250

Small Account Policy—Minimum Balance Fee

market value of Fund shares, sales loads applicable to a particular class of shares, or for other reasons.

Exceptions to the Above Small Account Policy (Accounts Below $250 and Minimum Balance Fee)

Small Account Policy—Broker/Dealer and Wrap Fee Accounts

Columbia Funds may automatically redeem shares at any time from broker/dealer networked accounts and wrap fee accounts that have account balances of $20 or less or that have less than one share.

Cash Flows

Information Sharing Agreements

As required by Rule 22c-2 under the 1940 Act, the Columbia Funds or certain of their service providers will enter into information sharing agreements with financial intermediaries, including participating life insurance companies and financial intermediaries that sponsor or offer retirement plans through which shares of the Columbia Funds are made available for purchase. Pursuant to Rule 22c-2, financial intermediaries are required, upon request, to: (i) provide shareholder account and transaction information and (ii) execute instructions from the Fund to restrict or prohibit further purchases of Fund shares by shareholders who have been identified by the Fund as having engaged in transactions that violate the Fund’s excessive trading policies and procedures. See Buying, Selling and Exchanging Shares – Excessive Trading Practices for more information.

Excessive Trading Practices

Some financial intermediaries apply their own restrictions or policies to underlying investor accounts, which may be more or less restrictive than those described here. This may impact the Fund’s ability to curtail excessive trading, even where it is identified. For these and other reasons, it is possible that excessive trading may occur despite the Fund’s efforts to detect and prevent it.

Risks of Excessive Trading – Excessive trading creates certain risks to the Fund’s long-term shareholders and may create the following adverse effects:

•

negative impact on the Fund’s performance;

•

potential dilution of the value of the Fund’s shares;

•

losses on the sale of investments resulting from the need to sell securities at less favorable prices;

•

increased taxable gains to the Fund’s remaining shareholders resulting from the need to sell securities to meet sell orders; and

•

increased brokerage and administrative costs.

Opening an Account and Placing Orders

Columbia Funds encourages you to consult with a financial advisor who can help you with your investment decisions and who can help you open an account. Once you have an account, you can buy, sell and exchange shares by contacting your financial advisor who will send your order to the Transfer Agent or your selling and/or servicing agent. As described in Buying, Selling and Exchanging Shares – Transaction Rules and Policies , once you have an account you can also communicate your orders directly to the Transfer Agent by mail, by telephone or online.

Buying Shares

Minimum Initial Investments

There is no minimum initial investment in Class Z shares for the following categories of eligible investors:

•

The minimum initial investment in Class Z shares for the following categories of eligible investors is $1,000:

•

The minimum initial investment in Class Z shares for the following categories of eligible investors is $2,500:

•

Any investor buying shares through a Columbia Management state tuition plan organized under Section 529 of the Internal Revenue Code.

•

Any trustee or director (or family member of a trustee or director) of a fund distributed by the Distributor.

•

Any employee (or family member of an employee) of Bank of America or one of its subsidiaries.

•

Any institutional investor who is a corporation, partnership, trust, foundation, endowment, institution, government

entity, or similar organization, which meets the respective qualifications for an accredited investor, as defined under the Securities Act of 1933.

•

For investors establishing a Systematic Investment Plan, the minimum initial investment is $50.

Minimum Additional Investments

There is no minimum additional investment for Class Z shares.

Systematic Investment Plan

Dividend Diversification

Wire Purchases

You may buy Class Z shares of the Fund by wiring money from your bank account to your Fund account by calling the Transfer Agent at 800.422.3737.

Electronic Funds Transfer

Other Purchase Rules You Should Know

•

Once the Transfer Agent or your selling and/or servicing agent receives your buy order in “good form,” your purchase will be made at the next calculated net asset value per share.

•

You generally buy Class Z shares at net asset value because no front-end sales charge applies to purchases of this share class.

•

Selling and/or servicing agents are responsible for sending your buy orders to the Transfer Agent and ensuring that we receive your money on time.

•

Shares bought are recorded on the books of the Fund. The Fund doesn’t issue certificates.

Selling Shares

When you sell your shares, the Fund is effectively buying them back from you. This is called a redemption.

Wire Redemptions

Electronic Funds Transfer

Systematic Withdrawal Plan

In-Kind Distributions

Other Redemption Rules You Should Know

•

Once the Transfer Agent or your selling and/or servicing agent receives your sell order in “good form,” your shares will be sold at the next calculated net asset value per share.

•

No interest will be paid on uncashed redemption checks.

•

Other restrictions may apply to retirement accounts. For information about these restrictions, contact your retirement plan administrator.

•

Also keep in mind Columbia Funds’ Small Account Policy, which is described above in Buying, Selling and Exchanging Shares – Transaction Rules and Policies .

Exchanging Shares

Systematic Exchanges

The rules described below for making exchanges apply to systematic exchanges.

Other Exchange Rules You Should Know

•

Exchanges are made at net asset value.

•

You can generally make exchanges between like share classes of any Columbia Fund. Some exceptions apply.

•

The rules for buying shares of a Columbia Fund generally apply to exchanges into that Fund.

•

You may make exchanges only into a Columbia Fund that is legally offered and sold in your state of residence.

•

You generally may make an exchange only into a Columbia Fund that is accepting investments.

•

The Fund may change or cancel your right to make an exchange by giving the amount of notice required by regulatory authorities (generally 60 days for a material change or cancellation).

•

Unless your account is part of a tax-advantaged arrangement, an exchange for shares of another fund is a taxable event, and you may recognize a gain or loss for tax purposes.

Distributions and Taxes

Distributions to Shareholders

A mutual fund can make money two ways:

•

It can earn income on its investments. Examples of fund income are interest paid on money market instruments and bonds, and dividends paid on common stocks.

•

FUNDamentals ^TM

Distributions

Declaration and Distribution Schedule


Declarations		daily
Distributions		monthly

The Fund may, however, pay distributions of net investment income more frequently.

If you buy shares of the Fund when it holds securities with unrealized capital gain, you may, in effect, receive part of your purchase price back if and when the Fund sells those

Taxes and Your Investment

•

To the extent distributions are taxable, such distributions generally are taxable to you when paid, whether they are paid in cash or automatically reinvested in additional shares of the Fund.

•

Distributions of the Fund’s net interest income from tax-exempt securities generally are not subject to federal income tax, but may be subject to state and local income and other taxes, as well as federal and state alternative minimum tax. Distributions of the Fund’s net interest income from tax-exempt securities of Maryland and its subdivisions generally also are not subject to Maryland individual income tax.

•

Revenue Service (IRS) has notified us that the TIN listed on your account is incorrect according to its records; or the IRS informs the Fund that you are otherwise subject to backup withholding.

FUNDamentals ^TM

Taxes

Financial Highlights

Columbia Maryland Intermediate Municipal Bond Fund—Class Z Shares


	Year Ended March 31, 2010			Year Ended March 31, 2009			Year Ended March 31, 2008			Year Ended March 31, 2007			Year Ended March 31, 2006 ^(a)
Net Asset Value, Beginning of Period	$	[ ]		$	10.44		$	10.63		$	10.57		$	10.78
Income from Investment Operations:
Net investment income ^(b)		[ ]			0.41			0.42			0.43			0.41
Net realized and unrealized gain (loss) on investments and futures contracts		[ ]			(0.35	)		(0.19	)		0.06			(0.21	)
Total from investment operations		[ ]			0.06			0.23			0.49			0.20
Less Distributions to Shareholders:
From net investment income		[ ]			(0.41	)		(0.42	)		(0.43	)		(0.41	)
Net Asset Value, End of Period	$	[ ]		$	10.09		$	10.44		$	10.63		$	10.57
Total return ^(c)(d)		[ ]	%		0.61	%		2.21	%		4.72	%		1.84	%
Ratios to Average Net Assets/Supplemental Data:
Net expenses before interest expense		[ ]	%		0.50	% ^(e)		0.50	% ^(e)		0.50	% ^(e)		0.50	% ^(e)
Interest expense		[ ]			—			—			—	% ^(f)		—	% ^(f)
Net expenses		[ ]	%		0.50	% ^(e)		0.50	% ^(e)		0.50	% ^(e)		0.50	% ^(e)
Waiver/Reimbursement		[ ]	%		0.15	%		0.16	%		0.17	%		0.16	%
Net investment income		[ ]	%		4.01	% ^(e)		3.99	% ^(e)		4.06	% ^(e)		3.84	% ^(e)
Portfolio turnover rate		[ ]	%		11	%		8	%		20	%		24	%
Net assets, end of period (000’s)	$	[ ]		$	126,661		$	135,506		$	141,094		$	148,553

^(a)	On August 22, 2005, the Fund’s Primary A shares were renamed Class Z shares.

^(b)	Per share data was calculated using the average shares outstanding during the period.

^(c)	Total return at net asset value assuming all distributions reinvested.

^(d)	Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

^(e)	The benefits derived from expense reductions had an impact of less than 0.01%.

^(f)	Rounds to less than 0.01%.

Hypothetical Fees and Expenses

The following supplemental hypothetical investment information provides additional information about the effect of the fees and expenses of the Fund, including investment advisory fees and other Fund costs, on the Fund’s returns over a 10-year period. The chart shows the estimated fees and expenses that would be charged on a hypothetical investment of $10,000 in Class Z shares of the Fund, assuming a 5% return each year, the cumulative return after fees and expenses and the hypothetical year-end balance after fees and expenses. The chart also assumes that all dividends and distributions are reinvested. The annual expense ratio used for the share class, which is the same as that stated in the Annual Fund Operating Expenses table, is presented in the chart and is net of any contractual fee waivers or expense reimbursements for the period of contractual commitment. Your actual costs may be higher or lower.

Columbia Maryland Intermediate Municipal Bond Fund—Class Z Shares


Maximum Initial Sales Charge 0.00%			Initial Hypothetical Investment Amount $10,000.00				Assumed Rate of Return 5%
Year	Cumulative Return Before Fees and Expenses		Annual Expense Ratio		Cumulative Return After Fees and Expenses		Hypothetical Year- End Balance After Fees and Expenses		Annual Fees and Expenses ^(a)
1	5.00	%	[ ]	%	[ ]	%	$	[ ]	$	[ ]
2	10.25	%	[ ]	%	[ ]	%	$	[ ]	$	[ ]
3	15.76	%	[ ]	%	[ ]	%	$	[ ]	$	[ ]
4	21.55	%	[ ]	%	[ ]	%	$	[ ]	$	[ ]
5	27.63	%	[ ]	%	[ ]	%	$	[ ]	$	[ ]
6	34.01	%	[ ]	%	[ ]	%	$	[ ]	$	[ ]
7	40.71	%	[ ]	%	[ ]	%	$	[ ]	$	[ ]
8	47.75	%	[ ]	%	[ ]	%	$	[ ]	$	[ ]
9	55.13	%	[ ]	%	[ ]	%	$	[ ]	$	[ ]
10	62.89	%	[ ]	%	[ ]	%	$	[ ]	$	[ ]
Total Gain After Fees and Expenses							$	[ ]
Total Annual Fees and Expenses Paid									$	[ ]

^(a)	Annual Fees and Expenses are calculated based on the average between the beginning and ending balance for each year. All information is calculated on an annual compounding basis.

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Columbia Maryland Intermediate Municipal Bond Fund

Class Z Shares

Prospectus, August 1, 2010

For More Information


By Mail:		Columbia Funds c/o Columbia Management Investment Services Corp. P.O. Box 8081 Boston, MA 02266-8081

By Telephone:		800.345.6611

Online:		www.columbiafunds.com

Annual and Semi-Annual Reports to Shareholders

Shareholder Communications with the Board

Statement of Additional Information

The SAI provides more detailed information about the Fund and its policies. The SAI is legally part of this prospectus (incorporated by reference). A copy has been filed with the SEC.

Information Provided by the SEC

FUNDamentals™ is a trademark of Ameriprise Financial.

The investment company registration number of Columbia Funds Series Trust, of which the Fund is a series, is 811-09645.

One Financial Center, Boston, MA 02111-2621

800.345.6611 www.columbiafunds.com

INT-36/[ ]-0810

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Prospectus

August 1, 2010

Columbia Funds

Columbia Virginia Intermediate Municipal Bond Fund

Ticker symbols

Class A Shares NVAFX

Class B Shares NVANX

Class C Shares NVRCX

Table of Contents


Columbia Virginia Intermediate Municipal Bond Fund		3

Investment Objective		3

Fees and Expenses of the Fund		3

Principal Investment Strategies		5

Principal Risks		5

Performance Information		8

Investment Adviser and Portfolio Manager(s)		9

Purchase and Sale of Fund Shares		9

Tax Information		9

Payments to Broker-Dealers and Other Financial Intermediaries		9

Additional Investment Strategies and Policies		10

Management of the Fund		12

Primary Service Providers		12

Other Roles and Relationships of Ameriprise Financial and its Affiliates—Certain Conflicts of Interest		14

Certain Legal Matters		15

Choosing a Share Class		16

Comparison of the Share Classes		16

Sales Charges and Commissions		17

Reductions/Waivers of Sales Charges		21

Distribution and Service Fees		23

Financial Intermediary Compensation		24

Buying, Selling and Exchanging Shares		25

Share Price Determination		25

Transaction Rules and Policies		26

Opening an Account and Placing Orders		30

Distributions and Taxes		34

Financial Highlights		38

Hypothetical Fees and Expenses		41

Icons Guide


		Investment Objective

		Fees and Expenses of the Fund

		Principal Investment Strategies

		Principal Risks

		Performance Information

		Other Roles and Relationships of Ameriprise Financial and its Affiliates - Certain Conflicts of Interest

Columbia Virginia Intermediate Municipal Bond Fund

Investment Objective

The Fund seeks current income exempt from federal income tax and Virginia individual income tax, consistent with moderate fluctuation of principal.

Fees and Expenses of the Fund

Shareholder Fees (fees paid directly from your investment)


	Class A Shares		Class B Shares		Class C Shares
Maximum sales charge (load) imposed on purchases, as a % of offering price	3.25	%	N/A		N/A
Maximum deferred sales charge (load) imposed on redemptions, as a % of the lower of the original purchase price or net asset value	1.00	% ^(a)	3.00	% ^(b)	1.00	% ^(c)

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)


	Class A Shares		Class B Shares		Class C Shares
Management fees	0.55	%	0.55	%	0.55	%
Distribution and/or service (Rule 12b-1) fees	0.25	%	1.00	%	1.00	%
Other expenses	[	]%	[	]%	[	]%
Acquired fund fees and expenses	0.01	%	0.01	%	0.01	%
Total annual Fund operating expenses ^(d)	[	]%	[	]%	[	]%

^(a)	This charge applies to investors who buy $1 million or more of Class A shares and redeem them within one year of purchase, with certain limited exceptions.

^(b)	This charge decreases over time.

^(c)	This charge applies to investors who buy Class C shares and redeem them within one year of purchase, with certain limited exceptions.

^(d)	“Total annual Fund operating expenses” do not match “Net Expenses” in the Financial Highlights section of this prospectus, which does not include, among other things, fees and expenses incurred as a result of investment in shares of certain pooled investment vehicles.

Example

The following example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds.

The example illustrates the hypothetical expenses that you would incur over the time periods indicated, and assumes that:

•

you invest $10,000 in Class A, Class B or Class C shares of the Fund for the periods indicated,

•

your investment has a 5% return each year, and

•

the Fund’s total annual operating expenses remain the same as shown in the table above.

Based on the assumptions listed above, your costs would be:

1 year

3 years

5 years

10 years

Class A Shares

[

]

[

]

[

]

[

]

Class B Shares

Assuming no redemption of shares

[

]

[

]

[

]

[

]

Assuming complete redemption of shares at the end of the period

[

]

[

]

[

]

[

]

Class C Shares

Assuming no redemption of shares

[

]

[

]

[

]

[

]

Assuming complete redemption of shares at the end of the period

[

]

[

]

[

]

[

]

Remember this is an example only. Your actual costs may be higher or lower.

Portfolio Turnover

Principal Investment Strategies

Under normal circumstances, the Fund invests at least 80% of its net assets in securities that pay interest exempt from federal income tax (but not necessarily the federal alternative minimum tax) and Virginia individual income tax. These securities are issued by or on behalf of the Commonwealth of Virginia, its political subdivisions, agencies, instrumentalities and authorities, and other qualified issuers.

Principal Risks

•

Interest Rate Risk – Debt securities are subject to interest rate risk. In general, if prevailing interest rates rise, the values of debt securities will tend to fall, and if interest rates fall, the values of debt securities will tend to rise. Changes in the value of a debt security usually will not affect the amount of income the Fund receives from it but may affect the value of the Fund’s shares. Interest rate risk is generally greater for debt securities with longer maturities/durations.

•

Derivatives Risk – Derivatives are financial contracts whose values are, for example, based on (or “derived” from) traditional securities (such as a stock or bond), assets (such as a commodity like gold or a foreign currency), reference rates (such as LIBOR) or market indices (such as the S&P 500 ^® Index). Derivatives involve special risks and may result in losses or may limit the Fund’s potential gain from favorable market movements. Derivative strategies often involve leverage, which may exaggerate a loss, potentially causing the Fund to lose more money than it would have lost had it invested in the underlying security or other asset. The values of derivatives may move in unexpected ways, especially in unusual market conditions, and may result in increased volatility, among other consequences. The use of derivatives may also increase the amount of taxes payable by shareholders holding shares in a taxable account. Other risks arise from the Fund’s potential inability to terminate or to sell derivative positions. A liquid secondary market may not always exist for the Fund’s derivative positions at times when the Fund might wish to terminate or to sell such positions. Over-the-counter instruments (investments not traded on an exchange) may be illiquid, and transactions in derivatives traded in the over-the-counter market are subject to the risk that the other party will not meet its obligations. The use of derivatives also involves the risks of mispricing or improper valuation and that changes in the value of the derivative may not correlate perfectly with the underlying security, asset, reference rate or index. The Fund also may not be able to find a suitable derivative transaction counterparty, and thus may be unable to engage in derivative transactions when it is deemed favorable to do so, or at all. For more information on the risks of derivative investments and strategies, see the Statement of Additional Information.

•

Changing Distribution Levels Risk —The amount of the distributions paid by the Fund generally depends on the amount of interest and/or dividends received by the Fund on the securities it holds. The Fund may not be able to pay distributions or may have to reduce its distribution level if the interest and/or dividends the Fund receives from its investments decline.

•

Performance Information

Year by Year Total Return (%) as of December 31 Each Year*

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*	Year-to-date return as of June 30, 2010: [ ]%.

Best and Worst Quarterly Returns During this Period


Best:	[ ] quarter [ ]:	[ ]%
Worst:	[ ] quarter [ ]:	[ ]%

Average Annual Total Return as of December 31, 2009


	1 year		5 years		10 years
Class A shares returns before taxes	[	]%	[	]%	[	]%
Class A shares returns after taxes on distributions	[	]%	[	]%	[	]%
Class A shares returns after taxes on distributions and sale of Fund shares	[	]%	[	]%	[	]%
Class B shares returns before taxes	[	]%	[	]%	[	]%
Class C shares returns before taxes	[	]%	[	]%	[	]%
Barclays Capital 3-15 Year Blend Municipal Bond Index (reflects no deductions for fees, expenses or taxes)	[	]%	[	]%	[	]%

Investment Adviser and Portfolio Manager(s)

Investment Adviser

Columbia Management Investment Advisers, LLC

Portfolio Manager

James D’Arcy, CFA

Manager. Service with the Fund since 2010.

Purchase and Sale of Fund Shares

Tax Information

Payments to Broker-Dealers and Other Financial Intermediaries

Additional Investment Strategies and Policies

Changing the Fund’s Investment Objective and Policies

Investment Guidelines

Holding Other Kinds of Investments

Investing in Money Market Funds

Lending Securities

Portfolio Holdings Disclosure

The Fund’s complete portfolio holdings as of a calendar quarter-end are disclosed approximately 30 calendar days after each such quarter-end.

In addition, more current information concerning the Fund’s portfolio holdings as of specified dates also may be disclosed on the Columbia Funds’ website.

Investing Defensively

Mailings to Households

Additional Information on Portfolio Turnover

A mutual fund that replaces, or turns over, more than 100% of its investments in a year is considered to have a high portfolio turnover rate. A high portfolio turnover rate can generate larger distributions of short-term capital gains to shareholders, which for individuals are generally taxable at higher rates than long-term capital gains for U.S. federal income tax purposes. A high portfolio turnover rate can also mean higher brokerage and other transaction costs, which could reduce a fund’s returns. In general, the greater the volume of buying and selling by a fund, the greater the impact that brokerage commissions will have on its returns. The Fund generally buys securities for capital appreciation, investment income or both. However, the Fund may sell securities regardless of how long they’ve been held. You’ll find the Fund’s portfolio turnover rate for its most recent fiscal year in the Fees and Expenses of the Fund — Portfolio Turnover section of this prospectus and portfolio turnover rates for prior fiscal years in the Financial Highlights section of this prospectus.

Management of the Fund

Primary Service Providers

The Adviser

Subadviser(s)

The Adviser may engage an investment subadviser or subadvisers to make the day-to-day investment decisions for the Fund. The Adviser retains ultimate responsibility (subject to Board oversight) for overseeing any subadviser it engages and for evaluating the Fund’s needs and the subadvisers’ skills and abilities on an ongoing basis. Based on its evaluations, the Adviser may at times recommend to the Board that the Fund change, add or terminate one or more subadvisers; continue to retain a subadviser even though the subadviser’s ownership or corporate structure has changed; or materially change a subadvisory agreement with a subadviser. The SEC has issued an order that permits the Adviser, subject to the approval of the Board, to appoint an unaffiliated subadviser or to change the terms of a subadvisory agreement for the Fund without first obtaining shareholder approval. The order permits the Fund to add or to change unaffiliated subadvisers or to change the fees paid to subadvisers from time to time without the expense and delays associated with obtaining shareholder approval of the change. The Adviser and its affiliates may have other relationships, including significant financial relationships, with current or potential subadvisers or their affiliates, which may create certain conflicts of interest. When making recommendations to the Board to appoint or to change a subadviser, or to change the terms of a subadvisory agreement, the Adviser discloses to the Board the nature of any material relationships it has with a subadviser or its affiliates.

At present, the Adviser has not engaged any investment subadviser for the Fund.

Portfolio Manager

James D’Arcy, CFA

Manager. Service with the Fund since 2010.

The Administrator

Annual Administration Fee,

as a % of Average Daily Net Assets


Columbia Virginia Intermediate Municipal Bond Fund		0.15	%

The Distributor

The Transfer Agent

The Transfer Agent is a registered transfer agent and a wholly-owned subsidiary of Ameriprise Financial. The Transfer Agent’s responsibilities include processing purchases, sales and exchanges, calculating and paying distributions, keeping shareholder records, preparing account statements and providing customer service. The Fund pays the Transfer Agent monthly fees on a per-account basis. Fees paid to the Transfer Agent include reimbursements for certain out-of-pocket expenses and sub-transfer agency fees, subject to certain limitations, paid by the Transfer Agent on the Fund’s behalf.

Expense Reimbursement Arrangements

Other Roles and Relationships of Ameriprise Financial and its Affiliates—Certain Conflicts of Interest

Conflicts of interest and limitations that could affect a Columbia Fund may arise from, for example, the following:

•

compensation and other benefits received by the Adviser and other Ameriprise Financial affiliates related to the management/administration of a Columbia Fund and the sale of its shares;

•

separate and potentially divergent management of a Columbia Fund and other funds and accounts advised/managed by the Adviser and other Ameriprise Financial affiliates;

•

regulatory and other investment restrictions on investment activities of the Adviser and other Ameriprise Financial affiliates and accounts advised/managed by them;

•

insurance and other relationships of Ameriprise Financial affiliates with companies and other entities in which a Columbia Fund invests; and

•

regulatory and other restrictions relating to the sharing of information between Ameriprise Financial and its affiliates, including the Adviser, and a Columbia Fund.

Additional information about Ameriprise Financial and the types of conflicts of interest and other matters referenced above is set forth in the “Investment Advisory and Other Services—Other Roles and Relationships of Ameriprise Financial and its Affiliates—Certain Conflicts of Interest” section of the SAI, which is identified by the icon. Investors in the Columbia Funds should carefully review these disclosures and consult with their financial advisor if they have any questions.

Certain Legal Matters

Ameriprise Financial and certain of its affiliates have historically been involved in a number of legal, arbitration and regulatory proceedings, including routine litigation, class actions and governmental actions, concerning matters arising in connection with the conduct of their business activities. Ameriprise Financial believes that the Fund is not currently the subject of, and that neither Ameriprise Financial nor any of its affiliates is the subject of, any pending legal, arbitration or regulatory proceedings that are likely to have a material adverse effect on the Fund or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Fund. Information regarding certain pending and settled legal proceedings may be found in the Fund’s shareholder reports and in the SAI. Additionally, Ameriprise Financial is required to make 10-Q, 10-K and, as necessary, 8-K filings with the SEC on legal and regulatory matters that relate to Ameriprise Financial and its affiliates. Copies of these filings may be obtained by accessing the SEC website at www.sec.gov.

Choosing a Share Class

Comparison of the Share Classes

Share Class Features


	Class A Shares	Class B Shares	Class C Shares
Eligible Investors and Minimum Initial Investments ^(a)	Minimum initial investments range from $0 to $2,500; the share class is available to the general public for investment.	The Fund no longer accepts investments from new or existing investors in Class B shares, except through a reinvestment of a dividend or capital gain distribution, or a permitted exchange as described in more detail under Buying, Selling and Exchanging Shares - Opening an Account and Placing Orders – Buying Shares - Class B Shares Closing .	Minimum initial investments range from $0 to $2,500; the share class is available to the general public for investment.

Investment Limits	none	up to $49,999 (based on aggregate account value) ^(b)	up to $999,999

Conversion Features	none	convert to Class A shares eight years after purchase	none

Front-End Sales Charges ^(c)	3.25% maximum, declining to 0.00% on investments of $1 million or more	none	none

Contingent Deferred Sales Charges (CDSCs) ^(c)	none, except a 1.00% CDSC applies to certain investments of between $1 million and $50 million sold within one year of purchase	3.00% maximum, gradually declining to 0.00% after four years	1.00% on investments sold within one year of purchase

Maximum Distribution and Service Fees	0.25% combined distribution and service fee	0.75% distribution fee 0.25% service fee	0.75% distribution fee 0.25% service fee

^(a)	See Buying, Selling and Exchanging Shares – Opening an Account and Placing Orders for more details on the eligible investors and investment minimums of these share classes.

^(b)

^(c)	See Choosing a Share Class – Reductions/Waivers of Sales Charges for information about certain exceptions to these sales charges.

FUNDamentals ^TM

Selling and/or Servicing Agents

The terms “selling agent” and “servicing agent” refer to the financial intermediary that employs your financial advisor. Selling and/or servicing agents include, for example, brokerage firms, banks, investment advisors, third party administrators and other financial intermediaries, including Ameriprise Financial and its affiliates.

Sales Charges and Commissions

Class A Shares—Front-End Sales Charge

FUNDamentals ^TM

Front-End Sales Charge Calculation

The following table presents the front-end sales charge as a percentage of both the offering price and the net amount invested.

•

The offering price per share is the net asset value per share plus any front-end sales charge that applies.

•

The net asset value (or NAV) per share is the price of a share calculated by the Fund every business day.

The dollar amount of the sales charge is the difference between the offering price of the shares you buy (based on the applicable sales charge in the table) and the net asset value of those shares.

The front-end sales charge you’ll pay on Class A shares:

•

depends on the amount you’re investing (generally, the larger the investment, the smaller the percentage sales charge), and

•

is based on the total amount of your purchase and the value of your account.

Class A Shares—Front-End Sales Charge—Breakpoint Schedule


Dollar amount of shares bought ^(a)	Sales charge as a % of the offering price ^(b)		Sales charge as a % of the net amount invested ^(b)		Amount retained by or paid to selling and/or servicing agents as a % of the offering price
$0 – $99,999	3.25	%	3.36	%	3.00	%
$100,000 – $249,999	2.50	%	2.56	%	2.25	%
$250,000 – $499,999	2.00	%	2.04	%	1.75	%
$500,000 – $999,999	1.50	%	1.52	%	1.25	%
$1,000,000 or more	0.00	%	0.00	%	1.00	% ^(c)(d)

^(a)	Purchase amounts and account values are aggregated among all eligible Columbia Fund accounts for the purposes of this table.

^(b)

^(c)

^(d)	For certain group retirement plans, selling and/or servicing agents are eligible to receive a 1.00% commission from the Distributor on all purchases up to $3 million, including those in amounts of less than $1 million that are coded as commission-eligible trades.

Class A Shares—CDSC and Commissions

In some cases, you’ll pay a CDSC if you sell Class A shares that you bought without an initial sales charge.

•

The CDSC on Class A shares:

•

is applied to the net asset value at the time of your purchase or sale, whichever is lower, and

•

will not be applied to any shares you receive through reinvested distributions.

The Distributor may also pay your selling and/or servicing agent a cumulative commission when you buy $1 million or more of Class A shares, according to the following schedule:

Class A Shares—Commission Schedule


Purchase Amount	Commission Level (as a % of net asset value per share)
$1 million – $2,999,999	1.00	%
$3 million – $49,999,999	0.50	%
$50 million or more	0.25	%

FUNDamentals ^TM

Contingent Deferred Sales Charge

Class B and Class C Shares—Sales Charges

You don’t pay a front-end sales charge when you buy Class B or Class C shares, but you may pay a CDSC when you sell Class B or Class C shares.

The CDSC on Class B and Class C shares:

•

is applied to the net asset value at the time of your purchase or sale, whichever is lower,

•

will not be applied to any shares you receive through reinvested distributions, and

•

generally declines each year until there is no sales charge for selling shares.

Class B Shares—CDSC and Commissions

Class B Shares—CDSC Schedule


Number of Years Class B Shares Held		Applicable CDSC
One		3.00%
Two		3.00%
Three		2.00%
Four		1.00%
Five		none
Six		none
Seven		none
Eight		none
Nine		Conversion to Class A Shares

The following rules apply to the conversion of Class B shares to Class A shares:

•

Class B shares are converted on or about the 15th day of the month that they become eligible for conversion.

•

Any shares you received from reinvested distributions on these shares generally will convert to Class A shares at the same time.

•

No sales charge or other charges apply, and conversions are free from U.S. federal income tax.

Class C Shares—CDSC and Commissions

Reductions/Waivers of Sales Charges

Front-End Sales Charge Reductions

FUNDamentals ^TM

Your “Immediate Family” and Account Value Aggregation

Eligible Accounts

The types of accounts that are eligible for the account value aggregation purposes described above are:

•

individual accounts,

•

joint accounts,

•

certain IRA accounts,

•

certain health savings accounts,

•

certain trust accounts, and

•

Uniform Gifts to Minors Act (UGMA)/Uniform Transfers to Minors Act (UTMA) accounts.

Eligible accounts do not include Class R share accounts or accounts holding shares of money market funds that used the Columbia brand before May 1, 2010.

Front-End Sales Charge Waivers

CDSC Waivers

The Fund may change or cancel these terms at any time. Any change or cancellation applies only to future purchases.

For more information about the sales charge reductions and waivers described here, consult the SAI.

Distribution and Service Fees

The table below shows the maximum annual distribution and service fees (as an annual % of average daily net assets) and the combined amount of such fees applicable to each share class:

Distribution and Service (Rule 12b-1) Fees


	Distribution Fee		Service Fee		Combined Total
Class A	—	^(a)	—	^(a)	0.25	% ^(a)
Class B	0.75	%	0.25	%	1.00	%
Class C	0.75	%	0.25	%	1.00	%

^(a)	The Fund’s Class A shares pay a combined distribution and service fee pursuant to the Fund’s combined distribution and shareholder servicing plan for Class A shares.

Financial Intermediary Compensation

The Distributor and the Adviser make payments, from their own resources, to certain financial intermediaries, including other Ameriprise Financial affiliates, for marketing/sales support services relating to the Columbia Funds. Such payments are generally based upon one or more of the following factors: average net assets of the Columbia Funds sold by the Distributor attributable to that intermediary, gross sales of the Columbia Funds distributed by the Distributor attributable to that intermediary, reimbursement of ticket charges (fees that an intermediary firm charges its representatives for effecting transactions in Fund shares) or a negotiated lump sum payment. While the financial arrangements may vary for each intermediary, the support payments to any one intermediary are generally between 0.05% and 0.50% on an annual basis for payments based on average net assets of the Fund attributable to the intermediary, and between 0.05% and 0.25% on an annual basis for firms receiving a payment based on gross sales of the Columbia Funds attributable to the intermediary.

These payments for shareholder servicing support vary by financial intermediary but generally are not expected, with certain limited exceptions, to exceed 0.40% of the average aggregate value of the Fund’s shares in any financial intermediary’s program on an annual basis for those classes of shares that pay a service fee pursuant to a plan under Rule 12b-1 under the 1940 Act, and 0.45% of the average aggregate value of the Fund’s shares in any financial intermediary’s program on an annual basis for those classes of shares that do not pay a service fee pursuant to a plan under Rule 12b-1 under the 1940 Act.

Amounts paid by the Distributor and the Adviser and their affiliates are paid out of the Distributor’s and the Adviser’s own resources and do not increase the amount paid by you or the Fund. You can find further details about the payments made by the Distributor and the Adviser and their affiliates and the services provided by financial intermediaries as well as a list of the intermediaries to which the Distributor and the Adviser have agreed to make marketing support payments in the SAI. Your financial intermediary may charge you fees and commissions in addition to those described in this prospectus. You should consult with your financial intermediary and review carefully any disclosure your financial intermediary provides regarding its services and compensation. Depending on the financial arrangement in place at any particular time, a financial intermediary and its financial consultants may have a financial incentive for recommending the Fund or a particular share class over others. See Management of the Fund – Other Roles and Relationships of Ameriprise Financial and its Affiliates – Certain Conflicts of Interest for more information.

Buying, Selling and Exchanging Shares

Share Price Determination

FUNDamentals ^TM

NAV Calculation

Each of the Fund’s share classes calculates its NAV as follows:

Transaction Rules and Policies

Also remember that the Fund may refuse any order to buy or exchange shares. If this happens, we’ll return any money we’ve received, but no interest will be paid on that money.

Order Processing

FUNDamentals ^TM

Business Days

A business day is any day that the New York Stock Exchange (NYSE) is open. A business day ends at the close of regular trading on the NYSE, usually at 4:00 p.m. Eastern time. If the NYSE closes early, the business day ends as of the time the NYSE closes. On holidays and other days when the NYSE is closed, the Fund’s net asset value is not calculated and the Fund does not accept buy or sell orders. However, the value of the Fund’s assets may still be affected on such days to the extent that the Fund holds foreign securities that trade on days that foreign securities markets are open.

“Good Form”

An order is in “good form” if the Transfer Agent or your selling and/or servicing agent has all of the information and documentation it deems necessary to effect your order. For example, when you sell shares by letter of instruction, “good form” means that your letter has (i) complete instructions and the signatures of all account owners, (ii) a Medallion signature guarantee for amounts equal to or greater than $100,000 and (iii) any other required documents completed and attached. For the documents required for sales by corporations, agents, fiduciaries, surviving joint owners and other legal entities, call 800.345.6611.

Medallion Signature Guarantees

Written Transactions

Telephone Transactions

Telephone orders may not be as secure as written orders. Columbia Funds will take reasonable steps to confirm that telephone instructions are genuine. For example, we require proof of your identification before we will act on instructions received by telephone and may record telephone conversations. However, the Fund and its agents will not be responsible for any losses, costs or expenses resulting from an unauthorized telephone instruction when reasonable steps have been taken to confirm that telephone instructions are

genuine. Telephone orders may be difficult to complete during periods of significant economic or market change or business interruption.

Online Transactions

Once you have an account, contact Columbia Funds at 800.345.6611 for more information on account trading restrictions and the special sign-up procedures required for online transactions. The Transfer Agent has procedures in place to authenticate electronic orders you deliver through the internet. You will be required to accept the terms of an online agreement and to establish and utilize a password in order to access online account services.

You can sell up to an aggregate of $100,000 of shares through the internet in any 30-day period if you qualify for internet orders.

Customer Identification Program

Small Account Policy—Accounts Below $250

Small Account Policy—Minimum Balance Fee

Exceptions to the Above Small Account Policy (Accounts Below $250 and Minimum Balance Fee)

Small Account Policy—Broker/Dealer and Wrap Fee Accounts

Columbia Funds may automatically redeem shares at any time from broker/dealer networked accounts and wrap fee accounts that have account balances of $20 or less or that have less than one share.

Cash Flows

Information Sharing Agreements

As required by Rule 22c-2 under the 1940 Act, the Columbia Funds or certain of their service providers will enter into information sharing agreements with financial intermediaries, including participating life insurance companies and financial intermediaries that sponsor or offer retirement plans through which shares of the Columbia Funds are made available for purchase. Pursuant to Rule 22c-2, financial intermediaries are required, upon request, to: (i) provide shareholder account and transaction information and (ii) execute instructions from the Fund to restrict or prohibit further purchases of Fund shares by shareholders who have been identified by the Fund as having engaged in transactions that violate the Fund’s excessive trading policies and procedures. See Buying, Selling and Exchanging Shares – Excessive Trading Practices for more information.

Excessive Trading Practices

Some financial intermediaries apply their own restrictions or policies to underlying investor accounts, which may be more or less restrictive than those described here. This may impact the Fund’s ability to curtail excessive trading, even where it is identified. For these and other reasons, it is possible that excessive trading may occur despite the Fund’s efforts to detect and prevent it.

Risks of Excessive Trading – Excessive trading creates certain risks to the Fund’s long-term shareholders and may create the following adverse effects:

•

negative impact on the Fund’s performance;

•

potential dilution of the value of the Fund’s shares;

•

losses on the sale of investments resulting from the need to sell securities at less favorable prices;

•

increased taxable gains to the Fund’s remaining shareholders resulting from the need to sell securities to meet sell orders; and

•

increased brokerage and administrative costs.

Opening an Account and Placing Orders

Columbia Funds encourages you to consult with a financial advisor who can help you with your investment decisions and who can help you open an account. Once you have an account, you can buy, sell and exchange shares by contacting your financial advisor who will send your order to the Transfer Agent or your selling and/or servicing agent. As described in Buying, Selling and Exchanging Shares – Transaction Rules and Policies , once you have an account you can also communicate your orders directly to the Transfer Agent by mail, by telephone or online.

Buying Shares

Eligible Investors

Class B Shares Closing

Additional Class B shares will be issued only to existing investors in Class B shares and only through the following two types of transactions (Qualifying Transactions):

•

Dividends and/or capital gain distributions may continue to be reinvested in Class B shares of the Fund.

•

Shareholders invested in Class B shares of the Fund may exchange those shares for Class B shares of other Columbia Funds offering such shares.

Any initial purchase orders for the Fund’s Class B shares will be rejected (other than through a Qualifying Transaction that is an exchange transaction).

Minimum Initial Investments

Minimum Additional Investments

There is no minimum additional investment for Class A or Class C shares.

Systematic Investment Plan

Dividend Diversification

Generally, you may automatically invest distributions made by another Columbia Fund into the same class of shares (and in some cases certain other classes of shares) of the Fund at no additional sales charge. A sales charge may apply when you invest distributions made by a Columbia Fund that were not assessed a sales charge at the time of your initial purchase. Call Columbia Funds at 800.345.6611 for details. See Buying, Selling and Exchanging Shares—Opening an Account and Placing Orders—Buying Shares—Class B Shares Closing for restrictions applicable to Class B shares.

Wire Purchases

You may buy Class A or Class C shares of the Fund by wiring money from your bank account to your Fund account by calling the Transfer Agent at 800.422.3737.

Electronic Funds Transfer

Other Purchase Rules You Should Know

•

You generally buy Class A shares at the public offering price per share because purchases of Class A shares are generally subject to a front-end sales charge.

•

You buy Class B and Class C shares at net asset value per share because no front-end sales charge applies to purchases of these share classes.

•

Selling and/or servicing agents are responsible for sending your buy orders to the Transfer Agent and ensuring that we receive your money on time.

•

Shares bought are recorded on the books of the Fund. The Fund doesn’t issue certificates.

Selling Shares

When you sell your shares, the Fund is effectively buying them back from you. This is called a redemption.

Wire Redemptions

Electronic Funds Transfer

Systematic Withdrawal Plan

guaranteed.

In-Kind Distributions

Other Redemption Rules You Should Know

•

No interest will be paid on uncashed redemption checks.

•

Other restrictions may apply to retirement accounts. For information about these restrictions, contact your retirement plan administrator.

•

Also keep in mind Columbia Funds’ Small Account Policy, which is described above in Buying, Selling and Exchanging Shares – Transaction Rules and Policies .

Exchanging Shares

Systematic Exchanges

The rules described below for making exchanges apply to systematic exchanges.

Other Exchange Rules You Should Know

•

Exchanges are made at net asset value.

•

You can generally make exchanges between like share classes of any Columbia Fund. Some exceptions apply.

•

A sales charge may apply when you exchange shares of a Columbia Fund that were not assessed a sales charge at the time of your initial purchase.

•

The rules for buying shares of a Columbia Fund generally apply to exchanges into that Fund.

•

You may make exchanges only into a Columbia Fund that is legally offered and sold in your state of residence.

•

You generally may make an exchange only into a Columbia Fund that is accepting investments.

•

The Fund may change or cancel your right to make an exchange by giving the amount of notice required by regulatory authorities (generally 60 days for a material change or cancellation).

•

Unless your account is part of a tax-advantaged arrangement, an exchange for shares of another fund is a taxable event, and you may recognize a gain or loss for tax purposes.

Same-Fund Exchange Privilege for Class Z Shares

Distributions and Taxes

Distributions to Shareholders

A mutual fund can make money two ways:

•

It can earn income on its investments. Examples of fund income are interest paid on money market instruments and bonds, and dividends paid on common stocks.

•

FUNDamentals ^TM

Distributions

Declaration and Distribution Schedule


Declarations		daily
Distributions		monthly

The Fund may, however, pay distributions of net investment income more frequently.

If you buy shares of the Fund when it holds securities with unrealized capital gain, you may, in effect, receive part of your purchase price back if and when the Fund sells those

Taxes and Your Investment

•

To the extent distributions are taxable, such distributions generally are taxable to you when paid, whether they are paid in cash or automatically reinvested in additional shares of the Fund.

•

Distributions of the Fund’s net interest income from tax-exempt securities generally are not subject to federal income tax, but may be subject to state and local income and other taxes, as well as federal and state alternative minimum tax. Distributions of the Fund’s net interest income from tax-exempt securities of Virginia and its subdivisions generally also are not subject to Virginia individual income tax.

•

FUNDamentals ^TM

Taxes

Financial Highlights

Columbia Virginia Intermediate Municipal Bond Fund—Class A Shares


	Year Ended March 31, 2010			Year Ended March 31, 2009			Year Ended March 31, 2008			Year Ended March 31, 2007			Year Ended March 31, 2006 ^(a)
Net Asset Value, Beginning of Period	$	[	]	$	10.65		$	10.73		$	10.67		$	10.86
Income from Investment Operations:
Net investment income (b)		[	]		0.37			0.38			0.38			0.38
Net realized and unrealized gain (loss) on investments and futures contracts		[	]		(0.08	)		(0.08	)		0.11			(0.18	)
Total from investment operations		[	]		0.29			0.30			0.49			0.20
Less Distributions to Shareholders:
From net investment income		[	]		(0.37	)		(0.38	)		(0.38	)		(0.38	)
From net realized gains		[	]		—			—	^(c)		(0.05	)		(0.01	)
Total distributions to shareholders		[	]		(0.37	)		(0.38	)		(0.43	)		(0.39	)
Net Asset Value, End of Period	$	[	]	$	10.57		$	10.65		$	10.73		$	10.67
Total return (d)(e)		[	]%		2.83	%		2.85	%		4.64	%		1.88	%
Ratios to Average Net Assets/Supplemental Data:
Net expenses before interest expense		[	]%		0.75	% ^(f)		0.75	% ^(f)		0.75	% ^(f)		0.75	% ^(f)
Interest expense		[	]		—			—			—	% ^(g)		—	% ^(g)
Net expenses		[	]%		0.75	% ^(f)		0.75	% ^(f)		0.75	% ^(f)		0.75	% ^(f)
Waiver/Reimbursement		[	]%		0.11	%		0.12	%		0.13	%		0.12	%
Net investment income		[	]%		3.54	% ^(f)		3.51	% ^(f)		3.55	% ^(f)		3.54	% ^(f)
Portfolio turnover rate		[	]%		12	%		12	%		22	%		30	%
Net assets, end of period (000’s)	$	[	]	$	47,970		$	48,158		$	48,924		$	53,054

^(a)	On August 22, 2005, the Fund’s Investor A shares were renamed Class A shares.

^(b)	Per share data was calculated using the average shares outstanding during the period.

^(c)	Rounds to less than $0.01 per share.

^(d)	Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge.

^(e)	Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

^(f)	The benefits derived from expense reductions had an impact of less than 0.01%.

^(g)	Rounds to less than 0.01%.

Columbia Virginia Intermediate Municipal Bond Fund—Class B Shares


	Year Ended March 31, 2010			Year Ended March 31, 2009			Year Ended March 31, 2008			Year Ended March 31, 2007			Year Ended March 31, 2006 ^(a)
Net Asset Value, Beginning of Period	$	[	]	$	10.65		$	10.73		$	10.67		$	10.86
Income from Investment Operations:
Net investment income (b)		[	]		0.29			0.30			0.30			0.30
Net realized and unrealized gain (loss) on investments and futures contracts		[	]		(0.08	)		(0.08	)		0.11			(0.18	)
Total from investment operations		[	]		0.21			0.22			0.41			0.12
Less Distributions to Shareholders:
From net investment income		[	]		(0.29	)		(0.30	)		(0.30	)		(0.30	)
From net realized gains		[	]		—			—	^(c)		(0.05	)		(0.01	)
Total distributions to shareholders		[	]		(0.29	)		(0.30	)		(0.35	)		(0.31	)
Net Asset Value, End of Period	$	[	]	$	10.57		$	10.65		$	10.73		$	10.67
Total return (d)(e)		[	]%		2.07	%		2.08	%		3.86	%		1.12	%
Ratios to Average Net Assets/Supplemental Data:
Net expenses before interest expense		[	]%		1.50	% ^(f)		1.50	% ^(f)		1.50	% ^(f)		1.50	% ^(f)
Interest expense		[	]		—			—			—	% ^(g)		—	% ^(g)
Net expenses		[	]%		1.50	% ^(f)		1.50	% ^(f)		1.50	% ^(f)		1.50	% ^(f)
Waiver/Reimbursement		[	]%		0.11	%		0.12	%		0.13	%		0.12	%
Net investment income		[	]%		2.80	% ^(f)		2.77	% ^(f)		2.80	% ^(f)		2.79	% ^(f)
Portfolio turnover rate		[	]%		12	%		12	%		22	%		30	%
Net assets, end of period (000’s)	$	[	]	$	2,220		$	2,434		$	3,119		$	4,360

^(a)	On August 22, 2005, the Fund’s Investor B shares were renamed Class B shares.

^(b)	Per share data was calculated using the average shares outstanding during the period.

^(c)	Rounds to less than $0.01 per share.

^(d)	Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge.

^(e)	Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

^(f)	The benefits derived from expense reductions had an impact of less than 0.01%.

^(g)	Rounds to less than 0.01%.

Columbia Virginia Intermediate Municipal Bond Fund—Class C Shares


	Year Ended March 31, 2010			Year Ended March 31, 2009			Year Ended March 31, 2008			Year Ended March 31, 2007			Year Ended March 31, 2006 ^(a)
Net Asset Value, Beginning of Period	$	[	]	$	10.65		$	10.73		$	10.67		$	10.86
Income from Investment Operations:
Net investment income (b)		[	]		0.29			0.30			0.30			0.30
Net realized and unrealized gain (loss) on investments and futures contracts		[	]		(0.08	)		(0.08	)		0.11			(0.18	)
Total from investment operations		[	]		0.21			0.22			0.41			0.12
Less Distributions to Shareholders:
From net investment income		[	]		(0.29	)		(0.30	)		(0.30	)		(0.30	)
From net realized gains		[	]		—			—	^(c)		(0.05	)		(0.01	)
Total distributions to shareholders		[	]		(0.29	)		(0.30	)		(0.35	)		(0.31	)
Net Asset Value, End of Period	$	[	]	$	10.57		$	10.65		$	10.73		$	10.67
Total return (d)(e)		[	]%		2.07	%		2.08	%		3.86	%		1.12	%
Ratios to Average Net Assets/Supplemental Data:
Net expenses before interest expense		[	]%		1.50	% ^(f)		1.50	% ^(f)		1.50	% ^(f)		1.50	% ^(f)
Interest expense		[	]		—			—			—	% ^(g)		—	% ^(g)
Net expenses		[	]%		1.50	% ^(f)		1.50	% ^(f)		1.50	% ^(f)		1.50	% ^(f)
Waiver/Reimbursement		[	]%		0.11	%		0.12	%		0.13	%		0.12	%
Net investment income		[	]%		2.79	% ^(f)		2.77	% ^(f)		2.80	% ^(f)		2.79	% ^(f)
Portfolio turnover rate		[	]%		12	%		12	%		22	%		30	%
Net assets, end of period (000’s)	$	[	]	$	1,898		$	967		$	1,340		$	1,450

^(a)	On August 22, 2005, the Fund’s Investor C shares were renamed Class C shares.

^(b)	Per share data was calculated using the average shares outstanding during the period.

^(c)	Rounds to less than $0.01 per share.

^(d)	Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge.

^(e)	Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

^(f)	The benefits derived from expense reductions had an impact of less than 0.01%.

^(g)	Rounds to less than 0.01%.

Hypothetical Fees and Expenses

Columbia Virginia Intermediate Municipal Bond Fund—Class A Shares

Maximum Initial Sales Charge 3.25%

Initial Hypothetical Investment Amount
$10,000.00

Assumed Rate of Return 5%

Year

Cumulative Return
Before Fees and
Expenses

Annual Expense
Ratio

Cumulative Return
After Fees and
Expenses

Hypothetical Year-
End Balance After
Fees and Expenses

Annual Fees and
Expenses ^(a)

5.00

[

] %

[

] % ^(b)

[

]

[

]

10.25

[

] %

[

] %

[

]

[

]

15.76

[

] %

[

] %

[

]

[

]

21.55

[

] %

[

] %

[

]

[

]

27.63

[

] %

[

] %

[

]

[

]

34.01

[

] %

[

] %

[

]

[

]

40.71

[

] %

[

] %

[

]

[

]

47.75

[

] %

[

] %

[

]

[

]

55.13

[

] %

[

] %

[

]

[

]

62.89

[

] %

[

] %

[

]

[

]

Total Gain After Fees and Expenses

[

]

Total Annual Fees and Expenses Paid

[

]

^(a)	Annual Fees and Expenses are calculated based on the average between the beginning and ending balance for each year. All information is calculated on an annual compounding basis.

^(b)	Reflects deduction of the maximum initial sales charge.

Columbia Virginia Intermediate Municipal Bond Fund—Class B Shares

Maximum Initial Sales Charge 0.00%

Initial Hypothetical Investment Amount
$10,000.00

Assumed Rate of Return 5%

Year

Cumulative Return
Before Fees and
Expenses

Annual Expense
Ratio

Cumulative Return
After Fees and
Expenses

Hypothetical Year-
End Balance After
Fees and Expenses

Annual Fees and
Expenses ^(a)

5.00

[

] %

[

] %

[

]

[

]

10.25

[

] %

[

] %

[

]

[

]

15.76

[

] %

[

] %

[

]

[

]

21.55

[

] %

[

] %

[

]

[

]

27.63

[

] %

[

] %

[

]

[

]

34.01

[

] %

[

] %

[

]

[

]

40.71

[

] %

[

] %

[

]

[

]

47.75

[

] %

[

] %

[

]

[

]

55.13

[

] %

[

] %

[

]

[

]

62.89

[

] %

[

] %

[

]

[

]

Total Gain After Fees and Expenses

[

]

Total Annual Fees and Expenses Paid

[

]

^(a)	Annual Fees and Expenses are calculated based on the average between the beginning and ending balance for each year. All information is calculated on an annual compounding basis.

Columbia Virginia Intermediate Municipal Bond Fund—Class C Shares

Maximum Initial Sales Charge 0.00%

Initial Hypothetical Investment Amount
$10,000.00

Assumed Rate of Return 5%

Year

Cumulative Return
Before Fees and
Expenses

Annual Expense
Ratio

Cumulative Return
After Fees and
Expenses

Hypothetical Year-
End Balance After
Fees and Expenses

Annual Fees and
Expenses ^(a)

5.00

[

] %

[

] %

[

]

[

]

10.25

[

] %

[

] %

[

]

[

]

15.76

[

] %

[

] %

[

]

[

]

21.55

[

] %

[

] %

[

]

[

]

27.63

[

] %

[

] %

[

]

[

]

34.01

[

] %

[

] %

[

]

[

]

40.71

[

] %

[

] %

[

]

[

]

47.75

[

] %

[

] %

[

]

[

]

55.13

[

] %

[

] %

[

]

[

]

62.89

[

] %

[

] %

[

]

[

]

Total Gain After Fees and Expenses

[

]

Total Annual Fees and Expenses Paid

[

]

^(a)	Annual Fees and Expenses are calculated based on the average between the beginning and ending balance for each year. All information is calculated on an annual compounding basis.

LOGO

Columbia Virginia Intermediate Municipal Bond Fund

Class A, Class B and Class C Shares

Prospectus, August 1, 2010

For More Information


By Mail:		Columbia Funds c/o Columbia Management Investment Services Corp. P.O. Box 8081 Boston, MA 02266-8081

By Telephone:		800.345.6611

Online:		www.columbiafunds.com

Annual and Semi-Annual Reports to Shareholders

Shareholder Communications with the Board

Statement of Additional Information

The SAI provides more detailed information about the Fund and its policies. The SAI is legally part of this prospectus (incorporated by reference). A copy has been filed with the SEC.

Information Provided by the SEC

FUNDamentals™ is a trademark of Ameriprise Financial.

The investment company registration number of Columbia Funds Series Trust, of which the Fund is a series, is 811-09645.

One Financial Center, Boston, MA 02111-2621

800.345.6611 www.columbiafunds.com

INT-36/[ ]-0810

LOGO

Prospectus

August 1, 2010

Columbia Funds

Columbia Virginia Intermediate Municipal Bond Fund

Ticker symbol

Class Z Shares NVABX

Table of Contents


Columbia Virginia Intermediate Municipal Bond Fund		3

Investment Objective		3

Fees and Expenses of the Fund		3

Principal Investment Strategies		5

Principal Risks		5

Performance Information		8

Investment Adviser and Portfolio Manager(s)		9

Purchase and Sale of Fund Shares		9

Tax Information		9

Payments to Broker-Dealers and Other Financial Intermediaries		9

Additional Investment Strategies and Policies		10

Management of the Fund		12

Primary Service Providers		12

Other Roles and Relationships of Ameriprise Financial and its Affiliates—Certain Conflicts of Interest		14

Certain Legal Matters		15

About Class Z Shares		16

Description of the Share Class		16

Financial Intermediary Compensation		17

Buying, Selling and Exchanging Shares		18

Share Price Determination		18

Transaction Rules and Policies		19

Opening an Account and Placing Orders		23

Distributions and Taxes		27

Financial Highlights		31

Hypothetical Fees and Expenses		32

Icons Guide

Investment Objective

Fees and Expenses of the Fund

Principal Investment Strategies

Principal Risks

Performance Information

Other Roles and Relationships of Ameriprise Financial and its Affiliates - Certain Conflicts of Interest

Columbia Virginia Intermediate Municipal Bond Fund

Investment Objective

The Fund seeks current income exempt from federal income tax and Virginia individual income tax, consistent with moderate fluctuation of principal.

Fees and Expenses of the Fund

This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.

Shareholder Fees (fees paid directly from your investment)


		Class Z Shares
Maximum sales charge (load) imposed on purchases, as a % of offering price		N/A
Maximum deferred sales charge (load) imposed on redemptions, as a % of the lower of the original purchase price or net asset value		N/A

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)


	Class Z Shares
Management fees	0.55	%
Distribution and/or service (Rule 12b-1) fees	0.00	%
Other expenses	[	]%
Acquired fund fees and expenses	0.01	%
Total annual Fund operating expenses ^(a)	[	]%

^(a)	“Total annual Fund operating expenses” do not match “Net Expenses” in the Financial Highlights section of this prospectus, which does not include, among other things, fees and expenses incurred as a result of investment in shares of certain pooled investment vehicles.)

Example

The following example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds.

The example illustrates the hypothetical expenses that you would incur over the time periods indicated, and assumes that:

•

you invest $10,000 in Class Z shares of the Fund for the periods indicated,

•

your investment has a 5% return each year, and

•

the Fund’s total annual operating expenses remain the same as shown in the table above.

Based on the assumptions listed above, your costs would be:

1 year

3 years

5 years

10 years

Class Z Shares

[

]

[

]

[

]

[

]

Remember this is an example only. Your actual costs may be higher or lower.

Portfolio Turnover

Principal Investment Strategies

Under normal circumstances, the Fund invests at least 80% of its net assets in securities that pay interest exempt from federal income tax (but not necessarily the federal alternative minimum tax) and Virginia individual income tax. These securities are issued by or on behalf of the Commonwealth of Virginia, its political subdivisions, agencies, instrumentalities and authorities, and other qualified issuers.

Principal Risks

•

Interest Rate Risk – Debt securities are subject to interest rate risk. In general, if prevailing interest rates rise, the values of debt securities will tend to fall, and if interest rates fall, the values of debt securities will tend to rise. Changes in the value of a debt security usually will not affect the amount of income the Fund receives from it but may affect the value of the Fund’s shares. Interest rate risk is generally greater for debt securities with longer maturities/durations.

•

Derivatives Risk – Derivatives are financial contracts whose values are, for example, based on (or “derived” from) traditional securities (such as a stock or bond), assets (such as a commodity like gold or a foreign currency), reference rates (such as LIBOR) or market indices (such as the S&P 500 ^® Index). Derivatives involve special risks and may result in losses or may limit the Fund’s potential gain from favorable market movements. Derivative strategies often involve leverage, which may exaggerate a loss, potentially causing the Fund to lose more money than it would have lost had it invested in the underlying security or other asset. The values of derivatives may move in unexpected ways, especially in unusual market conditions, and may result in increased volatility, among other consequences. The use of derivatives may also increase the amount of taxes payable by shareholders holding shares in a taxable account. Other risks arise from the Fund’s potential inability to terminate or to sell derivative positions. A liquid secondary market may not always exist for the Fund’s derivative positions at times when the Fund might wish to terminate or to sell such positions. Over-the-counter instruments (investments not traded on an exchange) may be illiquid, and transactions in derivatives traded in the over-the-counter market are subject to the risk that the other party will not meet its obligations. The use of derivatives also involves the risks of mispricing or improper valuation and that changes in the value of the derivative may not correlate perfectly with the underlying security, asset, reference rate or index. The Fund also may not be able to find a suitable derivative transaction counterparty, and thus may be unable to engage in derivative transactions when it is deemed favorable to do so, or at all. For more information on the risks of derivative investments and strategies, see the Statement of Additional Information.

•

investments decline.

•

Performance Information

Year by Year Total Return (%) as of December 31 Each Year ^*

The bar chart below shows you how the performance of the Fund’s Class Z shares has varied from year to year.

LOGO

*	Year-to-date return as of June 30, 2010: [ ]%

Best and Worst Quarterly Returns During this Period


Best:	[ ] quarter [ ]:	[ ]%
Worst:	[ ] quarter [ ]:	[ ]%

Average Annual Total Return as of December 31, 2009


	1 year		5 years		10 years
Class Z shares returns before taxes	[	]%	[	]%	[	]%
Class Z shares returns after taxes on distributions	[	]%	[	]%	[	]%
Class Z shares returns after taxes on distributions and sale of Fund shares	[	]%	[	]%	[	]%
Barclays Capital 3-15 Year Blend Municipal Bond Index (reflects no deductions for fees, expenses or taxes)	[	]%	[	]%	[	]%

Investment Adviser and Portfolio Manager(s)

Investment Adviser

Columbia Management Investment Advisers, LLC

Portfolio Manager

James D’Arcy, CFA

Manager. Service with the Fund since 2010.

Purchase and Sale of Fund Shares

Tax Information

Payments to Broker-Dealers and Other Financial Intermediaries

Additional Investment Strategies and Policies

Changing the Fund’s Investment Objective and Policies

Investment Guidelines

Holding Other Kinds of Investments

Investing in Money Market Funds

Lending Securities

Portfolio Holdings Disclosure

The Fund’s complete portfolio holdings as of a quarter-end are disclosed approximately 30 calendar days after such quarter-end.

In addition, more current information concerning the Fund’s portfolio holdings as of specified dates also may be disclosed on the Columbia Funds’ website.

Investing Defensively

Mailings to Households

Additional Information on Portfolio Turnover

A mutual fund that replaces, or turns over, more than 100% of its investments in a year is considered to have a high portfolio turnover rate. A high portfolio turnover rate can generate larger distributions of short-term capital gains to shareholders, which for individuals are generally taxable at higher rates than long-term capital gains for U.S. federal income tax purposes. A high portfolio turnover rate can also mean higher brokerage and other transaction costs, which could reduce a fund’s returns. In general, the greater the volume of buying and selling by a fund, the greater the impact that brokerage commissions will have on its returns. The Fund generally buys securities for capital appreciation, investment income or both. However, the Fund may sell securities regardless of how long they’ve been held. You’ll find the Fund’s portfolio turnover rate for its most recent fiscal year in the Fees and Expenses of the Fund – Portfolio Turnover section of this prospectus and portfolio turnover rates for prior fiscal years in the Financial Highlights section of this prospectus.

Management of the Fund

Primary Service Providers

The Adviser

Subadviser(s)

The SEC has issued an order that permits the Adviser, subject to the approval of the Board, to appoint an unaffiliated subadviser or to change the terms of a subadvisory agreement for the Fund without first obtaining shareholder approval. The order permits the Fund to add or to change unaffiliated subadvisers or to change the fees paid to subadvisers from time to time without the expense and delays associated with obtaining shareholder approval of the change. The Adviser and its affiliates may have other relationships, including significant financial relationships, with current or potential subadvisers or their affiliates, which may create certain conflicts of interest. When making recommendations to the Board to appoint or to change a subadviser, or to change the terms of a subadvisory agreement, the Adviser discloses to the Board the nature of any material relationships it has with a subadviser or its affiliates.

At present, the Adviser has not engaged any investment subadviser for the Fund.

Portfolio Manager

James D’Arcy, CFA

Manager. Service with the Fund since 2010.

The Administrator

Annual Administration Fee,

as a % of Average Daily Net Assets


Columbia Virginia Intermediate Municipal Bond Fund		0.15	%

The Distributor

The Transfer Agent

The Transfer Agent is a registered transfer agent and a wholly-owned subsidiary of Ameriprise Financial. The Transfer Agent’s responsibilities include processing purchases, sales and exchanges, calculating and paying distributions, keeping shareholder records, preparing account statements and providing customer service. The Fund pays the Transfer Agent monthly fees on a per-account basis. Fees paid to the Transfer Agent include reimbursements for certain out-of-pocket expenses and sub-transfer agency fees, subject to certain limitations, paid by the Transfer Agent on the Fund’s behalf.

Expense Reimbursement Arrangements

Other Roles and Relationships of Ameriprise Financial and its Affiliates—Certain Conflicts of Interest

Conflicts of interest and limitations that could affect a Columbia Fund may arise from, for example, the following:

•

compensation and other benefits received by the Adviser and other Ameriprise Financial affiliates related to the management/administration of a Columbia Fund and the sale of its shares;

•

separate and potentially divergent management of a Columbia Fund and other funds and accounts advised/managed by the Adviser and other Ameriprise Financial affiliates;

•

regulatory and other investment restrictions on investment activities of the Adviser and other Ameriprise Financial affiliates and accounts advised/managed by them;

•

insurance and other relationships of Ameriprise Financial affiliates with companies and other entities in which a Columbia Fund invests; and

•

regulatory and other restrictions relating to the sharing of information between Ameriprise Financial and its affiliates, including the Adviser, and a Columbia Fund.

Certain Legal Matters

Ameriprise Financial and certain of its affiliates have historically been involved in a number of legal, arbitration and regulatory proceedings, including routine litigation, class actions and governmental actions, concerning matters arising in connection with the conduct of their business activities. Ameriprise Financial believes that the Fund is not currently the subject of, and that neither Ameriprise Financial nor any of its affiliates is the subject of, any pending legal, arbitration or regulatory proceedings that are likely to have a material adverse effect on the Fund or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Fund. Information regarding certain pending and settled legal proceedings may be found in the Fund’s shareholder reports and in the SAI. Additionally, Ameriprise Financial is required to make 10-Q, 10-K and, as necessary, 8-K filings with the SEC on legal and regulatory matters that relate to Ameriprise Financial and its affiliates. Copies of these filings may be obtained by accessing the SEC website at www.sec.gov.

About Class Z Shares

Description of the Share Class

Share Class Features


		Class Z Shares
Eligible Investors and Minimum Initial Investments		Class Z shares are available only to certain eligible investors, which are subject to different minimum initial investment requirements. These minimum initial investment amounts range from $0 to $2,500. See Buying, Selling and Exchanging Shares – Opening an Account and Placing Orders for details.

Investment Limits		none

Conversion Features		none

Front-End Sales Charges		none

Contingent Deferred Sales Charges (CDSCs)		none

Maximum Distribution and Service Fees		none

FUNDamentals ^TM

Selling and/or Servicing Agents

The terms “selling agent” and “servicing agent” refer to the financial intermediary that employs your financial advisor. Selling and/or servicing agents include, for example, brokerage firms, banks, investment advisors, third party administrators and other financial intermediaries, including Ameriprise Financial and its affiliates.

Financial Intermediary Compensation

The Distributor and the Adviser make payments, from their own resources, to certain financial intermediaries, including other Ameriprise Financial affiliates, for marketing/sales support services relating to the Columbia Funds. Such payments are generally based upon one or more of the following factors: average net assets of the Columbia Funds sold by the Distributor attributable to that intermediary, gross sales of the Columbia Funds distributed by the Distributor attributable to that intermediary, reimbursement of ticket charges (fees that an intermediary firm charges its representatives for effecting transactions in Fund shares) or a negotiated lump sum payment. While the financial arrangements may vary for each intermediary, the support payments to any one intermediary are generally between 0.05% and 0.50% on an annual basis for payments based on average net assets of the Fund attributable to the intermediary, and between 0.05% and 0.25% on an annual basis for firms receiving a payment based on gross sales of the Columbia Funds attributable to the intermediary.

These payments for shareholder servicing support vary by financial intermediary but generally are not expected, with certain limited exceptions, to exceed 0.40% of the average aggregate value of the Fund’s shares in any financial intermediary’s program on an annual basis for those classes of shares that pay a service fee pursuant to a plan under Rule 12b-1 under the 1940 Act, and 0.45% of the average aggregate value of the Fund’s shares in any financial intermediary’s program on an annual basis for those classes of shares that do not pay a service fee pursuant to a plan under Rule 12b-1 under the 1940 Act.

Amounts paid by the Distributor and the Adviser and their affiliates are paid out of the Distributor’s and the Adviser’s own resources and do not increase the amount paid by you or the Fund. You can find further details about the payments made by the Distributor and the Adviser and their affiliates and the services provided by financial intermediaries as well as a list of the intermediaries to which the Distributor and the Adviser have agreed to make marketing support payments in the SAI. Your financial intermediary may charge you fees and commissions in addition to those described in this prospectus. You should consult with your financial intermediary and review carefully any disclosure your financial intermediary provides regarding its services and compensation. Depending on the financial arrangement in place at any particular time, a financial intermediary and its financial consultants may have a financial incentive for recommending the Fund or a particular share class over others. See Management of the Fund – Other Roles and Relationships of Ameriprise Financial and its Affiliates – Certain Conflicts of Interest for more information.

Buying, Selling and Exchanging Shares

Share Price Determination

FUNDamentals ^TM

NAV Calculation

Each of the Fund’s share classes calculates its NAV as follows:


		(Value of assets of the share class)
NAV	=	—(Liabilities of the share class)
		Number of outstanding shares of the class

Transaction Rules and Policies

Also remember that the Fund may refuse any order to buy or exchange shares. If this happens, we’ll return any money we’ve received, but no interest will be paid on that money.

Order Processing

FUNDamentals ^TM

Business Days

A business day is any day that the New York Stock Exchange (NYSE) is open. A business day ends at the close of regular trading on the NYSE, usually at 4:00 p.m. Eastern time. If the NYSE closes early, the business day ends as of the time the NYSE closes. On holidays and other days when the NYSE is closed, the Fund’s net asset value is not calculated and the Fund does not accept buy or sell orders. However, the value of the Fund’s assets may still be affected on such days to the extent that the Fund holds foreign securities that trade on days that foreign securities markets are open.

“Good Form”

An order is in “good form” if the Transfer Agent or your selling and/or servicing agent has all of the information and documentation it deems necessary to effect your order. For example, when you sell shares by letter of instruction, “good form” means that your letter has (i) complete instructions and the signatures of all account owners, (ii) a Medallion signature guarantee for amounts equal to or greater than $100,000 and (iii) any other required documents completed and attached. For the documents required for sales by corporations, agents, fiduciaries, surviving joint owners and other legal entities, call 800.345.6611.

Medallion Signature Guarantees

Written Transactions

Telephone Transactions

Telephone orders may not be as secure as written orders. Columbia Funds will take reasonable steps to confirm that telephone instructions are genuine. For example, we require proof of your identification before we will act on instructions received by telephone and may record telephone conversations. However, the Fund and its agents will not be responsible for any losses, costs or expenses resulting from an unauthorized telephone instruction when reasonable steps have been taken to confirm that telephone instructions are

genuine. Telephone orders may be difficult to complete during periods of significant economic or market change or business interruption.

Online Transactions

Once you have an account, contact Columbia Funds at 800.345.6611 for more information on account trading restrictions and the special sign-up procedures required for online transactions. The Transfer Agent has procedures in place to authenticate electronic orders you deliver through the internet. You will be required to accept the terms of an online agreement and to establish and utilize a password in order to access online account services.

You can sell up to an aggregate of $100,000 of shares through the internet in any 30-day period if you qualify for internet orders.

Customer Identification Program

Small Account Policy—Accounts Below $250

Small Account Policy—Minimum Balance Fee

Exceptions to the Above Small Account Policy (Accounts Below $250 and Minimum Balance Fee)

Small Account Policy—Broker/Dealer and Wrap Fee Accounts

Columbia Funds may automatically redeem shares at any time from broker/dealer networked accounts and wrap fee accounts that have account balances of $20 or less or that have less than one share.

Cash Flows

Information Sharing Agreements

As required by Rule 22c-2 under the 1940 Act, the Columbia Funds or certain of their service providers will enter into information sharing agreements with financial intermediaries, including participating life insurance companies and financial intermediaries that sponsor or offer retirement plans through which shares of the Columbia Funds are made available for purchase. Pursuant to Rule 22c-2, financial intermediaries are required, upon request, to: (i) provide shareholder account and transaction information and (ii) execute instructions from the Fund to restrict or prohibit further purchases of Fund shares by shareholders who have been identified by the Fund as having engaged in transactions that violate the Fund’s excessive trading policies and procedures. See Buying, Selling and Exchanging Shares – Excessive Trading Practices for more information.

Excessive Trading Practices

Some financial intermediaries apply their own restrictions or policies to underlying investor accounts, which may be more or less restrictive than those described here. This may impact the Fund’s ability to curtail excessive trading, even where it is identified. For these and other reasons, it is possible that excessive trading may occur despite the Fund’s efforts to detect and prevent it.

Risks of Excessive Trading – Excessive trading creates certain risks to the Fund’s long-term shareholders and may create the following adverse effects:

•

negative impact on the Fund’s performance;

•

potential dilution of the value of the Fund’s shares;

•

losses on the sale of investments resulting from the need to sell securities at less favorable prices;

•

increased taxable gains to the Fund’s remaining shareholders resulting from the need to sell securities to meet sell orders; and

•

increased brokerage and administrative costs.

Opening an Account and Placing Orders

Columbia Funds encourages you to consult with a financial advisor who can help you with your investment decisions and who can help you open an account. Once you have an account, you can buy, sell and exchange shares by contacting your financial advisor who will send your order to the Transfer Agent or your selling and/or servicing agent. As described in Buying, Selling and Exchanging Shares – Transaction Rules and Policies , once you have an account you can also communicate your orders directly to the Transfer Agent by mail, by telephone or online.

Buying Shares

Minimum Initial Investments

There is no minimum initial investment in Class Z shares for the following categories of eligible investors:

•

The minimum initial investment in Class Z shares for the following categories of eligible investors is $1,000:

•

The minimum initial investment in Class Z shares for the following categories of eligible investors is $2,500:

•

Any investor buying shares through a Columbia Management state tuition plan organized under Section 529 of the Internal Revenue Code.

•

Any trustee or director (or family member of a trustee or director) of a fund distributed by the Distributor.

•

Any employee (or family member of an employee) of Bank of America or one of its subsidiaries.

•

Any institutional investor who is a corporation, partnership, trust, foundation, endowment, institution, government

entity, or similar organization, which meets the respective qualifications for an accredited investor, as defined under the Securities Act of 1933.

•

For investors establishing a Systematic Investment Plan, the minimum initial investment is $50.

Minimum Additional Investments

There is no minimum additional investment for Class Z shares.

Systematic Investment Plan

Dividend Diversification

Wire Purchases

You may buy Class Z shares of the Fund by wiring money from your bank account to your Fund account by calling the Transfer Agent at 800.422.3737.

Electronic Funds Transfer

Other Purchase Rules You Should Know

•

Once the Transfer Agent or your selling and/or servicing agent receives your buy order in “good form,” your purchase will be made at the next calculated net asset value per share.

•

You generally buy Class Z shares at net asset value because no front-end sales charge applies to purchases of this share class.

•

Selling and/or servicing agents are responsible for sending your buy orders to the Transfer Agent and ensuring that we receive your money on time.

•

Shares bought are recorded on the books of the Fund. The Fund doesn’t issue certificates.

Selling Shares

When you sell your shares, the Fund is effectively buying them back from you. This is called a redemption.

Wire Redemptions

Electronic Funds Transfer

Systematic Withdrawal Plan

In-Kind Distributions

Other Redemption Rules You Should Know

•

Once the Transfer Agent or your selling and/or servicing agent receives your sell order in “good form,” your shares will be sold at the next calculated net asset value per share.

•

No interest will be paid on uncashed redemption checks.

•

Other restrictions may apply to retirement accounts. For information about these restrictions, contact your retirement plan administrator.

•

Also keep in mind Columbia Funds’ Small Account Policy, which is described above in Buying, Selling and Exchanging Shares – Transaction Rules and Policies .

Exchanging Shares

Systematic Exchanges

The rules described below for making exchanges apply to systematic exchanges.

Other Exchange Rules You Should Know

•

Exchanges are made at net asset value.

•

You can generally make exchanges between like share classes of any Columbia Fund. Some exceptions apply.

•

The rules for buying shares of a Columbia Fund generally apply to exchanges into that Fund.

•

You may make exchanges only into a Columbia Fund that is legally offered and sold in your state of residence.

•

You generally may make an exchange only into a Columbia Fund that is accepting investments.

•

The Fund may change or cancel your right to make an exchange by giving the amount of notice required by regulatory authorities (generally 60 days for a material change or cancellation).

•

Unless your account is part of a tax-advantaged arrangement, an exchange for shares of another fund is a taxable event, and you may recognize a gain or loss for tax purposes.

Distributions and Taxes

Distributions to Shareholders

A mutual fund can make money two ways:

•

It can earn income on its investments. Examples of fund income are interest paid on money market instruments and bonds, and dividends paid on common stocks.

•

FUNDamentals ^TM

Distributions

Declaration and Distribution Schedule


Declarations		daily
Distributions		monthly

The Fund may, however, pay distributions of net investment income more frequently.

If you buy shares of the Fund when it holds securities with unrealized capital gain, you may, in effect, receive part of your purchase price back if and when the Fund sells those

Taxes and Your Investment

•

To the extent distributions are taxable, such distributions generally are taxable to you when paid, whether they are paid in cash or automatically reinvested in additional shares of the Fund.

•

Distributions of the Fund’s net interest income from tax-exempt securities generally are not subject to federal income tax, but may be subject to state and local income and other taxes, as well as federal and state alternative minimum tax. Distributions of the Fund’s net interest income from tax-exempt securities of Virginia and its subdivisions generally also are not subject to Virginia individual income tax.

•

FUNDamentals ^TM

Taxes

Financial Highlights

Columbia Virginia Intermediate Municipal Bond Fund—Class Z Shares


	Year Ended March 31, 2010			Year Ended March 31, 2009			Year Ended March 31, 2008			Year Ended March 31, 2007			Year Ended March 31, 2006 ^(a)
Net Asset Value, Beginning of Period	$	[	]	$	10.65		$	10.73		$	10.67		$	10.86
Income from Investment Operations:
Net investment income ^(b)		[	]		0.40			0.40			0.41			0.44
Net realized and unrealized gain (loss) on investments and futures contracts		[	]		(0.08	)		(0.07	)		0.10			(0.21	)
Total from investment operations		[	]		0.32			0.33			0.51			0.23
Less Distributions to Shareholders:
From net investment income		[	]		(0.40	)		(0.41	)		(0.40	)		(0.41	)
From net realized gains		[	]		—			—	^(c)		(0.05	)		(0.01	)
Total distributions to shareholders		[	]		(0.40	)		(0.41	)		(0.45	)		(0.42	)
Net Asset Value, End of Period	$	[	]	$	10.57		$	10.65		$	10.73		$	10.67
Total return ^(d)(e)		[	]%		3.09	%		3.10	%		4.90	%		2.13	%
Ratios to Average Net Assets/Supplemental Data:
Net expenses before interest expense		[	]%		0.50	% ^(f)		0.50	% ^(f)		0.50	% ^(f)		0.50	% ^(f)
Interest expense		[	]		—			—			—	% ^(g)		—	% ^(g)
Net expenses		[	]%		0.50	% ^(f)		0.50	% ^(f)		0.50	% ^(f)		0.50	% ^(f)
Waiver/Reimbursement		[	]%		0.11	%		0.12	%		0.13	%		0.12	%
Net investment income		[	]%		3.80	% ^(f)		3.76	% ^(f)		3.80	% ^(f)		3.79	% ^(f)
Portfolio turnover rate		[	]%		12	%		12	%		22	%		30	%
Net assets, end of period (000’s)	$	[	]	$	267,576		$	288,262		$	273,728		$	266,292

^(a)	On August 22, 2005, the Fund’s Primary A shares were renamed Class Z shares.

^(b)	Per share data was calculated using the average shares outstanding during the period.

^(c)	Rounds to less than $0.01 per share.

^(d)	Total return at net asset value assuming all distributions reinvested.

^(e)	Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

^(f)	The benefits derived from expense reductions had an impact of less than 0.01%.

^(g)	Rounds to less than 0.01%.

Hypothetical Fees and Expenses

The following supplemental hypothetical investment information provides additional information about the effect of the fees and expenses of the Fund, including investment advisory fees and other Fund costs, on the Fund’s returns over a 10-year period. The chart shows the estimated fees and expenses that would be charged on a hypothetical investment of $10,000 in Class Z shares of the Fund, assuming a 5% return each year, the cumulative return after fees and expenses and the hypothetical year-end balance after fees and expenses. The chart also assumes that all dividends and distributions are reinvested. The annual expense ratio used for the share class, which is the same as that stated in the Annual Fund Operating Expenses table, is presented in the chart and is net of any contractual fee waivers or expense reimbursements for the period of contractual commitment. Your actual costs may be higher or lower.

Columbia Virginia Intermediate Municipal Bond Fund—Class Z Shares

Maximum Initial Sales Charge 0.00%

Initial Hypothetical Investment Amount
$10,000.00

Assumed Rate of Return 5%

Year

Cumulative Return
Before Fees and
Expenses

Annual Expense
Ratio

Cumulative Return
After Fees and
Expenses

Hypothetical Year-
End Balance After
Fees and Expenses

Annual Fees and
Expenses ^(a)

5.00

[

]

[

]

10.25

[

]

[

]

15.76

[

]

[

]

21.55

[

]

[

]

27.63

[

]

[

]

34.01

[

]

[

]

40.71

[

]

[

]

47.75

[

]

[

]

55.13

[

]

[

]

62.89

[

]

[

]

Total Gain After Fees and Expenses

[

]

Total Annual Fees and Expenses Paid

[

]

^(a)	Annual Fees and Expenses are calculated based on the average between the beginning and ending balance for each year. All information is calculated on an annual compounding basis.

LOGO

Columbia Virginia Intermediate Municipal Bond Fund

Class Z Shares

Prospectus, August 1, 2010

For More Information


By Mail:		Columbia Funds c/o Columbia Management Investment Services Corp. P.O. Box 8081 Boston, MA 02266-8081

By Telephone:		800.345.6611

Online:		www.columbiafunds.com

Annual and Semi-Annual Reports to Shareholders

Shareholder Communications with the Board

Statement of Additional Information

The SAI provides more detailed information about the Fund and its policies. The SAI is legally part of this prospectus (incorporated by reference). A copy has been filed with the SEC.

Information Provided by the SEC

FUNDamentals™ is a trademark of Ameriprise Financial.

The investment company registration number of Columbia Funds Series Trust, of which the Fund is a series, is 811-09645.

One Financial Center, Boston, MA 02111-2621

800.345.6611 www.columbiafunds.com

INT-36/[ ]-0810

LOGO

Prospectus

August 1, 2010

Columbia Funds

Columbia California Intermediate Municipal Bond Fund

Ticker symbols

Class A Shares NACMX

Class B Shares N/A

Class C Shares N/A

Table of Contents


Columbia California Intermediate Municipal Bond Fund		3

Investment Objective		3

Fees and Expenses of the Fund		3

Principal Investment Strategies		5

Principal Risks		5

Performance Information		8

Investment Adviser and Portfolio Manager(s)		10

Purchase and Sale of Fund Shares		10

Tax Information		10

Payments to Broker-Dealers and Other Financial Intermediaries		10

Additional Investment Strategies and Policies		11

Management of the Fund		13

Primary Service Providers		13

Other Roles and Relationships of Ameriprise Financial and its Affiliates—Certain Conflicts of Interest		15

Certain Legal Matters		16

Choosing a Share Class		17

Comparison of the Share Classes		17

Sales Charges and Commissions		18

Reductions/Waivers of Sales Charges		22

Distribution and Service Fees		24

Financial Intermediary Compensation		25

Buying, Selling and Exchanging Shares		26

Share Price Determination		26

Transaction Rules and Policies		27

Opening an Account and Placing Orders		31

Distributions and Taxes		35

Financial Highlights		38

Hypothetical Fees and Expenses		41

Icons Guide

Investment Objective

Fees and Expenses of the Fund

Principal Investment Strategies

Principal Risks

Performance Information

Other Roles and Relationships of Ameriprise Financial and its Affiliates - Certain Conflicts of Interest

Columbia California Intermediate Municipal Bond Fund

Investment Objective

The Fund seeks current income exempt from federal income tax and California individual income tax, consistent with moderate fluctuation of principal.

Fees and Expenses of the Fund

This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $50,000 in Class A shares of eligible Columbia Funds. More information about these and other discounts is available from your financial advisor, in the Choosing a Share Class section beginning on page 17 of this prospectus and in the Purchase, Redemption and Pricing of Shares section of the Statement of Additional Information.

Shareholder Fees (fees paid directly from your investment)


	Class A Shares		Class B Shares		Class C Shares
Maximum sales charge (load) imposed on purchases, as a % of offering price	3.25	%	N/A		N/A
Maximum deferred sales charge (load) imposed on redemptions, as a % of the lower of the original purchase price or net asset value	1.00	% ^(a)	3.00	% ^(b)	1.00	% ^(c)

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)


	Class A Shares		Class B Shares		Class C Shares
Management fees	0.55	%	0.55	%	0.55	%
Distribution and/or service (Rule 12b-1) fees	0.25	%	1.00	%	1.00	%
Other expenses	[ ]	%	[ ]	%	[ ]	%
Acquired fund fees and expenses	0.01	%	0.01	%	0.01	%
Total annual Fund operating expenses ^(d)	[ ]	%	[ ]	%	[ ]	%

^(a)	This charge applies to investors who buy $1 million or more of Class A shares and redeem them within one year of purchase, with certain limited exceptions.

^(b)	This charge decreases over time.

^(c)	This charge applies to investors who buy Class C shares and redeem them within one year of purchase, with certain limited exceptions.

^(d)	“Total annual Fund operating expenses” do not match “Net Expenses” in the Financial Highlights section of this prospectus, which does not include, among other things, fees and expenses incurred as a result of investment in shares of certain pooled investment vehicles.

Example

The following example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds.

The example illustrates the hypothetical expenses that you would incur over the time periods indicated, and assumes that:

•

you invest $10,000 in Class A, Class B or Class C shares of the Fund for the periods indicated,

•

your investment has a 5% return each year, and

•

the Fund’s total annual operating expenses remain the same as shown in the table above.

Based on the assumptions listed above, your costs would be:

1 year

3 years

5 years

10 years

Class A Shares

[

]

[

]

[

]

[

]

Class B Shares

Assuming no redemption of shares

[

]

[

]

[

]

[

]

Assuming complete redemption of shares at the end of the period

[

]

[

]

[

]

[

]

Class C Shares

Assuming no redemption of shares

[

]

[

]

[

]

[

]

Assuming complete redemption of shares at the end of the period

[

]

[

]

[

]

[

]

Remember this is an example only. Your actual costs may be higher or lower.

Portfolio Turnover

Principal Investment Strategies

Under normal circumstances, the Fund invests at least 80% of its net assets in securities that pay interest exempt from federal income tax (but not necessarily the federal alternative minimum tax) and California individual income tax. These securities are issued by or on behalf of the State of California, its political subdivisions, agencies, instrumentalities and authorities, and other qualified issuers.

Principal Risks

•

Interest Rate Risk – Debt securities are subject to interest rate risk. In general, if prevailing interest rates rise, the values of debt securities will tend to fall, and if interest rates fall, the values of debt securities will tend to rise. Changes in the value of a debt security usually will not affect the amount of income the Fund receives from it but may affect the value of the Fund’s shares. Interest rate risk is generally greater for debt securities with longer maturities/durations.

•

Performance Information

Year by Year Total Return (%) as of December 31 Each Year ^*

LOGO

*	Year-to-date return as of June 30, 2010: [ ]%

Best and Worst Quarterly Returns During this Period


Best:	[ ] quarter [ ]:	[	]%
Worst:	[ ] quarter [ ]:	[	]%

Average Annual Total Return as of December 31, 2009

The table compares the Fund’s returns for each period with those of the Barclays Capital 3-15 Year Blend Municipal Bond Index, which tracks the performance of municipal bonds issued after December 31, 1990 with remaining maturities between 2 and 17 years and at least $7 million in principal amount outstanding and rated investment grade by at least two rating agencies, and the Barclays Capital California 3-15 Year Blend Municipal Bond Index, which tracks investment grade bonds issued from the state of California and its municipalities. Prior to January 1, 2010, the Barclays Capital 3-15 Year Blend Municipal Bond Index was the Fund’s sole benchmark. The Fund added the Barclays Capital California 3-15 Year Blend Municipal Bond Index as a secondary index effective January 1, 2010 because the Adviser believes that the Barclays Capital California 3-15 Year Blend Municipal Bond Index provides a reasonable view of the available municipal investment opportunities in California and therefore provides an additional useful performance comparison. The Fund’s average annual returns for the one-year, five-year and life-of-fund periods are shown compared to the Barclays Capital 3-15 Year Blend Municipal Bond Index and the Barclays Capital California 3-15 Year Blend Municipal Bond Index.


	1 year		5 years		Life of Fund
Class A shares returns before taxes (September 9, 2002 inception)	[	]%	[	]%	[	]%
Class A shares returns after taxes on distributions	[	]%	[	]%	[	]%
Class A shares returns after taxes on distributions and sale of Fund shares	[	]%	[	]%	[	]%
Class B shares returns before taxes (August 29, 2002 inception)	[	]%	[	]%	[	]%
Class C shares returns before taxes (September 11, 2002 inception)	[	]%	[	]%	[	]%
Barclays Capital 3-15 Year Blend Municipal Bond Index (reflects no deductions for fees, expenses or taxes; returns shown from September 9, 2002)	[	]%	[	]%	[	]%
Barclays Capital California 3-15 Year Blend Municipal Bond Index (reflects no deductions for fees, expenses or taxes; returns shown from August 31, 2002)	[	]%	[	]%	[	]%

Investment Adviser and Portfolio Manager(s)

Investment Adviser

Columbia Management Investment Advisers, LLC

Portfolio Manager

James D’Arcy, CFA

Manager. Service with the Fund since 2010.

Purchase and Sale of Fund Shares

Tax Information

Payments to Broker-Dealers and Other Financial Intermediaries

Additional Investment Strategies and Policies

Changing the Fund’s Investment Objective and Policies

Investment Guidelines

Holding Other Kinds of Investments

Investing in Money Market Funds

Lending Securities

Portfolio Holdings Disclosure

The Fund’s complete portfolio holdings as of a quarter-end are disclosed approximately 30 calendar days after such quarter-end.

In addition, more current information concerning the Fund’s portfolio holdings as of specified dates also may be disclosed on the Columbia Funds’ website.

Investing Defensively

Mailings to Households

Additional Information on Portfolio Turnover

A mutual fund that replaces, or turns over, more than 100% of its investments in a year is considered to have a high portfolio turnover rate. A high portfolio turnover rate can generate larger distributions of short-term capital gains to shareholders, which for individuals are generally taxable at higher rates than long-term capital gains for U.S. federal income tax purposes. A high portfolio turnover rate can also mean higher brokerage and other transaction costs, which could reduce a fund’s returns. In general, the greater the volume of buying and selling by a fund, the greater the impact that brokerage commissions will have on its returns. The Fund generally buys securities for capital appreciation, investment income or both. However, the Fund may sell securities regardless of how long they’ve been held. You’ll find the Fund’s portfolio turnover rate for its most recent fiscal year in the Fees and Expenses of the Fund — Portfolio Turnover section of this prospectus and portfolio turnover rates for prior fiscal years in the Financial Highlights section of this prospectus.

Management of the Fund

Primary Service Providers

The Adviser

Subadviser(s)

The SEC has issued an order that permits the Adviser, subject to the approval of the Board, to appoint an unaffiliated subadviser or to change the terms of a subadvisory agreement for the Fund without first obtaining shareholder approval. The order permits the Fund to add or to change unaffiliated subadvisers or to change the fees paid to subadvisers from time to time without the expense and delays associated with obtaining shareholder approval of the change. The Adviser and its affiliates may have other relationships, including significant financial relationships, with current or potential subadvisers or their affiliates, which may create certain conflicts of interest. When making recommendations to the Board to appoint or to change a subadviser, or to change the terms of a subadvisory agreement, the Adviser discloses to the Board the nature of any material relationships it has with a subadviser or its affiliates.

At present, the Adviser has not engaged any investment subadviser for the Fund.

Portfolio Manager

James D’Arcy, CFA

Manager. Service with the Fund since 2010.

The Administrator

Annual Administration Fee,

as a % of Average Daily Net Assets


Columbia California Intermediate Municipal Bond Fund		0.15	%

The Distributor

The Transfer Agent

The Transfer Agent is a registered transfer agent and a wholly-owned subsidiary of Ameriprise Financial. The Transfer Agent’s responsibilities include processing purchases, sales and exchanges, calculating and paying distributions, keeping shareholder records, preparing account statements and providing customer service. The Fund pays the Transfer Agent monthly fees on a per-account basis. Fees paid to the Transfer Agent include reimbursements for certain out-of-pocket expenses and sub-transfer agency fees, subject to certain limitations, paid by the Transfer Agent on the Fund’s behalf.

Expense Reimbursement Arrangements

Other Roles and Relationships of Ameriprise Financial and its Affiliates—Certain Conflicts of Interest

Conflicts of interest and limitations that could affect a Columbia Fund may arise from, for example, the following:

•

compensation and other benefits received by the Adviser and other Ameriprise Financial affiliates related to the management/administration of a Columbia Fund and the sale of its shares;

•

separate and potentially divergent management of a Columbia Fund and other funds and accounts advised/managed by the Adviser and other Ameriprise Financial affiliates;

•

regulatory and other investment restrictions on investment activities of the Adviser and other Ameriprise Financial affiliates and accounts advised/managed by them;

•

insurance and other relationships of Ameriprise Financial affiliates with companies and other entities in which a Columbia Fund invests; and

•

regulatory and other restrictions relating to the sharing of information between Ameriprise Financial and its affiliates, including the Adviser, and a Columbia Fund.

Certain Legal Matters

Ameriprise Financial and certain of its affiliates have historically been involved in a number of legal, arbitration and regulatory proceedings, including routine litigation, class actions and governmental actions, concerning matters arising in connection with the conduct of their business activities. Ameriprise Financial believes that the Fund is not currently the subject of, and that neither Ameriprise Financial nor any of its affiliates is the subject of, any pending legal, arbitration or regulatory proceedings that are likely to have a material adverse effect on the Fund or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Fund. Information regarding certain pending and settled legal proceedings may be found in the Fund’s shareholder reports and in the SAI. Additionally, Ameriprise Financial is required to make 10-Q, 10-K and, as necessary, 8-K filings with the SEC on legal and regulatory matters that relate to Ameriprise Financial and its affiliates. Copies of these filings may be obtained by accessing the SEC website at www.sec.gov.

Choosing a Share Class

Comparison of the Share Classes

Share Class Features


	Class A Shares	Class B Shares	Class C Shares
Eligible Investors and Minimum Initial Investments ^(a)	Minimum initial investments range from $0 to $2,500; the share class is available to the general public for investment.	The Fund no longer accepts investments from new or existing investors in Class B shares, except through a reinvestment of a dividend or capital gain distribution, or a permitted exchange as described in more detail under Buying, Selling and Exchanging Shares - Opening an Account and Placing Orders - Buying Shares - Class B Shares Closing .	Minimum initial investments range from $0 to $2,500; the share class is available to the general public for investment.

Investment Limits	none	up to $49,999 (based on aggregate account value) ^(b)	up to $999,999

Conversion Features	none	convert to Class A shares eight years after purchase	none

Front-End Sales Charges ^(c)	3.25% maximum, declining to 0.00% on investments of $1 million or more	none	none

Contingent Deferred Sales Charges (CDSCs) ^(c)	none, except a 1.00% CDSC applies to certain investments of between $1 million and $50 million sold within one year of purchase	3.00% maximum, gradually declining to 0.00% after four years	1.00% on investments sold within one year of purchase

Maximum Distribution and Service Fees	0.25% combined distribution and service fee	0.75% distribution fee 0.25% service fee	0.75% distribution fee 0.25% service fee

^(a)	See Buying, Selling and Exchanging Shares – Opening an Account and Placing Orders for more details on the eligible investors and investment minimums of these share classes.

^(b)

^(c)	See Choosing a Share Class – Reductions/Waivers of Sales Charges for information about certain exceptions to these sales charges.

FUNDamentals ^TM

Selling and/or Servicing Agents

The terms “selling agent” and “servicing agent” refer to the financial intermediary that employs your financial advisor. Selling and/or servicing agents include, for example, brokerage firms, banks, investment advisors, third party administrators and other financial intermediaries, including Ameriprise Financial and its affiliates.

Sales Charges and Commissions

Class A Shares—Front-End Sales Charge

FUNDamentals ^TM

Front-End Sales Charge Calculation

The following table presents the front-end sales charge as a percentage of both the offering price and the net amount invested.

•

The offering price per share is the net asset value per share plus any front-end sales charge that applies.

•

The net asset value (or NAV) per share is the price of a share calculated by the Fund every business day.

The dollar amount of the sales charge is the difference between the offering price of the shares you buy (based on the applicable sales charge in the table) and the net asset value of those shares.

The front-end sales charge you’ll pay on Class A shares:

•

depends on the amount you’re investing (generally, the larger the investment, the smaller the percentage sales charge), and

•

is based on the total amount of your purchase and the value of your account.

Class A Shares—Front-End Sales Charge—Breakpoint Schedule


Dollar amount of shares bought ^(a)	Sales charge as a % of the offering price ^(b)		Sales charge as a % of the net amount invested ^(b)		Amount retained by or paid to selling and/or servicing agents as a % of the offering price
$0 – $99,999	3.25	%	3.36	%	3.00	%
$100,000 – $249,999	2.50	%	2.56	%	2.25	%
$250,000 – $499,999	2.00	%	2.04	%	1.75	%
$500,000 – $999,999	1.50	%	1.52	%	1.25	%
$1,000,000 or more	0.00	%	0.00	%	1.00	% ^(c)(d)

^(a)	Purchase amounts and account values are aggregated among all eligible Columbia Fund accounts for the purposes of this table.

^(b)

^(c)

^(d)	For certain group retirement plans, selling and/or servicing agents are eligible to receive a 1.00% commission from the Distributor on all purchases up to $3 million, including those in amounts of less than $1 million that are coded as commission-eligible trades.

Class A Shares—CDSC and Commissions

In some cases, you’ll pay a CDSC if you sell Class A shares that you bought without an initial sales charge.

•

The CDSC on Class A shares:

•

is applied to the net asset value at the time of your purchase or sale, whichever is lower, and

•

will not be applied to any shares you receive through reinvested distributions.

The Distributor may also pay your selling and/or servicing agent a cumulative commission when you buy $1 million or more of Class A shares, according to the following schedule:

Class A Shares—Commission Schedule


Purchase Amount	Commission Level (as a % of net asset value per share)
$1 million – $2,999,999	1.00	%
$3 million – $49,999,999	0.50	%
$50 million or more	0.25	%

FUNDamentals ^TM

Contingent Deferred Sales Charge

Class B and Class C Shares—Sales Charges

You don’t pay a front-end sales charge when you buy Class B or Class C shares, but you may pay a CDSC when you sell Class B or Class C shares.

The CDSC on Class B and Class C shares:

•

is applied to the net asset value at the time of your purchase or sale, whichever is lower,

•

will not be applied to any shares you receive through reinvested distributions, and

•

generally declines each year until there is no sales charge for selling shares.

Class B Shares—CDSC and Commissions

Class B Shares—CDSC Schedule


Number of Years Class B Shares Held		Applicable CDSC
One		3.00%
Two		3.00%
Three		2.00%
Four		1.00%
Five		none
Six		none
Seven		none
Eight		none
Nine		Conversion to Class A Shares

The following rules apply to the conversion of Class B shares to Class A shares:

•

Class B shares are converted on or about the 15th day of the month that they become eligible for conversion.

•

Any shares you received from reinvested distributions on these shares generally will convert to Class A shares at the same time.

•

No sales charge or other charges apply, and conversions are free from U.S. federal income tax.

Class C Shares—CDSC and Commissions

Reductions/Waivers of Sales Charges

Front-End Sales Charge Reductions

FUNDamentals ^TM

Your “Immediate Family” and Account Value Aggregation

Eligible Accounts

The types of accounts that are eligible for the account value aggregation purposes described above are:

•

individual accounts,

•

joint accounts,

•

certain IRA accounts,

•

certain health savings accounts,

•

certain trust accounts, and

•

Uniform Gifts to Minors Act (UGMA)/Uniform Transfers to Minors Act (UTMA) accounts.

Eligible accounts do not include Class R share accounts or accounts holding shares of money market funds that used the Columbia brand before May 1, 2010.

Front-End Sales Charge Waivers

CDSC Waivers

The Fund may change or cancel these terms at any time. Any change or cancellation applies only to future purchases.

For more information about the sales charge reductions and waivers described here, consult the SAI.

Distribution and Service Fees

The table below shows the maximum annual distribution and service fees (as an annual % of average daily net assets) and the combined amount of such fees applicable to each share class:

Distribution and Service (Rule 12b-1) Fees


	Distribution Fee		Service Fee		Combined Total
Class A	—	^(a)	—	^(a)	0.25	% ^(a)
Class B	0.75	%	0.25	%	1.00	%
Class C	0.75	%	0.25	%	1.00	%

^(a)	The Fund’s Class A shares pay a combined distribution and service fee pursuant to the Fund’s combined distribution and shareholder servicing plan for Class A shares.

Financial Intermediary Compensation

The Distributor and the Adviser make payments, from their own resources, to certain financial intermediaries, including other Ameriprise Financial affiliates, for marketing/sales support services relating to the Columbia Funds. Such payments are generally based upon one or more of the following factors: average net assets of the Columbia Funds sold by the Distributor attributable to that intermediary, gross sales of the Columbia Funds distributed by the Distributor attributable to that intermediary, reimbursement of ticket charges (fees that an intermediary firm charges its representatives for effecting transactions in Fund shares) or a negotiated lump sum payment. While the financial arrangements may vary for each intermediary, the support payments to any one intermediary are generally between 0.05% and 0.50% on an annual basis for payments based on average net assets of the Fund attributable to the intermediary, and between 0.05% and 0.25% on an annual basis for firms receiving a payment based on gross sales of the Columbia Funds attributable to the intermediary.

These payments for shareholder servicing support vary by financial intermediary but generally are not expected, with certain limited exceptions, to exceed 0.40% of the average aggregate value of the Fund’s shares in any financial intermediary’s program on an annual basis for those classes of shares that pay a service fee pursuant to a plan under Rule 12b-1 under the 1940 Act, and 0.45% of the average aggregate value of the Fund’s shares in any financial intermediary’s program on an annual basis for those classes of shares that do not pay a service fee pursuant to a plan under Rule 12b-1 under the 1940 Act.

Amounts paid by the Distributor and the Adviser and their affiliates are paid out of the Distributor’s and the Adviser’s own resources and do not increase the amount paid by you or the Fund. You can find further details about the payments made by the Distributor and the Adviser and their affiliates and the services provided by financial intermediaries as well as a list of the intermediaries to which the Distributor and the Adviser have agreed to make marketing support payments in the SAI. Your financial intermediary may charge you fees and commissions in addition to those described in this prospectus. You should consult with your financial intermediary and review carefully any disclosure your financial intermediary provides regarding its services and compensation. Depending on the financial arrangement in place at any particular time, a financial intermediary and its financial consultants may have a financial incentive for recommending the Fund or a particular share class over others. See Management of the Fund – Other Roles and Relationships of Ameriprise Financial and its Affiliates – Certain Conflicts of Interest for more information.

Buying, Selling and Exchanging Shares

Share Price Determination

FUNDamentals ^TM

NAV Calculation

Each of the Fund’s share classes calculates its NAV as follows:


		(Value of assets of the share class)
NAV	=	—(Liabilities of the share class)
		Number of outstanding shares of the class

Transaction Rules and Policies

Also remember that the Fund may refuse any order to buy or exchange shares. If this happens, we’ll return any money we’ve received, but no interest will be paid on that money.

Order Processing

FUNDamentals ^TM

Business Days

A business day is any day that the New York Stock Exchange (NYSE) is open. A business day ends at the close of regular trading on the NYSE, usually at 4:00 p.m. Eastern time. If the NYSE closes early, the business day ends as of the time the NYSE closes. On holidays and other days when the NYSE is closed, the Fund’s net asset value is not calculated and the Fund does not accept buy or sell orders. However, the value of the Fund’s assets may still be affected on such days to the extent that the Fund holds foreign securities that trade on days that foreign securities markets are open.

“Good Form”

An order is in “good form” if the Transfer Agent or your selling and/or servicing agent has all of the information and documentation it deems necessary to effect your order. For example, when you sell shares by letter of instruction, “good form” means that your letter has (i) complete instructions and the signatures of all account owners, (ii) a Medallion signature guarantee for amounts equal to or greater than $100,000 and (iii) any other required documents completed and attached. For the documents required for sales by corporations, agents, fiduciaries, surviving joint owners and other legal entities, call 800.345.6611.

Medallion Signature Guarantees

Written Transactions

Telephone Transactions

Telephone orders may not be as secure as written orders. Columbia Funds will take reasonable steps to confirm that telephone instructions are genuine. For example, we require

Online Transactions

Once you have an account, contact Columbia Funds at 800.345.6611 for more information on account trading restrictions and the special sign-up procedures required for online transactions. The Transfer Agent has procedures in place to authenticate electronic orders you deliver through the internet. You will be required to accept the terms of an online agreement and to establish and utilize a password in order to access online account services.

You can sell up to an aggregate of $100,000 of shares through the internet in any 30-day period if you qualify for internet orders.

Customer Identification Program

Small Account Policy—Accounts Below $250

Small Account Policy—Minimum Balance Fee

market value of Fund shares, sales loads applicable to a particular class of shares, or for other reasons.

Exceptions to the Above Small Account Policy (Accounts Below $250 and Minimum Balance Fee)

Small Account Policy—Broker/Dealer and Wrap Fee Accounts

Columbia Funds may automatically redeem shares at any time from broker/dealer networked accounts and wrap fee accounts that have account balances of $20 or less or that have less than one share.

Cash Flows

Information Sharing Agreements

As required by Rule 22c-2 under the 1940 Act, the Columbia Funds or certain of their service providers will enter into information sharing agreements with financial intermediaries, including participating life insurance companies and financial intermediaries that sponsor or offer retirement plans through which shares of the Columbia Funds are made available for purchase. Pursuant to Rule 22c-2, financial intermediaries are required, upon request, to: (i) provide shareholder account and transaction information and (ii) execute instructions from the Fund to restrict or prohibit further purchases of Fund shares by shareholders who have been identified by the Fund as having engaged in transactions that violate the Fund’s excessive trading policies and procedures. See Buying, Selling and Exchanging Shares – Excessive Trading Practices for more information.

Excessive Trading Practices

Some financial intermediaries apply their own restrictions or policies to underlying investor accounts, which may be more or less restrictive than those described here. This may impact the Fund’s ability to curtail excessive trading, even where it is identified. For these and other reasons, it is possible that excessive trading may occur despite the Fund’s efforts to detect and prevent it.

Risks of Excessive Trading – Excessive trading creates certain risks to the Fund’s long-term shareholders and may create the following adverse effects:

•

negative impact on the Fund’s performance;

•

potential dilution of the value of the Fund’s shares;

•

losses on the sale of investments resulting from the need to sell securities at less favorable prices;

•

increased taxable gains to the Fund’s remaining shareholders resulting from the need to sell securities to meet sell orders; and

•

increased brokerage and administrative costs.

Opening an Account and Placing Orders

Columbia Funds encourages you to consult with a financial advisor who can help you with your investment decisions and who can help you open an account. Once you have an account, you can buy, sell and exchange shares by contacting your financial advisor who will send your order to the Transfer Agent or your selling and/or servicing agent. As described in Buying, Selling and Exchanging Shares – Transaction Rules and Policies , once you have an account you can also communicate your orders directly to the Transfer Agent by mail, by telephone or online.

Buying Shares

Eligible Investors

Class B Shares Closing

Additional Class B shares will be issued only to existing investors in Class B shares and only through the following two types of transactions (Qualifying Transactions):

•

Dividends and/or capital gain distributions may continue to be reinvested in Class B shares of the Fund.

•

Shareholders invested in Class B shares of the Fund may exchange those shares for Class B shares of other Columbia Funds offering such shares.

Any initial purchase orders for the Fund’s Class B shares will be rejected (other than through a Qualifying Transaction that is an exchange transaction).

Unless contrary instructions are received in advance by the Fund, purchase orders (except those submitted by a financial intermediary through the National Securities Clearing Corporation (NSCC) as described in more detail below) for additional Class B shares of the Fund received from existing investors in Class B shares, including orders made through an active systematic investment plan, will be invested in Class A shares of the Fund, without regard to the normal minimum initial investment for Class A shares, but subject to the front-end sales charge that generally applies to Class A shares. See Choosing a Share Class—Class A Shares—Front-end Sales Charge for additional information.

Minimum Initial Investments

Minimum Additional Investments

There is no minimum additional investment for Class A or Class C shares.

Systematic Investment Plan

Dividend Diversification

Generally, you may automatically invest distributions made by another Columbia Fund into the same class of shares (and in some cases certain other classes of shares) of the Fund at no additional sales charge. A sales charge may apply when you invest distributions made by a Columbia Fund that were not assessed a sales charge at the time of your initial purchase. Call Columbia Funds at 800.345.6611 for details. See Buying, Selling and Exchanging Shares—Opening an Account and Placing Orders—Buying Shares—Class B Shares Closing for restrictions applicable to Class B shares.

Wire Purchases

You may buy Class A or Class C shares of the Fund by wiring money from your bank account to your Fund account by calling the Transfer Agent at 800.422.3737.

Electronic Funds Transfer

Other Purchase Rules You Should Know

•

You generally buy Class A shares at the public offering price per share because purchases of Class A shares are generally subject to a front-end sales charge.

•

You buy Class B and Class C shares at net asset value per share because no front-end sales charge applies to purchases of these share classes.

•

Selling and/or servicing agents are responsible for sending your buy orders to the Transfer Agent and ensuring that we receive your money on time.

•

Shares bought are recorded on the books of the Fund. The Fund doesn’t issue certificates.

Selling Shares

When you sell your shares, the Fund is effectively buying them back from you. This is called a redemption.

Wire Redemptions

Electronic Funds Transfer

Systematic Withdrawal Plan

guaranteed.

In-Kind Distributions

Other Redemption Rules You Should Know

•

No interest will be paid on uncashed redemption checks.

•

Other restrictions may apply to retirement accounts. For information about these restrictions, contact your retirement plan administrator.

•

Also keep in mind Columbia Funds’ Small Account Policy, which is described above in Buying, Selling and Exchanging Shares – Transaction Rules and Policies .

Exchanging Shares

Systematic Exchanges

The rules described below for making exchanges apply to systematic exchanges.

Other Exchange Rules You Should Know

•

Exchanges are made at net asset value.

•

You can generally make exchanges between like share classes of any Columbia Fund. Some exceptions apply.

•

A sales charge may apply when you exchange shares of a Columbia Fund that were not assessed a sales charge at the time of your initial purchase.

•

The rules for buying shares of a Columbia Fund generally apply to exchanges into that Fund.

•

You may make exchanges only into a Columbia Fund that is legally offered and sold in your state of residence.

•

You generally may make an exchange only into a Columbia Fund that is accepting investments.

•

The Fund may change or cancel your right to make an exchange by giving the amount of notice required by regulatory authorities (generally 60 days for a material change or cancellation).

•

Unless your account is part of a tax-advantaged arrangement, an exchange for shares of another fund is a taxable event, and you may recognize a gain or loss for tax purposes.

Same-Fund Exchange Privilege for Class Z Shares

Distributions and Taxes

Distributions to Shareholders

A mutual fund can make money two ways:

•

It can earn income on its investments. Examples of fund income are interest paid on money market instruments and bonds, and dividends paid on common stocks.

•

FUNDamentals ^TM

Distributions

Declaration and Distribution Schedule


Declarations		daily
Distributions		monthly

The Fund may, however, pay distributions of net investment income more frequently.

If you buy shares of the Fund when it holds securities with unrealized capital gain, you may, in effect, receive part of your purchase price back if and when the Fund sells those

Taxes and Your Investment

•

To the extent distributions are taxable, such distributions generally are taxable to you when paid, whether they are paid in cash or automatically reinvested in additional shares of the Fund.

•

Distributions of the Fund’s net interest income from tax-exempt securities generally are not subject to federal income tax, but may be subject to state and local income and other taxes, as well as federal and state alternative minimum tax. Distributions of the Fund’s net interest income from tax-exempt securities of California and its subdivisions generally also are not subject to California individual income tax.

•

Revenue Service (IRS) has notified us that the TIN listed on your account is incorrect according to its records; or the IRS informs the Fund that you are otherwise subject to backup withholding.

FUNDamentals ^TM

Taxes

Financial Highlights

Columbia California Intermediate Municipal Bond Fund—Class A Shares


	Year Ended March 31, 2010			Year Ended March 31, 2009			Year Ended March 31, 2008			Year Ended March 31, 2007			Year Ended March 31, 2006 ^(a)
Net Asset Value, Beginning of Period	$	[	]	$	9.50		$	9.63		$	9.49		$	9.63
Income from Investment Operations:
Net investment income ^(b)		[	]		0.31			0.33			0.33			0.31
Net realized and unrealized gain (loss) on investments and futures contracts		[	]		(0.16	)		(0.13	)		0.14			(0.08	)
Total from investment operations		[	]		0.15			0.20			0.47			0.23
Less Distributions to Shareholders:
From net investment income		[	]		(0.31	)		(0.33	)		(0.33	)		(0.32	)
From net realized gains		[	]		—			—			—			(0.05	)
Total distributions to shareholders		[	]		(0.31	)		(0.33	)		(0.33	)		(0.37	)
Net Asset Value, End of Period	$	[	]	$	9.34		$	9.50		$	9.63		$	9.49
Total return ^(c)(d)		[	]%		1.65	%		2.08	%		5.00	%		2.37	%
Ratios to Average Net Assets/Supplemental Data:
Net expenses before interest expense		[	]%		0.75	% ^(e)		0.75	% ^(e)		0.75	% ^(e)		0.75	% ^(e)
Interest expense		[	]		—			—	% ^(f)		—			—	% ^(f)
Net expenses		[	]%		0.75	% ^(e)		0.75	% ^(e)		0.75	% ^(e)		0.75	% ^(e)
Waiver/Reimbursement		[	]%		0.13	%		0.16	%		0.20	%		0.18	%
Net investment income		[	]%		3.33	% ^(e)		3.40	% ^(e)		3.41	% ^(e)		3.30	% ^(e)
Portfolio turnover rate		[	]%		19	%		5	%		13	%		35	%
Net assets, end of period (000’s)	$	[	]	$	18,463		$	13,488		$	9,108		$	7,145

^(a)	On August 22, 2005, the Fund’s Investor A shares were renamed Class A shares.

^(b)	Per share data was calculated using the average shares outstanding during the period.

^(c)	Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge.

^(d)	Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

^(e)	The benefits derived from expense reductions had an impact of less than 0.01%.

^(f)	Rounds to less than 0.01%.

Columbia California Intermediate Municipal Bond Fund—Class B Shares


	Year Ended March 31, 2010			Year Ended March 31, 2009			Year Ended March 31, 2008			Year Ended March 31, 2007			Year Ended March 31, 2006 ^(a)
Net Asset Value, Beginning of Period	$	[	]	$	9.49		$	9.62		$	9.48		$	9.62
Income from Investment Operations:
Net investment income ^(b)		[	]		0.24			0.26			0.26			0.24
Net realized and unrealized gain (loss) on investments and futures contracts		[	]		(0.15	)		(0.14	)		0.14			(0.08	)
Total from investment operations		[	]		0.09			0.12			0.40			0.16
Less Distributions to Shareholders:
From net investment income		[	]		(0.24	)		(0.25	)		(0.26	)		(0.25	)
From net realized gains		[	]		—			—			—			(0.05	)
Total distributions to shareholders		[	]		(0.24	)		(0.25	)		(0.26	)		(0.30	)
Net Asset Value, End of Period	$	[	]	$	9.34		$	9.49		$	9.62		$	9.48
Total return ^(c)(d)		[	]%		1.00	%		1.32	%		4.22	%		1.61	%
Ratios to Average Net Assets/Supplemental Data:
Net expenses before interest expense		[	]%		1.50	% ^(e)		1.50	% ^(e)		1.50	% ^(e)		1.50	% ^(e)
Interest expense		[	]		—			—	% ^(f)		—			—	% ^(f)
Net expenses		[	]%		1.50	% ^(e)		1.50	% ^(e)		1.50	% ^(e)		1.50	% ^(e)
Waiver/Reimbursement		[	]%		0.13	%		0.16	%		0.20	%		0.18	%
Net investment income		[	]%		2.58	% ^(e)		2.69	% ^(e)		2.67	% ^(e)		2.55	% ^(e)
Portfolio turnover rate		[	]%		19	%		5	%		13	%		35	%
Net assets, end of period (000’s)	$	[	]	$	348		$	475		$	874		$	1,258

^(a)	On August 22, 2005, the Fund’s Investor B shares were renamed Class B shares.

^(b)	Per share data was calculated using the average shares outstanding during the period.

^(c)	Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge.

^(d)	Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

^(e)	The benefits derived from expense reductions had an impact of less than 0.01%.

^(f)	Rounds to less than 0.01%.

Columbia California Intermediate Municipal Bond Fund—Class C Shares


	Year Ended March 31, 2010			Year Ended March 31, 2009			Year Ended March 31, 2008			Year Ended March 31, 2007			Year Ended March 31, 2006 ^(a)
Net Asset Value, Beginning of Period	$	[	]	$	9.50		$	9.63		$	9.49		$	9.63
Income from Investment Operations:
Net investment income ^(b)		[	]		0.24			0.26			0.26			0.25
Net realized and unrealized gain (loss) on investments and futures contracts		[	]		(0.15	)		(0.14	)		0.14			(0.09	)
Total from investment operations		[	]		0.09			0.12			0.40			0.16
Less Distributions to Shareholders:
From net investment income		[	]		(0.24	)		(0.25	)		(0.26	)		(0.25	)
From net realized gains		[	]		—			—			—			(0.05	)
Total distributions to shareholders		[	]		(0.24	)		(0.25	)		(0.26	)		(0.30	)
Net Asset Value, End of Period	$	[	]	$	9.35		$	9.50		$	9.63		$	9.49
Total return ^(c)(d)		[	]%		1.00	%		1.31	%		4.22	%		1.61	%
Ratios to Average Net Assets/Supplemental Data:
Net expenses before interest expense		[	]%		1.50	% ^(e)		1.50	% ^(e)		1.50	% ^(e)		1.50	% ^(e)
Interest expense		[	]		—			—	% ^(f)		—			—	% ^(f)
Net expenses		[	]%		1.50	% ^(e)		1.50	% ^(e)		1.50	% ^(e)		1.50	% ^(e)
Waiver/Reimbursement		[	]%		0.13	%		0.16	%		0.20	%		0.18	%
Net investment income		[	]%		2.58	% ^(e)		2.67	% ^(e)		2.67	% ^(e)		2.55	% ^(e)
Portfolio turnover rate		[	]%		19	%		5	%		13	%		35	%
Net assets, end of period (000’s)	$	[	]	$	1,061		$	1,263		$	1,274		$	1,339

^(a)	On August 22, 2005, the Fund’s Investor C shares were renamed Class C shares.

^(b)	Per share data was calculated using the average shares outstanding during the period.

^(c)	Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge.

^(d)	Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

^(e)	The benefits derived from expense reductions had an impact of less than 0.01%.

^(f)	Rounds to less than 0.01%.

Hypothetical Fees and Expenses

Columbia California Intermediate Municipal Bond Fund—Class A Shares

Maximum Initial Sales Charge 3.25%

Initial Hypothetical Investment Amount
$10,000.00

Assumed Rate of Return 5%

Year

Cumulative Return
Before Fees and
Expenses

Annual Expense
Ratio

Cumulative Return
After Fees and
Expenses

Hypothetical Year-
End Balance After
Fees and Expenses

Annual Fees and
Expenses ^(a)

5.00

[

]% ^(b)

[

]

[

]

10.25

[

]

[

]

15.76

[

]

[

]

21.55

[

]

[

]

27.63

[

]

[

]

34.01

[

]

[

]

40.71

[

]

[

]

47.75

[

]

[

]

55.13

[

]

[

]

62.89

[

]

[

]

Total Gain After Fees and Expenses

[

]

Total Annual Fees and Expenses Paid

[

]

^(a)	Annual Fees and Expenses are calculated based on the average between the beginning and ending balance for each year. All information is calculated on an annual compounding basis.

^(b)	Reflects deduction of the maximum initial sales charge.

Columbia California Intermediate Municipal Bond Fund—Class B Shares

Maximum Initial Sales Charge 0.00%

Initial Hypothetical Investment
Amount $10,000.00

Assumed Rate of Return 5%

Year

Cumulative Return
Before Fees and
Expenses

Annual Expense
Ratio

Cumulative Return
After Fees and
Expenses

Hypothetical Year-
End Balance After
Fees and Expenses

Annual Fees and
Expenses ^(a)

5.00

[

]

[

]

10.25

[

]

[

]

15.76

[

]

[

]

21.55

[

]

[

]

27.63

[

]

[

]

34.01

[

]

[

]

40.71

[

]

[

]

47.75

[

]

[

]

55.13

[

]

[

]

62.89

[

]

[

]

Total Gain After Fees and Expenses

[

]

Total Annual Fees and Expenses Paid

[

]

(a)	Annual Fees and Expenses are calculated based on the average between the beginning and ending balance for each year. All information is calculated on an annual compounding basis.

Columbia California Intermediate Municipal Bond Fund—Class C Shares

Maximum Initial Sales Charge 0.00%

Initial Hypothetical Investment Amount
$10,000.00

Assumed Rate of Return 5%

Year

Cumulative Return
Before Fees and
Expenses

Annual Expense
Ratio

Cumulative Return
After Fees and
Expenses

Hypothetical Year-
End Balance After
Fees and Expenses

Annual Fees and
Expenses ^(a)

5.00

[

]

[

]

10.25

[

]

[

]

15.76

[

]

[

]

21.55

[

]

[

]

27.63

[

]

[

]

34.01

[

]

[

]

40.71

[

]

[

]

47.75

[

]

[

]

55.13

[

]

[

]

62.89

[

]

[

]

Total Gain After Fees and Expenses

[

]

Total Annual Fees and Expenses Paid

[

]

^(a)	Annual Fees and Expenses are calculated based on the average between the beginning and ending balance for each year. All information is calculated on an annual compounding basis.

LOGO

Columbia California Intermediate Municipal Bond Fund

Class A, Class B and Class C Shares

Prospectus, August 1, 2010

For More Information


By Mail:		Columbia Funds c/o Columbia Management Investment Services Corp. P.O. Box 8081 Boston, MA 02266-8081

By Telephone:		800.345.6611

Online:		www.columbiafunds.com

Annual and Semi-Annual Reports to Shareholders

Shareholder Communications with the Board

Statement of Additional Information

The SAI provides more detailed information about the Fund and its policies. The SAI is legally part of this prospectus (incorporated by reference). A copy has been filed with the SEC.

Information Provided by the SEC

FUNDamentals™ is a trademark of Ameriprise Financial.

The investment company registration number of Columbia Funds Series Trust, of which the Fund is a series, is 811-09645.

One Financial Center, Boston, MA 02111-2621

800.345.6611 www.columbiafunds.com

INT-36/[ ]-0810

LOGO

Prospectus

August 1, 2010

Columbia Funds

Columbia California Intermediate Municipal Bond Fund

Ticker symbol

Class Z Shares NCMAX

Table of Contents


Columbia California Intermediate Municipal Bond Fund		3

Investment Objective		3

Fees and Expenses of the Fund		3

Principal Investment Strategies		5

Principal Risks		5

Performance Information		8

Investment Adviser and Portfolio Manager(s)		10

Purchase and Sale of Fund Shares		10

Tax Information		10

Payments to Broker-Dealers and Other Financial Intermediaries		10

Additional Investment Strategies and Policies		11

Management of the Fund		13

Primary Service Providers		13

Other Roles and Relationships of Ameriprise Financial and its Affiliates—Certain Conflicts of Interest		15

Certain Legal Matters		16

About Class Z Shares		17

Description of the Share Class		17

Financial Intermediary Compensation		18

Buying, Selling and Exchanging Shares		19

Share Price Determination		19

Transaction Rules and Policies		20

Opening an Account and Placing Orders		24

Distributions and Taxes		28

Financial Highlights		31

Hypothetical Fees and Expenses		32

Icons Guide


		Investment Objective

		Fees and Expenses of the Fund

		Principal Investment Strategies

		Principal Risks

		Performance Information

		Other Roles and Relationships of Ameriprise Financial and its Affiliates - Certain Conflicts of Interest

Columbia California Intermediate Municipal Bond Fund

Investment Objective

The Fund seeks current income exempt from federal income tax and California individual income tax, consistent with moderate fluctuation of principal.

Fees and Expenses of the Fund

This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.

Shareholder Fees (fees paid directly from your investment)


		Class Z Shares
Maximum sales charge (load) imposed on purchases, as a % of offering price		N/A
Maximum deferred sales charge (load) imposed on redemptions, as a % of the lower of the original purchase price or net asset value		N/A

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)


	Class Z Shares
Management fees	0.55	%
Distribution and/or service (Rule 12b-1) fees	0.00	%
Other expenses	[	]%
Acquired fund fees and expenses	0.01	%
Total annual Fund operating expenses (a)	[	]%

(a)	“Total annual Fund operating expenses” do not match “Net Expenses” in the Financial Highlights section of this prospectus, which does not include, among other things, fees and expenses incurred as a result of investment in shares of certain pooled investment vehicles.

Example

The following example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds.

The example illustrates the hypothetical expenses that you would incur over the time periods indicated, and assumes that:

•

you invest $10,000 in Class Z shares of the Fund for the periods indicated,

•

your investment has a 5% return each year, and

•

the Fund’s total annual operating expenses remain the same as shown in the table above.

Based on the assumptions listed above, your costs would be:

1 year

3 years

5 years

10 years

Class Z Shares

[

]

[

]

[

]

[

]

Remember this is an example only. Your actual costs may be higher or lower.

Portfolio Turnover

Principal Investment Strategies

Under normal circumstances, the Fund invests at least 80% of its net assets in securities that pay interest exempt from federal income tax (but not necessarily the federal alternative minimum tax) and California individual income tax. These securities are issued by or on behalf of the State of California, its political subdivisions, agencies, instrumentalities and authorities, and other qualified issuers.

Principal Risks

•

Interest Rate Risk – Debt securities are subject to interest rate risk. In general, if prevailing interest rates rise, the values of debt securities will tend to fall, and if interest rates fall, the values of debt securities will tend to rise. Changes in the value of a debt security usually will not affect the amount of income the Fund receives from it but may affect the value of the Fund’s shares. Interest rate risk is generally greater for debt securities with longer maturities/durations.

•

Performance Information

Year by Year Total Return (%) as of December 31 Each Year*

The bar chart below shows you how the performance of the Fund’s Class Z shares has varied from year to year.

LOGO

*	Year-to-date return as of June 30, 2010: [ ]%

Best and Worst Quarterly Returns During this Period


Best:	[ ] quarter [ ]:	[ ]%
Worst:	[ ] quarter [ ]:	[ ]%

Average Annual Total Return as of December 31, 2009


	1 year		5 years		Life of Fund
Class Z shares returns before taxes (August 19, 2002 inception)	[	]%	[	]%	[	]%
Class Z shares returns after taxes on distributions	[	]%	[	]%	[	]%
Class Z shares returns after taxes on distributions and sale of Fund shares	[	]%	[	]%	[	]%
Barclays Capital 3-15 Year Blend Municipal Bond Index (reflects no deductions for fees, expenses or taxes; returns shown from August 19, 2002)	[	]%	[	]%	[	]%
Barclays Capital California 3-15 Year Blend Municipal Bond Index (reflects no deductions for fees, expenses or taxes; returns shown from August 31, 2002)	[	]%	[	]%	[	]%

Investment Adviser and Portfolio Manager(s)

Investment Adviser

Columbia Management Investment Advisers, LLC

Portfolio Manager

James D’Arcy, CFA Manager. Service with the Fund since 2010.

Purchase and Sale of Fund Shares

Tax Information

Payments to Broker-Dealers and Other Financial Intermediaries

Additional Investment Strategies and Policies

Changing the Fund’s Investment Objective and Policies

Investment Guidelines

Holding Other Kinds of Investments

Investing in Money Market Funds

Lending Securities

Portfolio Holdings Disclosure

The Fund’s complete portfolio holdings as of a quarter-end are disclosed approximately 30 calendar days after such quarter-end.

In addition, more current information concerning the Fund’s portfolio holdings as of specified dates also may be disclosed on the Columbia Funds’ website.

Investing Defensively

The Fund may from time to time take temporary defensive investment positions that are inconsistent with the Fund’s

Mailings to Households

Additional Information on Portfolio Turnover

A mutual fund that replaces, or turns over, more than 100% of its investments in a year is considered to have a high portfolio turnover rate. A high portfolio turnover rate can generate larger distributions of short-term capital gains to shareholders, which for individuals are generally taxable at higher rates than long-term capital gains for U.S. federal income tax purposes. A high portfolio turnover rate can also mean higher brokerage and other transaction costs, which could reduce a fund’s returns. In general, the greater the volume of buying and selling by a fund, the greater the impact that brokerage commissions will have on its returns. The Fund generally buys securities for capital appreciation, investment income or both. However, the Fund may sell securities regardless of how long they’ve been held. You’ll find the Fund’s portfolio turnover rate for its most recent fiscal year in the Fees and Expenses of the Fund — Portfolio Turnover section of this prospectus and portfolio turnover rates for prior fiscal years in the Financial Highlights section of this prospectus.

Management of the Fund

Primary Service Providers

The Adviser

Subadviser(s)

The SEC has issued an order that permits the Adviser, subject to the approval of the Board, to appoint an unaffiliated subadviser or to change the terms of a subadvisory agreement for the Fund without first obtaining shareholder approval. The order permits the Fund to add or to change unaffiliated subadvisers or to change the fees paid to subadvisers from time to time without the expense and delays associated with obtaining shareholder approval of the change. The Adviser and its affiliates may have other relationships, including significant financial relationships, with current or potential subadvisers or their affiliates, which may create certain conflicts of interest. When making recommendations to the Board to appoint or to change a subadviser, or to change the terms of a subadvisory agreement, the Adviser discloses to the Board the nature of any material relationships it has with a subadviser or its affiliates.

At present, the Adviser has not engaged any investment subadviser for the Fund.

Portfolio Manager

James D’Arcy, CFA

Manager. Service with the Fund since 2010.

The Administrator

Annual Administration Fee,

as a % of Average Daily Net Assets


Columbia California Intermediate Municipal Bond Fund		0.15	%

The Distributor

The Transfer Agent

The Transfer Agent is a registered transfer agent and a wholly-owned subsidiary of Ameriprise Financial. The Transfer Agent’s responsibilities include processing purchases, sales and exchanges, calculating and paying distributions, keeping shareholder records, preparing account statements and providing customer service. The Fund pays the Transfer Agent monthly fees on a per-account basis. Fees paid to the Transfer Agent include reimbursements for certain out-of-pocket expenses and sub-transfer agency fees, subject to certain limitations, paid by the Transfer Agent on the Fund’s behalf.

Expense Reimbursement Arrangements

Other Roles and Relationships of Ameriprise Financial and its Affiliates—Certain Conflicts of Interest

Conflicts of interest and limitations that could affect a Columbia Fund may arise from, for example, the following:

•

compensation and other benefits received by the Adviser and other Ameriprise Financial affiliates related to the management/administration of a Columbia Fund and the sale of its shares;

•

separate and potentially divergent management of a Columbia Fund and other funds and accounts advised/managed by the Adviser and other Ameriprise Financial affiliates;

•

regulatory and other investment restrictions on investment activities of the Adviser and other Ameriprise Financial affiliates and accounts advised/managed by them;

•

insurance and other relationships of Ameriprise Financial affiliates with companies and other entities in which a Columbia Fund invests; and

•

regulatory and other restrictions relating to the sharing of information between Ameriprise Financial and its affiliates, including the Adviser, and a Columbia Fund.

Additional information about Ameriprise Financial and the types of conflicts of interest and other matters referenced above is set forth in the “Investment Advisory and Other Services—Other Roles and Relationships of Ameriprise Financial and its Affiliates—Certain Conflicts of Interest” section of the SAI, which is identified by the LOGO icon. Investors in the Columbia Funds should carefully review these disclosures and consult with their financial advisor if they have any questions.

Certain Legal Matters

Ameriprise Financial and certain of its affiliates have historically been involved in a number of legal, arbitration and regulatory proceedings, including routine litigation, class actions and governmental actions, concerning matters arising in connection with the conduct of their business activities. Ameriprise Financial believes that the Fund is not currently the subject of, and that neither Ameriprise Financial nor any of its affiliates is the subject of, any pending legal, arbitration or regulatory proceedings that are likely to have a material adverse effect on the Fund or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Fund. Information regarding certain pending and settled legal proceedings may be found in the Fund’s shareholder reports and in the SAI. Additionally, Ameriprise Financial is required to make 10-Q, 10-K and, as necessary, 8-K filings with the SEC on legal and regulatory matters that relate to Ameriprise Financial and its affiliates. Copies of these filings may be obtained by accessing the SEC website at www.sec.gov.

About Class Z Shares

Description of the Share Class

Share Class Features


		Class Z Shares
Eligible Investors and Minimum Initial Investments		Class Z shares are available only to certain eligible investors, which are subject to different minimum initial investment requirements. These minimum initial investment amounts range from $0 to $2,500. See Buying, Selling and Exchanging Shares – Opening an Account and Placing Orders for details.

Investment Limits		none

Conversion Features		none

Front-End Sales Charges		none

Contingent Deferred Sales Charges (CDSCs)		none

Maximum Distribution and Service Fees		none

FUNDamentals ^TM

Selling and/or Servicing Agents

The terms “selling agent” and “servicing agent” refer to the financial intermediary that employs your financial advisor. Selling and/or servicing agents include, for example, brokerage firms, banks, investment advisors, third party administrators and other financial intermediaries, including Ameriprise Financial and its affiliates.

Financial Intermediary Compensation

The Distributor and the Adviser make payments, from their own resources, to certain financial intermediaries, including other Ameriprise Financial affiliates, for marketing/sales support services relating to the Columbia Funds. Such payments are generally based upon one or more of the following factors: average net assets of the Columbia Funds sold by the Distributor attributable to that intermediary, gross sales of the Columbia Funds distributed by the Distributor attributable to that intermediary, reimbursement of ticket charges (fees that an intermediary firm charges its representatives for effecting transactions in Fund shares) or a negotiated lump sum payment. While the financial arrangements may vary for each intermediary, the support payments to any one intermediary are generally between 0.05% and 0.50% on an annual basis for payments based on average net assets of the Fund attributable to the intermediary, and between 0.05% and 0.25% on an annual basis for firms receiving a payment based on gross sales of the Columbia Funds attributable to the intermediary.

These payments for shareholder servicing support vary by financial intermediary but generally are not expected, with certain limited exceptions, to exceed 0.40% of the average aggregate value of the Fund’s shares in any financial intermediary’s program on an annual basis for those classes of shares that pay a service fee pursuant to a plan under Rule 12b-1 under the 1940 Act, and 0.45% of the average aggregate value of the Fund’s shares in any financial intermediary’s program on an annual basis for those classes of shares that do not pay a service fee pursuant to a plan under Rule 12b-1 under the 1940 Act.

Amounts paid by the Distributor and the Adviser and their affiliates are paid out of the Distributor’s and the Adviser’s own resources and do not increase the amount paid by you or the Fund. You can find further details about the payments made by the Distributor and the Adviser and their affiliates and the services provided by financial intermediaries as well as a list of the intermediaries to which the Distributor and the Adviser have agreed to make marketing support payments in the SAI. Your financial intermediary may charge you fees and commissions in addition to those described in this prospectus. You should consult with your financial intermediary and review carefully any disclosure your financial intermediary provides regarding its services and compensation. Depending on the financial arrangement in place at any particular time, a financial intermediary and its financial consultants may have a financial incentive for recommending the Fund or a particular share class over others. See Management of the Fund – Other Roles and Relationships of Ameriprise Financial and its Affiliates – Certain Conflicts of Interest for more information.

Buying, Selling and Exchanging Shares

Share Price Determination

FUNDamentals ^TM

NAV Calculation

Each of the Fund’s share classes calculates its NAV as follows:

Transaction Rules and Policies

Also remember that the Fund may refuse any order to buy or exchange shares. If this happens, we’ll return any money we’ve received, but no interest will be paid on that money.

Order Processing

FUNDamentals ^TM

Business Days

A business day is any day that the New York Stock Exchange (NYSE) is open. A business day ends at the close of regular trading on the NYSE, usually at 4:00 p.m. Eastern time. If the NYSE closes early, the business day ends as of the time the NYSE closes. On holidays and other days when the NYSE is closed, the Fund’s net asset value is not calculated and the Fund does not accept buy or sell orders. However, the value of the Fund’s assets may still be affected on such days to the extent that the Fund holds foreign securities that trade on days that foreign securities markets are open.

“Good Form”

An order is in “good form” if the Transfer Agent or your selling and/or servicing agent has all of the information and documentation it deems necessary to effect your order. For example, when you sell shares by letter of instruction, “good form” means that your letter has (i) complete instructions and the signatures of all account owners, (ii) a Medallion signature guarantee for amounts equal to or greater than $100,000 and (iii) any other required documents completed and attached. For the documents required for sales by corporations, agents, fiduciaries, surviving joint owners and other legal entities, call 800.345.6611.

Medallion Signature Guarantees

Written Transactions

Telephone Transactions

Telephone orders may not be as secure as written orders. Columbia Funds will take reasonable steps to confirm that telephone instructions are genuine. For example, we require

Online Transactions

Once you have an account, contact Columbia Funds at 800.345.6611 for more information on account trading restrictions and the special sign-up procedures required for online transactions. The Transfer Agent has procedures in place to authenticate electronic orders you deliver through the internet. You will be required to accept the terms of an online agreement and to establish and utilize a password in order to access online account services.

You can sell up to an aggregate of $100,000 of shares through the internet in any 30-day period if you qualify for internet orders.

Customer Identification Program

Small Account Policy—Accounts Below $250

Small Account Policy—Minimum Balance Fee

market value of Fund shares, sales loads applicable to a particular class of shares, or for other reasons.

Exceptions to the Above Small Account Policy (Accounts Below $250 and Minimum Balance Fee)

Small Account Policy—Broker/Dealer and Wrap Fee Accounts

Columbia Funds may automatically redeem shares at any time from broker/dealer networked accounts and wrap fee accounts that have account balances of $20 or less or that have less than one share.

Cash Flows

Information Sharing Agreements

As required by Rule 22c-2 under the 1940 Act, the Columbia Funds or certain of their service providers will enter into information sharing agreements with financial intermediaries, including participating life insurance companies and financial intermediaries that sponsor or offer retirement plans through which shares of the Columbia Funds are made available for purchase. Pursuant to Rule 22c-2, financial intermediaries are required, upon request, to: (i) provide shareholder account and transaction information and (ii) execute instructions from the Fund to restrict or prohibit further purchases of Fund shares by shareholders who have been identified by the Fund as having engaged in transactions that violate the Fund’s excessive trading policies and procedures. See Buying, Selling and Exchanging Shares – Excessive Trading Practices for more information.

Excessive Trading Practices

Some financial intermediaries apply their own restrictions or policies to underlying investor accounts, which may be more or less restrictive than those described here. This may impact the Fund’s ability to curtail excessive trading, even where it is identified. For these and other reasons, it is possible that excessive trading may occur despite the Fund’s efforts to detect and prevent it.

Risks of Excessive Trading – Excessive trading creates certain risks to the Fund’s long-term shareholders and may create the following adverse effects:

•

negative impact on the Fund’s performance;

•

potential dilution of the value of the Fund’s shares;

•

losses on the sale of investments resulting from the need to sell securities at less favorable prices;

•

increased taxable gains to the Fund’s remaining shareholders resulting from the need to sell securities to meet sell orders; and

•

increased brokerage and administrative costs.

Opening an Account and Placing Orders

Columbia Funds encourages you to consult with a financial advisor who can help you with your investment decisions and who can help you open an account. Once you have an account, you can buy, sell and exchange shares by contacting your financial advisor who will send your order to the Transfer Agent or your selling and/or servicing agent. As described in Buying, Selling and Exchanging Shares – Transaction Rules and Policies , once you have an account you can also communicate your orders directly to the Transfer Agent by mail, by telephone or online.

Buying Shares

Minimum Initial Investments

There is no minimum initial investment in Class Z shares for the following categories of eligible investors:

•

The minimum initial investment in Class Z shares for the following categories of eligible investors is $1,000:

•

The minimum initial investment in Class Z shares for the following categories of eligible investors is $2,500:

•

Any investor buying shares through a Columbia Management state tuition plan organized under Section 529 of the Internal Revenue Code.

•

Any trustee or director (or family member of a trustee or director) of a fund distributed by the Distributor.

•

Any employee (or family member of an employee) of Bank of America or one of its subsidiaries.

•

Any institutional investor who is a corporation, partnership, trust, foundation, endowment, institution, government

entity, or similar organization, which meets the respective qualifications for an accredited investor, as defined under the Securities Act of 1933.

•

For investors establishing a Systematic Investment Plan, the minimum initial investment is $50.

Minimum Additional Investments

There is no minimum additional investment for Class Z shares.

Systematic Investment Plan

Dividend Diversification

Wire Purchases

You may buy Class Z shares of the Fund by wiring money from your bank account to your Fund account by calling the Transfer Agent at 800.422.3737.

Electronic Funds Transfer

Other Purchase Rules You Should Know

•

Once the Transfer Agent or your selling and/or servicing agent receives your buy order in “good form,” your purchase will be made at the next calculated net asset value per share.

•

You generally buy Class Z shares at net asset value because no front-end sales charge applies to purchases of this share class.

•

Selling and/or servicing agents are responsible for sending your buy orders to the Transfer Agent and ensuring that we receive your money on time.

•

Shares bought are recorded on the books of the Fund. The Fund doesn’t issue certificates.

Selling Shares

When you sell your shares, the Fund is effectively buying them back from you. This is called a redemption.

Wire Redemptions

Electronic Funds Transfer

Systematic Withdrawal Plan

In-Kind Distributions

Other Redemption Rules You Should Know

•

Once the Transfer Agent or your selling and/or servicing agent receives your sell order in “good form,” your shares will be sold at the next calculated net asset value per share.

•

No interest will be paid on uncashed redemption checks.

•

Other restrictions may apply to retirement accounts. For information about these restrictions, contact your retirement plan administrator.

•

Also keep in mind Columbia Funds’ Small Account Policy, which is described above in Buying, Selling and Exchanging Shares – Transaction Rules and Policies .

Exchanging Shares

Systematic Exchanges

The rules described below for making exchanges apply to systematic exchanges.

Other Exchange Rules You Should Know

•

Exchanges are made at net asset value.

•

You can generally make exchanges between like share classes of any Columbia Fund. Some exceptions apply.

•

The rules for buying shares of a Columbia Fund generally apply to exchanges into that Fund.

•

You may make exchanges only into a Columbia Fund that is legally offered and sold in your state of residence.

•

You generally may make an exchange only into a Columbia Fund that is accepting investments.

•

The Fund may change or cancel your right to make an exchange by giving the amount of notice required by regulatory authorities (generally 60 days for a material change or cancellation).

•

Unless your account is part of a tax-advantaged arrangement, an exchange for shares of another fund is a taxable event, and you may recognize a gain or loss for tax purposes.

Distributions and Taxes

Distributions to Shareholders

A mutual fund can make money two ways:

•

It can earn income on its investments. Examples of fund income are interest paid on money market instruments and bonds, and dividends paid on common stocks.

•

FUNDamentals ^TM

Distributions

Declaration and Distribution Schedule


Declarations		daily
Distributions		monthly

The Fund may, however, pay distributions of net investment income more frequently.

If you buy shares of the Fund when it holds securities with unrealized capital gain, you may, in effect, receive part of your purchase price back if and when the Fund sells those

Taxes and Your Investment

•

To the extent distributions are taxable, such distributions generally are taxable to you when paid, whether they are paid in cash or automatically reinvested in additional shares of the Fund.

•

Distributions of the Fund’s net interest income from tax-exempt securities generally are not subject to federal income tax, but may be subject to state and local income and other taxes, as well as federal and state alternative minimum tax. Distributions of the Fund’s net interest income from tax-exempt securities of California and its subdivisions generally also are not subject to California individual income tax.

•

Revenue Service (IRS) has notified us that the TIN listed on your account is incorrect according to its records; or the IRS informs the Fund that you are otherwise subject to backup withholding.

FUNDamentals ^TM

Taxes

Financial Highlights

Columbia California Intermediate Municipal Bond Fund—Class Z Shares


	Year Ended March 31, 2010			Year Ended March 31, 2009			Year Ended March 31, 2008			Year Ended March 31, 2007			Year Ended March 31, 2006 ^(a)
Net Asset Value, Beginning of Period	$	[	]	$	9.48		$	9.61		$	9.47		$	9.61
Income from Investment Operations:
Net investment income (b)		[	]		0.34			0.35			0.35			0.34
Net realized and unrealized gain (loss) on investments and futures contracts		[	]		(0.15	)		(0.13	)		0.14			(0.09	)
Total from investment operations		[	]		0.19			0.22			0.49			0.25
Less Distributions to Shareholders:
From net investment income		[	]		(0.34	)		(0.35	)		(0.35	)		(0.34	)
From net realized gains		[	]		—			—			—			(0.05	)
Total distributions to shareholders		[	]		(0.34	)		(0.35	)		(0.35	)		(0.39	)
Net Asset Value, End of Period	$	[	]	$	9.33		$	9.48		$	9.61		$	9.47
Total return (c)(d)		[	]%		2.02	%		2.33	%		5.27	%		2.63	%
Ratios to Average Net Assets/Supplemental Data:
Net expenses before interest expense		[	]%		0.50	% ^(e)		0.50	% ^(e)		0.50	% ^(e)		0.50	% ^(e)
Interest expense		[	]		—			—	% ^(f)		—			—	% ^(f)
Net expenses		[	]%		0.50	% ^(e)		0.50	% ^(e)		0.50	% ^(e)		0.50	% ^(e)
Waiver/Reimbursement		[	]%		0.13	%		0.16	%		0.20	%		0.18	%
Net investment income		[	]%		3.58	% ^(e)		3.66	% ^(e)		3.67	% ^(e)		3.55	% ^(e)
Portfolio turnover rate		[	]%		19	%		5	%		13	%		35	%
Net assets, end of period (000’s)	$	[	]	$	187,844		$	203,426		$	132,921		$	122,286

^(a)	On August 22, 2005, the Fund’s Primary A shares were renamed Class Z shares.

^(b)	Per share data was calculated using the average shares outstanding during the period.

^(c)	Total return at net asset value assuming all distributions reinvested.

^(d)	Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

^(e)	The benefits derived from expense reductions had an impact of less than 0.01%.

^(f)	Rounds to less than 0.01%.

Hypothetical Fees and Expenses

The following supplemental hypothetical investment information provides additional information about the effect of the fees and expenses of the Fund, including investment advisory fees and other Fund costs, on the Fund’s returns over a 10-year period. The chart shows the estimated fees and expenses that would be charged on a hypothetical investment of $10,000 in Class Z shares of the Fund, assuming a 5% return each year, the cumulative return after fees and expenses and the hypothetical year-end balance after fees and expenses. The chart also assumes that all dividends and distributions are reinvested. The annual expense ratio used for the share class, which is the same as that stated in the Annual Fund Operating Expenses table, is presented in the chart and is net of any contractual fee waivers or expense reimbursements for the period of contractual commitment. Your actual costs may be higher or lower.

Columbia California Intermediate Municipal Bond Fund—Class Z Shares

Maximum Initial Sales Charge 0.00%

Initial Hypothetical Investment Amount
$10,000.00

Assumed Rate of Return 5%

Year

Cumulative Return
Before Fees and
Expenses

Annual Expense
Ratio

Cumulative Return
After Fees and
Expenses

Hypothetical Year-
End Balance After
Fees and Expenses

Annual Fees and
Expenses ^(a)

5.00

[

] %

[

] %

[

]

[

]

10.25

[

] %

[

] %

[

]

[

]

15.76

[

] %

[

] %

[

]

[

]

21.55

[

] %

[

] %

[

]

[

]

27.63

[

] %

[

] %

[

]

[

]

34.01

[

] %

[

] %

[

]

[

]

40.71

[

] %

[

] %

[

]

[

]

47.75

[

] %

[

] %

[

]

[

]

55.13

[

] %

[

] %

[

]

[

]

62.89

[

] %

[

] %

[

]

[

]

Total Gain After Fees and Expenses

[

]

Total Annual Fees and Expenses Paid

[

]

^(a)	Annual Fees and Expenses are calculated based on the average between the beginning and ending balance for each year. All information is calculated on an annual compounding basis.

LOGO

Columbia California Intermediate Municipal Bond Fund

Class Z Shares

Prospectus, August 1, 2010

For More Information


By Mail:		Columbia Funds c/o Columbia Management Investment Services Corp. P.O. Box 8081 Boston, MA 02266-8081

By Telephone:		800.345.6611

Online:		www.columbiafunds.com

Annual and Semi-Annual Reports to Shareholders

Shareholder Communications with the Board

Statement of Additional Information

The SAI provides more detailed information about the Fund and its policies. The SAI is legally part of this prospectus (incorporated by reference). A copy has been filed with the SEC.

Information Provided by the SEC

FUNDamentals™ is a trademark of Ameriprise Financial.

The investment company registration number of Columbia Funds Series Trust, of which the Fund is a series, is 811-09645.

One Financial Center, Boston, MA 02111-2621

800.345.6611 www.columbiafunds.com

INT-36/[ ]-0810

LOGO

Prospectus

August 1, 2010

Columbia Funds

Columbia Short Term Bond Fund


Ticker symbols
Class A Shares NSTRX
Class B Shares NSTFX
Class C Shares NSTIX


Table of Contents

Columbia Short Term Bond Fund		3

Investment Objective		3

Fees and Expenses of the Fund		3

Principal Investment Strategies		5

Principal Risks		5

Performance Information		8

Investment Adviser and Portfolio Manager(s)		9

Purchase and Sale of Fund Shares		9

Tax Information		9

Payments to Broker-Dealers and Other Financial Intermediaries		9

Additional Investment Strategies and Policies		10

Management of the Fund		12

Primary Service Providers		12

Other Roles and Relationships of Ameriprise Financial and its Affiliates—Certain Conflicts of Interest		14

Certain Legal Matters		15

Choosing a Share Class		16

Comparison of the Share Classes		16

Sales Charges and Commissions		17

Reductions/Waivers of Sales Charges		21

Distribution and Service Fees		23

Financial Intermediary Compensation		24

Buying, Selling and Exchanging Shares		25

Share Price Determination		25

Transaction Rules and Policies		26

Opening an Account and Placing Orders		30

Distributions and Taxes		34

Financial Highlights		37

Hypothetical Fees and Expenses		40

Icons Guide

LOGO Investment Objective

LOGO Fees and Expenses of the Fund

LOGO Principal Investment Strategies

LOGO Principal Risks

LOGO Performance Information

Other Roles and Relationships of Ameriprise Financial and its Affiliates - Certain Conflicts of Interest

Columbia Short Term Bond Fund

Investment Objective

The Fund seeks current income, consistent with minimal fluctuation of principal.

Fees and Expenses of the Fund

Shareholder Fees (fees paid directly from your investment)


	Class A Shares		Class B Shares		Class C Shares
Maximum sales charge (load) imposed on purchases, as a % of offering price	1.00	%	N/A		N/A
Maximum deferred sales charge (load) imposed on redemptions, as a % of the lower of the original purchase price or net asset value	1.00	% ^(a)	3.00	% ^(b)	1.00	% ^(c)

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)


	Class A Shares		Class B Shares		Class C Shares
Management fees	0.44	%	0.44	%	0.44	%
Distribution and/or service (Rule 12b-1) fees	0.25	%	1.00	%	1.00	%
Other expenses	[	]%	[	]%	[	]%
Total annual Fund operating expenses	[	]%	[	]%	[	]%

^(a)	This charge applies to investors who buy $1 million or more of Class A shares and redeem them within one year of purchase, with certain limited exceptions.

^(b)	This charge decreases over time.

^(c)	This charge applies to investors who buy Class C shares and redeem them within one year of purchase, with certain limited exceptions.

Example

•

you invest $10,000 in Class A, Class B or Class C shares of the Fund for the periods indicated,

•

your investment has a 5% return each year, and

•

the Fund’s total annual operating expenses remain the same as shown in the table above.

Based on the assumptions listed above, your costs would be:

1 year

3 years

5 years

10 years

Class A Shares

[

]

[

]

[

]

[

]

Class B Shares

Assuming no redemption of shares

[

]

[

]

[

]

[

]

Assuming complete redemption of shares at the end of the period

[

]

[

]

[

]

[

]

Class C Shares

Assuming no redemption of shares

[

]

[

]

[

]

[

]

Assuming complete redemption of shares at the end of the period

[

]

[

]

[

]

[

]

Remember this is an example only. Your actual costs may be higher or lower.

Portfolio Turnover

Principal Investment Strategies

Under normal circumstances, the Fund invests at least 80% of its net assets in bonds, including debt securities issued by the U.S. Government and its agencies, debt securities issued by corporations, mortgage- and other asset-backed securities, and dollar-denominated securities issued by foreign governments, companies or other entities. The Fund also invests at least 65% of its total assets in securities that, at the time of purchase, are rated investment grade or are unrated but determined by Columbia Management Investment Advisers, LLC, the Fund’s investment adviser (the Adviser), to be of comparable quality. Under normal circumstances, the Fund’s dollar-weighted average effective maturity will be three years or less, and its duration will be three years or less.

The Fund may invest in derivatives, including futures, forwards, options, swap contracts and other derivative instruments. The Fund may invest in derivatives for both hedging and non-hedging purposes, including, for example, to seek to enhance returns or as a substitute for a position in an underlying asset. The Fund also may invest in private placements.

The Fund also may participate in mortgage dollar rolls up to the Fund’s then current position in mortgage-backed securities.

Principal Risks

•

Interest Rate Risk – Debt securities are subject to interest rate risk. In general, if prevailing interest rates rise, the values of debt securities will tend to fall, and if interest rates fall, the values of debt securities will tend to rise. Changes in the value of a debt security usually will not affect the amount of income the Fund receives from it but may affect the value of the Fund’s shares. Interest rate risk is generally greater for debt securities with longer maturities/durations.

•

guaranteed by the U.S. Treasury.

•

Dollar Rolls Risk – Dollar rolls are transactions in which the Fund sells securities to a counterparty and simultaneously agrees to purchase those or similar securities in the future at a predetermined price. Dollar rolls involve the risk that the market value of the securities the Fund is obligated to repurchase may decline below the repurchase price, or that the counterparty may default on its obligations. These transactions may also increase the Fund’s portfolio turnover rate. If the Fund reinvests the proceeds of the security sold, the Fund will also be subject to the risk that the investments purchased with such proceeds will decline in value (a form of leverage risk).

•

Mortgage-Backed Securities Risk – The value of the Fund’s mortgage-backed securities may be affected by, among other things, changes or perceived changes in: interest rates, factors concerning the interests in and structure of the issuer or the originator of the mortgages, the creditworthiness of the entities that provide any supporting letters of credit, surety bonds or other credit enhancements, or the market’s assessment of the quality of underlying assets. Mortgage-backed securities represent interests in, or are backed by, pools of mortgages from which payments of interest and principal (net of fees paid to the issuer or guarantor of the securities) are distributed to the holders of the mortgage-backed securities. Mortgage-backed securities can have a fixed or an adjustable rate. Payment of principal and interest on some mortgage-backed securities (but not the market value of the securities themselves) may be guaranteed (i) by the full faith and credit of the U.S. Government (in the case of securities guaranteed by the Government National Mortgage Association) or (ii) by its agencies, authorities, enterprises or instrumentalities (in the case of securities guaranteed by the Federal National Mortgage Association (FNMA) or the Federal Home Loan Mortgage Corporation (FHLMC)), which are not insured or guaranteed by the U.S. Government (although FNMA and FHLMC may be able to access capital from the U.S. Treasury to meet their obligations under such securities). Mortgage-backed securities issued by non-governmental issuers (such as commercial banks, savings and loan institutions, private mortgage insurance companies, mortgage bankers and other secondary market issuers) may be supported by various credit enhancements, such as pool insurance, guarantees issued by governmental entities, letters of credit from a bank or senior/subordinated structures, and may entail greater risk than obligations guaranteed by the U.S. Government, whether or not such obligations are guaranteed by the private issuer. Mortgage-backed securities are subject to prepayment risk, which is the possibility that the underlying mortgage may be refinanced or prepaid prior to maturity during periods of declining or low interest rates, causing the Fund to have to reinvest the money received in securities that have lower yields. In addition, the impact of prepayments on the value of mortgage-backed securities may be difficult to predict and may result in greater volatility. Rising or high interest rates tend to extend the duration of mortgage-backed securities, making them more volatile and more sensitive to changes in interest rates.

•

Asset-Backed Securities Risk – The value of the Fund’s asset-backed securities may be affected by, among other things, changes in: interest rates, factors concerning the interests in and structure of the issuer or the originator of the receivables, the creditworthiness of the entities that provide any supporting letters of credit, surety bonds or other credit enhancements, or the market’s assessment of the quality of underlying assets. Asset-backed securities represent interests in, or are backed by, pools of receivables such as credit card, auto, student and home equity loans. They may also be backed, in turn, by securities backed by these types of loans and others, such as mortgage loans. Asset-backed securities can have a fixed or an adjustable rate. Most asset-backed securities are subject to prepayment risk, which is the possibility that the underlying debt may be refinanced or prepaid prior to maturity during periods of declining or low interest rates, causing the Fund to have to reinvest the money received in securities that have lower yields. In addition, the impact of prepayments on the value of asset-backed securities may be difficult to predict and may result in greater volatility. Rising or high interest rates tend to extend the duration of asset-backed securities, making them more volatile and more sensitive to changes in interest rates.

•

power to increase taxes or otherwise to raise revenue, or may be dependent on legislative appropriation or government aid. Certain debt securities are backed only by revenues derived from a particular project or source, rather than by an issuer’s taxing authority, and thus may have a greater risk of default.

•

Foreign Securities Risk – Foreign securities are subject to special risks as compared to securities of U.S. issuers. For example, foreign markets can be extremely volatile. Fluctuations in currency exchange rates may impact the value of foreign securities denominated in foreign currencies, or in U.S. dollars, without a change in the intrinsic value of those securities. Foreign securities may be less liquid than domestic securities so that the Fund may, at times, be unable to sell foreign securities at desirable times or prices. Brokerage commissions, custodial fees and other fees are also generally higher for foreign securities. The Fund may have limited or no legal recourse in the event of default with respect to certain foreign securities, including those issued by foreign governments. In addition, foreign governments may impose potentially confiscatory withholding or other taxes, which could reduce the amount of income and capital gains available to distribute to shareholders. Other risks include possible delays in the settlement of transactions or in the payment of income; generally less publicly available information about companies; the impact of political, social or diplomatic events; possible seizure, expropriation or nationalization of a company or its assets; possible imposition of currency exchange controls; and accounting, auditing and financial reporting standards that may be less comprehensive and stringent than those applicable to domestic companies.

•

Liquidity Risk – Illiquid securities are securities that cannot be readily disposed of in the normal course of business. There is a risk that the Fund may not be able to sell such securities at the time it desires, or that it cannot sell such securities without adversely affecting their price.

•

Derivatives Risk – Derivatives are financial contracts whose values are, for example, based on (or “derived” from) traditional securities (such as a stock or bond), assets (such as a commodity like gold or a foreign currency), reference rates (such as LIBOR) or market indices (such as the S&P 500 ^® Index). Derivatives involve special risks and may result in losses or may limit the Fund’s potential gain from favorable market movements. Derivative strategies often involve leverage, which may exaggerate a loss, potentially causing the Fund to lose more money than it would have lost had it invested in the underlying security or other asset. The values of derivatives may move in unexpected ways, especially in unusual market conditions, and may result in increased volatility, among other consequences. The use of derivatives may also increase the amount of taxes payable by shareholders holding shares in a taxable account. Other risks arise from the Fund’s potential inability to terminate or to sell derivative positions. A liquid secondary market may not always exist for the Fund’s derivative positions at times when the Fund might wish to terminate or to sell such positions. Over-the-counter instruments (investments not traded on an exchange) may be illiquid, and transactions in derivatives traded in the over-the-counter market are subject to the risk that the other party will not meet its obligations. The use of derivatives also involves the risks of mispricing or improper valuation and that changes in the value of the derivative may not correlate perfectly with the underlying security, asset, reference rate or index. The Fund also may not be able to find a suitable derivative transaction counterparty, and thus may be unable to engage in derivative transactions when it is deemed favorable to do so, or at all. For more information on the risks of derivative investments and strategies, see the Statement of Additional Information.

•

Performance Information

Year by Year Total Return (%) as of December 31 Each Year*

LOGO

*	Year-to-date return as of June 30, 2010: [ ]%

Best and Worst Quarterly Returns During this Period


Best:	[ ] quarter [ ]:	[ ]%
Worst:	[ ] quarter [ ]:	[ ]%

Average Annual Total Return as of December 31, 2009

The table compares the Fund’s returns for each period with those of the Barclays Capital 1-3 Year Government/Credit Index, which consists of Treasury or government agency securities and investment-grade corporate debt securities with maturities of one to three years.


	1 year		5 years		10 years
Class A shares returns before taxes	[	]%	[	]%	[	]%
Class A shares returns after taxes on distributions	[	]%	[	]%	[	]%
Class A shares returns after taxes on distributions and sale of Fund shares	[	]%	[	]%	[	]%
Class B shares returns before taxes	[	]%	[	]%	[	]%
Class C shares returns before taxes	[	]%	[	]%	[	]%
Barclays Capital 1-3 Year Government/Credit Index (reflects no deductions for fees, expenses or taxes)	[	]%	[	]%	[	]%

Investment Adviser and Portfolio Manager(s)

Investment Adviser

Columbia Management Investment Advisers, LLC

Portfolio Managers

Leonard A. Aplet, CFA

Co-manager. Service with the Fund since 2004.

Gregory S. Liechty

Co-manager. Service with the Fund since 2010.

Ronald B. Stahl, CFA

Co-manager. Service with the Fund since 2006.

Purchase and Sale of Fund Shares

Tax Information

The Fund normally distributes net investment income and net realized capital gains, if any, to shareholders. These distributions are generally taxable to you as ordinary income or capital gains, unless you are investing through a tax-deferred arrangement, such as a 401(k) plan or an individual retirement account (IRA).

Payments to Broker-Dealers and Other Financial Intermediaries

Additional Investment Strategies and Policies

Changing the Fund’s Investment Objective and Policies

Investment Guidelines

Holding Other Kinds of Investments

Investing in Money Market Funds

Lending Securities

Portfolio Holdings Disclosure

The Fund’s complete portfolio holdings as of a fiscal quarter-end are disclosed approximately 30 calendar days after such quarter-end. The Fund’s largest 15 holdings as a percent of the Fund’s portfolio as of a month-end are disclosed approximately 15 calendar days after such month-end.

In addition, more current information concerning the Fund’s portfolio holdings as of specified dates also may be disclosed on the Columbia Funds’ website.

Investing Defensively

Mailings to Households

Additional Information on Portfolio Turnover

A mutual fund that replaces, or turns over, more than 100% of its investments in a year is considered to have a high portfolio turnover rate. A high portfolio turnover rate can generate larger distributions of short-term capital gains to shareholders, which for individuals are generally taxable at higher rates than long-term capital gains for U.S. federal income tax purposes. A high portfolio turnover rate can also mean higher brokerage and other transaction costs, which could reduce a fund’s returns. In general, the greater the volume of buying and selling by a fund, the greater the impact that brokerage commissions will have on its returns. The Fund generally buys securities for capital appreciation, investment income or both. However, the Fund may sell securities regardless of how long they’ve been held. You’ll find the Fund’s portfolio turnover rate for its most recent fiscal year in the Fees and Expenses of the Fund — Portfolio Turnover section of this prospectus and portfolio turnover rates for prior fiscal years in the Financial Highlights section of this prospectus.

Management of the Fund

Primary Service Providers

The Adviser

Subadviser(s)

At present, the Adviser has not engaged any investment subadviser for the Fund.

Portfolio Managers

Information about the Adviser’s portfolio managers who are primarily responsible for overseeing the Fund’s investments is shown in the table below. The SAI provides more information about each portfolio manager’s compensation, other accounts managed by each portfolio manager and each portfolio manager’s ownership of securities in the Fund.

Leonard A. Aplet, CFA

Co-manager. Service with the Fund since 2004.

Portfolio manager of the Adviser. From 1987 until joining the Adviser in May 2010, Mr. Aplet was associated with the Fund’s previous investment adviser, Columbia Management Advisors, LLC, or its predecessors as an investment professional.

Gregory S. Liechty

Co-manager. Service with the Fund since 2010.

Portfolio manager of the Adviser; associated with the Adviser as an investment professional since 2005. Prior to joining the Adviser, Mr. Liechty was a senior portfolio manager at Evergreen Investment Management.

Ronald B. Stahl, CFA

Co-manager. Service with the Fund since 2006.

Portfolio manager of the Adviser. From 1998 until joining the Adviser in May 2010, Mr. Stahl was associated with the Fund’s previous investment adviser, Columbia Management Advisors, LLC, or its predecessors as an investment professional.

The Administrator

Annual Administration Fee,

as a % of Average Daily Net Assets


Columbia Short Term Bond Fund		0.14	%

The Distributor

The Transfer Agent

The Transfer Agent is a registered transfer agent and a wholly-owned subsidiary of Ameriprise Financial. The Transfer Agent’s responsibilities include processing purchases, sales and exchanges, calculating and paying distributions, keeping shareholder records, preparing account statements and providing customer service. The Fund pays the Transfer Agent monthly fees on a per-account basis. Fees paid to the Transfer Agent include reimbursements for certain out-of-pocket expenses and sub-transfer agency fees, subject to certain limitations, paid by the Transfer Agent on the Fund’s behalf.

Expense Reimbursement Arrangements

The Adviser has voluntarily agreed to reimburse a portion of the Fund’s expenses so that the Fund’s ordinary operating expenses (excluding any distribution and service fees, brokerage commissions, interest, taxes and extraordinary expenses, but including custodian charges relating to overdrafts, if any), after giving effect to any balance credits from the Fund’s custodian, do not exceed 0.48% of the Fund’s average daily net assets on an annualized basis. The Adviser, in its discretion, may revise or discontinue this arrangement at any time.

Other Roles and Relationships of Ameriprise Financial and its Affiliates—Certain Conflicts of Interest

Conflicts of interest and limitations that could affect a Columbia Fund may arise from, for example, the following:

•

compensation and other benefits received by the Adviser and other Ameriprise Financial affiliates related to the management/administration of a Columbia Fund and the sale of its shares;

•

separate and potentially divergent management of a Columbia Fund and other funds and accounts advised/managed by the Adviser and other Ameriprise Financial affiliates;

•

regulatory and other investment restrictions on investment activities of the Adviser and other Ameriprise Financial affiliates and accounts advised/managed by them;

•

insurance and other relationships of Ameriprise Financial affiliates with companies and other entities in which a Columbia Fund invests; and

•

regulatory and other restrictions relating to the sharing of information between Ameriprise Financial and its affiliates, including the Adviser, and a Columbia Fund.

Certain Legal Matters

Ameriprise Financial and certain of its affiliates have historically been involved in a number of legal, arbitration and regulatory proceedings, including routine litigation, class actions and governmental actions, concerning matters arising in connection with the conduct of their business activities. Ameriprise Financial believes that the Fund is not currently the subject of, and that neither Ameriprise Financial nor any of its affiliates is the subject of, any pending legal, arbitration or regulatory proceedings that are likely to have a material adverse effect on the Fund or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Fund. Information regarding certain pending and settled legal proceedings may be found in the Fund’s shareholder reports and in the SAI. Additionally, Ameriprise Financial is required to make 10-Q, 10-K and, as necessary, 8-K filings with the SEC on legal and regulatory matters that relate to Ameriprise Financial and its affiliates. Copies of these filings may be obtained by accessing the SEC website at www.sec.gov.

Choosing a Share Class

Comparison of the Share Classes

Share Class Features


	Class A Shares	Class B Shares	Class C Shares
Eligible Investors and Minimum Initial Investments ^(a)	Minimum initial investments range from $0 to $2,500; the share class is available to the general public for investment.	The Fund no longer accepts investments from new or existing investors in Class B shares, except through a reinvestment of a dividend or capital gain distribution, or a permitted exchange as described in more detail under Buying, Selling and Exchanging Shares - Opening an Account and Placing Orders – Buying Shares - Class B Shares Closing .	Minimum initial investments range from $0 to $2,500; the share class is available to the general public for investment.

Investment Limits	none	up to $49,999 (based on aggregate account value) ^(b)	up to $999,999

Conversion Features	none	convert to Class A shares eight years after purchase	none

Front-End Sales Charges ^(c)	1.00% maximum, declining to 0.00% on investments of $1 million or more	none	none

Contingent Deferred Sales Charges (CDSCs) ^(c)	none, except a 1.00% CDSC applies to certain investments of between $1 million and $50 million sold within one year of purchase	3.00% maximum, gradually declining to 0.00% after four years	1.00% on investments sold within one year of purchase

Maximum Distribution and Service Fees	0.25% combined distribution and service fee	0.75% distribution fee 0.25% service fee	0.75% distribution fee 0.25% service fee

^(a)	See Buying, Selling and Exchanging Shares – Opening an Account and Placing Orders for more details on the eligible investors and investment minimums of these share classes.

^(b)

^(c)	See Choosing a Share Class – Reductions/Waivers of Sales Charges for information about certain exceptions to these sales charges.

FUNDamentals ^TM

Selling and/or Servicing Agents

The terms “selling agent” and “servicing agent” refer to the financial intermediary that employs your financial advisor. Selling and/or servicing agents include, for example, brokerage firms, banks, investment advisors, third party administrators and other financial intermediaries, including Ameriprise Financial and its affiliates.

Sales Charges and Commissions

Class A Shares—Front-End Sales Charge

FUNDamentals ^TM

Front-End Sales Charge Calculation

The following table presents the front-end sales charge as a percentage of both the offering price and the net amount invested.

•

The offering price per share is the net asset value per share plus any front-end sales charge that applies.

•

The net asset value (or NAV) per share is the price of a share calculated by the Fund every business day.

The dollar amount of the sales charge is the difference between the offering price of the shares you buy (based on the applicable sales charge in the table) and the net asset value of those shares.

The front-end sales charge you’ll pay on Class A shares:

•

depends on the amount you’re investing (generally, the larger the investment, the smaller the percentage sales charge), and

•

is based on the total amount of your purchase and the value of your account.

Class A Shares—Front-End Sales Charge—Breakpoint Schedule


Dollar amount of shares bought ^(a)	Sales charge as a % of the offering price ^(b)		Sales charge as a % of the net amount invested ^(b)		Amount retained by or paid to selling and/or servicing agents as a % of the offering price
$0 – $99,999	1.00	%	1.01	%	0.75	%
$100,000 – $249,999	0.75	%	0.76	%	0.50	%
$250,000 – $999,999	0.50	%	0.50	%	0.40	%
$1,000,000 or more	0.00	%	0.00	%	1.00	% ^(c)(d)

^(a)	Purchase amounts and account values are aggregated among all eligible Columbia Fund accounts for the purposes of this table.

^(b)

^(c)

^(d)	For certain group retirement plans, selling and/or servicing agents are eligible to receive a 1.00% commission from the Distributor on all purchases up to $3 million, including those in amounts of less than $1 million that are coded as commission-eligible trades.

Class A Shares—CDSC and Commissions

In some cases, you’ll pay a CDSC if you sell Class A shares that you bought without an initial sales charge.

•

The CDSC on Class A shares:

•

is applied to the net asset value at the time of your purchase or sale, whichever is lower, and

•

will not be applied to any shares you receive through reinvested distributions.

The Distributor may pay your selling and/or servicing agent an up-front commission of up to 0.75% of the offering price per share when you buy Class A shares. The Distributor funds the commission through the applicable sales charge.

The Distributor may also pay your selling and/or servicing agent a cumulative commission when you buy $1 million or more of Class A shares, according to the following schedule:

Class A Shares—Commission Schedule


Purchase Amount	Commission Level (as a % of net asset value per share)
$1 million – $2,999,999	1.00	%
$3 million – $49,999,999	0.50	%
$50 million or more	0.25	%

FUNDamentals ^TM

Contingent Deferred Sales Charge

Class B and Class C Shares—Sales Charges

You don’t pay a front-end sales charge when you buy Class B or Class C shares, but you may pay a CDSC when you sell Class B or Class C shares.

The CDSC on Class B and Class C shares:

•

is applied to the net asset value at the time of your purchase or sale, whichever is lower,

•

will not be applied to any shares you receive through reinvested distributions, and

•

generally declines each year until there is no sales charge for selling shares.

Class B Shares—CDSC and Commissions

Class B Shares—CDSC Schedule


Number of Years Class B Shares Held		Applicable CDSC
One		3.00%
Two		3.00%
Three		2.00%
Four		1.00%
Five		none
Six		none
Seven		none
Eight		none
Nine		Conversion to Class A Shares

The following rules apply to the conversion of Class B shares to Class A shares:

•

Class B shares are converted on or about the 15th day of the month that they become eligible for conversion.

•

Any shares you received from reinvested distributions on these shares generally will convert to Class A shares at the same time.

•

No sales charge or other charges apply, and conversions are free from U.S. federal income tax.

Class C Shares—CDSC and Commissions

Reductions/Waivers of Sales Charges

Front-End Sales Charge Reductions

FUNDamentals ^TM

Your “Immediate Family” and Account Value Aggregation

Eligible Accounts

The types of accounts that are eligible for the account value aggregation purposes described above are:

•

individual accounts,

•

joint accounts,

•

certain IRA accounts,

•

certain health savings accounts,

•

certain trust accounts, and

•

Uniform Gifts to Minors Act (UGMA)/Uniform Transfers to Minors Act (UTMA) accounts.

Eligible accounts do not include Class R share accounts or accounts holding shares of money market funds that used the Columbia brand before May 1, 2010.

Front-End Sales Charge Waivers

CDSC Waivers

The Fund may change or cancel these terms at any time. Any change or cancellation applies only to future purchases.

For more information about the sales charge reductions and waivers described here, consult the SAI.

Distribution and Service Fees

The table below shows the maximum annual distribution and service fees (as an annual % of average daily net assets) and the combined amount of such fees applicable to each share class:

Distribution and Service (Rule 12b-1) Fees


	Distribution Fee		Service Fee		Combined Total
Class A	—	^(a)	—	^(a)	0.25	% ^(a)
Class B	0.75	%	0.25	%	1.00	%
Class C	0.75	%	0.25	%	1.00	%

^(a)	The Fund’s Class A shares pay a combined distribution and service fee pursuant to the Fund’s combined distribution and shareholder servicing plan for Class A shares.

Financial Intermediary Compensation

The Distributor and the Adviser make payments, from their own resources, to certain financial intermediaries, including other Ameriprise Financial affiliates, for marketing/sales support services relating to the Columbia Funds. Such payments are generally based upon one or more of the following factors: average net assets of the Columbia Funds sold by the Distributor attributable to that intermediary, gross sales of the Columbia Funds distributed by the Distributor attributable to that intermediary, reimbursement of ticket charges (fees that an intermediary firm charges its representatives for effecting transactions in Fund shares) or a negotiated lump sum payment. While the financial arrangements may vary for each intermediary, the support payments to any one intermediary are generally between 0.05% and 0.50% on an annual basis for payments based on average net assets of the Fund attributable to the intermediary, and between 0.05% and 0.25% on an annual basis for firms receiving a payment based on gross sales of the Columbia Funds attributable to the intermediary.

These payments for shareholder servicing support vary by financial intermediary but generally are not expected, with certain limited exceptions, to exceed 0.40% of the average aggregate value of the Fund’s shares in any financial intermediary’s program on an annual basis for those classes of shares that pay a service fee pursuant to a plan under Rule 12b-1 under the 1940 Act, and 0.45% of the average aggregate value of the Fund’s shares in any financial intermediary’s program on an annual basis for those classes of shares that do not pay a service fee pursuant to a plan under Rule 12b-1 under the 1940 Act.

Amounts paid by the Distributor and the Adviser and their affiliates are paid out of the Distributor’s and the Adviser’s own resources and do not increase the amount paid by you or the Fund. You can find further details about the payments made by the Distributor and the Adviser and their affiliates and the services provided by financial intermediaries as well as a list of the intermediaries to which the Distributor and the Adviser have agreed to make marketing support payments in the SAI. Your financial intermediary may charge you fees and commissions in addition to those described in this prospectus. You should consult with your financial intermediary and review carefully any disclosure your financial intermediary provides regarding its services and compensation. Depending on the financial arrangement in place at any particular time, a financial intermediary and its financial consultants may have a financial incentive for recommending the Fund or a particular share class over others. See Management of the Fund – Other Roles and Relationships of Ameriprise Financial and its Affiliates – Certain Conflicts of Interest for more information.

Buying, Selling and Exchanging Shares

Share Price Determination

FUNDamentals ^TM

NAV Calculation

Each of the Fund’s share classes calculates its NAV as follows:


		(Value of assets of the share class)
NAV =		—(Liabilities of the share class)
		Number of outstanding shares of the class

Transaction Rules and Policies

Also remember that the Fund may refuse any order to buy or exchange shares. If this happens, we’ll return any money we’ve received, but no interest will be paid on that money.

Order Processing

FUNDamentals ^TM

Business Days

A business day is any day that the New York Stock Exchange (NYSE) is open. A business day ends at the close of regular trading on the NYSE, usually at 4:00 p.m. Eastern time. If the NYSE closes early, the business day ends as of the time the NYSE closes. On holidays and other days when the NYSE is closed, the Fund’s net asset value is not calculated and the Fund does not accept buy or sell orders. However, the value of the Fund’s assets may still be affected on such days to the extent that the Fund holds foreign securities that trade on days that foreign securities markets are open.

“Good Form”

An order is in “good form” if the Transfer Agent or your selling and/or servicing agent has all of the information and documentation it deems necessary to effect your order. For example, when you sell shares by letter of instruction, “good form” means that your letter has (i) complete instructions and the signatures of all account owners, (ii) a Medallion signature guarantee for amounts equal to or greater than $100,000 and (iii) any other required documents completed and attached. For the documents required for sales by corporations, agents, fiduciaries, surviving joint owners and other legal entities, call 800.345.6611.

Medallion Signature Guarantees

Written Transactions

Telephone Transactions

Telephone orders may not be as secure as written orders. Columbia Funds will take reasonable steps to confirm that telephone instructions are genuine. For example, we require proof of your identification before we will act on instructions received by telephone and may record telephone conversations. However, the Fund and its agents will not be responsible for any losses, costs or expenses resulting from an unauthorized telephone instruction when reasonable steps have been taken to confirm that telephone instructions are

genuine. Telephone orders may be difficult to complete during periods of significant economic or market change or business interruption.

Online Transactions

Once you have an account, contact Columbia Funds at 800.345.6611 for more information on account trading restrictions and the special sign-up procedures required for online transactions. The Transfer Agent has procedures in place to authenticate electronic orders you deliver through the internet. You will be required to accept the terms of an online agreement and to establish and utilize a password in order to access online account services.

You can sell up to an aggregate of $100,000 of shares through the internet in any 30-day period if you qualify for internet orders.

Customer Identification Program

Small Account Policy—Accounts Below $250

Small Account Policy—Minimum Balance Fee

Exceptions to the Above Small Account Policy (Accounts Below $250 and Minimum Balance Fee)

Small Account Policy—Broker/Dealer and Wrap Fee Accounts

Columbia Funds may automatically redeem shares at any time from broker/dealer networked accounts and wrap fee accounts that have account balances of $20 or less or that have less than one share.

Cash Flows

Information Sharing Agreements

As required by Rule 22c-2 under the 1940 Act, the Columbia Funds or certain of their service providers will enter into information sharing agreements with financial intermediaries, including participating life insurance companies and financial intermediaries that sponsor or offer retirement plans through which shares of the Columbia Funds are made available for purchase. Pursuant to Rule 22c-2, financial intermediaries are required, upon request, to: (i) provide shareholder account and transaction information and (ii) execute instructions from the Fund to restrict or prohibit further purchases of Fund shares by shareholders who have been identified by the Fund as having engaged in transactions that violate the Fund’s excessive trading policies and procedures. See Buying, Selling and Exchanging Shares – Excessive Trading Practices for more information.

Excessive Trading Practices

Some financial intermediaries apply their own restrictions or policies to underlying investor accounts, which may be more or less restrictive than those described here. This may impact the Fund’s ability to curtail excessive trading, even where it is identified. For these and other reasons, it is possible that excessive trading may occur despite the Fund’s efforts to detect and prevent it.

Risks of Excessive Trading – Excessive trading creates certain risks to the Fund’s long-term shareholders and may create the following adverse effects:

•

negative impact on the Fund’s performance;

•

potential dilution of the value of the Fund’s shares;

•

losses on the sale of investments resulting from the need to sell securities at less favorable prices;

•

increased taxable gains to the Fund’s remaining shareholders resulting from the need to sell securities to meet sell orders; and

•

increased brokerage and administrative costs.

Opening an Account and Placing Orders

Columbia Funds encourages you to consult with a financial advisor who can help you with your investment decisions and who can help you open an account. Once you have an account, you can buy, sell and exchange shares by contacting your financial advisor who will send your order to the Transfer Agent or your selling and/or servicing agent. As described in Buying, Selling and Exchanging Shares – Transaction Rules and Policies , once you have an account you can also communicate your orders directly to the Transfer Agent by mail, by telephone or online.

Buying Shares

Eligible Investors

Class B Shares Closing

Additional Class B shares will be issued only to existing investors in Class B shares and only through the following two types of transactions (Qualifying Transactions):

•

Dividends and/or capital gain distributions may continue to be reinvested in Class B shares of the Fund.

•

Shareholders invested in Class B shares of the Fund may exchange those shares for Class B shares of other Columbia Funds offering such shares.

Any initial purchase orders for the Fund’s Class B shares will be rejected (other than through a Qualifying Transaction that is an exchange transaction).

Minimum Initial Investments

Minimum Additional Investments

There is no minimum additional investment for Class A or Class C shares.

Systematic Investment Plan

Dividend Diversification

Wire Purchases

You may buy Class A or Class C shares of the Fund by wiring money from your bank account to your Fund account by calling the Transfer Agent at 800.422.3737.

Electronic Funds Transfer

Other Purchase Rules You Should Know

•

You generally buy Class A shares at the public offering price per share because purchases of Class A shares are generally subject to a front-end sales charge.

•

You buy Class B and Class C shares at net asset value per share because no front-end sales charge applies to purchases of these share classes.

•

Selling and/or servicing agents are responsible for sending your buy orders to the Transfer Agent and ensuring that we receive your money on time.

•

Shares bought are recorded on the books of the Fund. The Fund doesn’t issue certificates.

Selling Shares

When you sell your shares, the Fund is effectively buying them back from you. This is called a redemption.

Wire Redemptions

Electronic Funds Transfer

Systematic Withdrawal Plan

guaranteed.

In-Kind Distributions

Other Redemption Rules You Should Know

•

No interest will be paid on uncashed redemption checks.

•

Other restrictions may apply to retirement accounts. For information about these restrictions, contact your retirement plan administrator.

•

Also keep in mind Columbia Funds’ Small Account Policy, which is described above in Buying, Selling and Exchanging Shares – Transaction Rules and Policies .

Exchanging Shares

Systematic Exchanges

The rules described below for making exchanges apply to systematic exchanges.

Other Exchange Rules You Should Know

•

Exchanges are made at net asset value.

•

You can generally make exchanges between like share classes of any Columbia Fund. Some exceptions apply.

•

A sales charge may apply when you exchange shares of a Columbia Fund that were not assessed a sales charge at the time of your initial purchase.

•

The rules for buying shares of a Columbia Fund generally apply to exchanges into that Fund.

•

You may make exchanges only into a Columbia Fund that is legally offered and sold in your state of residence.

•

You generally may make an exchange only into a Columbia Fund that is accepting investments.

•

The Fund may change or cancel your right to make an exchange by giving the amount of notice required by regulatory authorities (generally 60 days for a material change or cancellation).

•

Unless your account is part of a tax-advantaged arrangement, an exchange for shares of another fund is a taxable event, and you may recognize a gain or loss for tax purposes.

Same-Fund Exchange Privilege for Class Z Shares

Distributions and Taxes

Distributions to Shareholders

A mutual fund can make money two ways:

•

It can earn income on its investments. Examples of fund income are interest paid on money market instruments and bonds, and dividends paid on common stocks.

•

FUNDamentals ^TM

Distributions

Declaration and Distribution Schedule


Declarations		daily
Distributions		monthly

The Fund may, however, pay distributions of net investment income more frequently.

Unless you are a tax-exempt investor or holding Fund shares through a tax-advantaged account (such as a 401(k) plan or IRA), you should consider avoiding buying Fund shares shortly before the Fund makes a distribution, other than distributions of net investment income that are declared daily, because doing so can cost you money in taxes. This is because you will, in effect, receive part of your purchase price back in the distribution. This is known as “buying a dividend.” To avoid “buying a dividend,” check the Fund’s distribution schedule online at www.columbiafunds.com, or by calling us at 800.345.6611, before you invest.

If you buy shares of the Fund when it holds securities with unrealized capital gain, you may, in effect, receive part of your purchase price back if and when the Fund sells those securities and distributes any net realized gain. Any such distribution is generally subject to tax. The Fund may have, or

may build up over time, high levels of unrealized capital gain. If you buy shares of the Fund when it has capital loss carryforwards, the Fund may have the ability to offset capital gains realized by the Fund that otherwise would have been distributed to shareholders with such carryforwards, although capital loss carryforwards generally expire after eight taxable years and may be subject to substantial limitations.

Taxes and Your Investment

The Fund will send you a statement each year showing how much you’ve received in distributions in the prior year and the distributions’ character for federal income tax purposes. The Fund expects that distributions will consist primarily of ordinary income. In addition, you should be aware of the following:

•

Distributions generally are taxable to you when paid, whether they are paid in cash or automatically reinvested in additional shares of the Fund.

•

Distributions of the Fund’s ordinary income and net short-term capital gain, if any, generally are taxable to you as ordinary income. Distributions of the Fund’s net long-term capital gain, if any, generally are taxable to you as long-term capital gain. Whether capital gains are long-term or short-term is determined by how long the Fund has owned the investments that generated them, rather than how long you have owned your shares.

•

The Fund is required by federal law to withhold tax on any taxable distributions and sale proceeds paid to you (including amounts paid to you in securities and amounts deemed to be paid to you upon an exchange of shares) if: you haven’t provided a correct taxpayer identification number (TIN) or haven’t certified to the Fund that withholding doesn’t apply; the Internal Revenue Service (IRS) has notified us that the TIN listed on your account is incorrect according to its records; or the IRS informs the Fund that you are otherwise subject to backup withholding.

FUNDamentals ^TM

Taxes

Financial Highlights

Columbia Short Term Bond Fund—Class A Shares


	Year Ended March 31, 2010			Year Ended March 31, 2009			Year Ended March 31, 2008			Year Ended March 31, 2007			Year Ended March 31, 2006 ^(a)
Net Asset Value, Beginning of Period	$	[	]	$	9.89		$	9.84		$	9.75		$	9.82
Income from Investment Operations:
Net investment income ^(b)		[	]		0.42			0.44			0.40			0.31
Net realized and unrealized gain (loss) on investments and futures contracts		[	]		(0.42	)		0.05			0.09			(0.07	)
Total from investment operations		[	]		—			0.49			0.49			0.24
Less Distributions to Shareholders:
From net investment income		[	]		(0.42	)		(0.44	)		(0.40	)		(0.31	)
From net realized gains		[	]		—			—			—			—
Total distributions to shareholders		[	]		(0.42	)		(0.44	)		(0.40	)		(0.31	)
Increase from regulatory settlement		[	]		—	^(c)		—			—			—
Net Asset Value, End of Period	$	[	]	$	9.47		$	9.89		$	9.84		$	9.75
Total return ^(d)(e)		[	]%		0.03	%		5.13	%		5.12	%		2.47	%
Ratios to Average Net Assets/Supplemental Data:
Net expenses ^(f)		[	]%		0.73	%		0.73	%		0.73	%		0.72	%
Waiver/Reimbursement		[	]%		0.04	%		0.02	%		0.02	%		0.08	% ^(g)
Net investment income ^(f)		[	]%		4.43	%		4.43	%		4.05	%		3.27	%
Portfolio turnover rate		[	]%		58	%		58	%		72	%		80	%
Net assets, end of period (000’s)	$	[	]		121,914		$	76,196		$	85,635		$	83,675

^(a)	On August 22, 2005, the Fund’s Investor A shares were renamed Class A shares.

^(b)	Per share data was calculated using the average shares outstanding during the period.

^(c)	Rounds to less than $0.01 per share.

^(d)	Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge.

^(e)	Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

^(f)	The benefits derived from expense reductions had an impact of less than 0.01%.

^(g)	Bank of America Corporation assumed certain non-recurring costs. Absent these non-recurring costs, the waiver/reimbursement ratio would have been 0.02% and 0.08% for the periods ended March 31, 2006, and March 31, 2005, respectively.

Columbia Short Term Bond Fund—Class B Shares


	Year Ended March 31, 2010			Year Ended March 31, 2009			Year Ended March 31, 2008			Year Ended March 31, 2007			Year Ended March 31, 2006 ^(a)
Net Asset Value, Beginning of Period	$	[	]	$	9.89		$	9.84		$	9.74		$	9.81
Income from Investment Operations:
Net investment income ^(b)		[	]		0.35			0.36			0.32			0.25
Net realized and unrealized gain (loss) on investments and futures contracts		[	]		(0.42	)		0.06			0.11			(0.08	)
Total from investment operations		[	]		(0.07	)		0.42			0.43			0.17
Less Distributions to Shareholders:
From net investment income		[	]		(0.35	)		(0.37	)		(0.33	)		(0.24	)
From net realized gains		[	]		—			—			—			—
Total distributions to shareholders		[	]		(0.35	)		0.37			(0.33	)		(0.24	)
Increase from regulatory settlement		[	]		—	^(c)		—			—			—
Net Asset Value, End of Period	$	[	]	$	9.47		$	9.89		$	9.84		$	9.74
Total return ^(d)(e)		[	]%		(0.72	)%		4.35	%		4.45	%		1.71	%
Ratios to Average Net Assets/Supplemental Data:
Net expenses ^(f)		[	]%		1.48	%		1.48	%		1.48	%		1.47	%
Waiver/Reimbursement		[	]%		0.04	%		0.02	%		0.02	%		0.08	% ^(g)
Net investment income ^(f)		[	]%		3.69	%		3.69	%		3.30	%		2.69	%
Portfolio turnover rate		[	]%		58	%		58	%		72	%		80	%
Net assets, end of period (000’s)	$	[	]	$	10,502		$	14,035		$	20,303		$	28,061

^(a)	On August 22, 2005, the Fund’s Investor B shares were renamed Class B shares.

^(b)	Per share data was calculated using the average shares outstanding during the period.

^(c)	Rounds to less than $0.01 per share.

^(d)	Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge.

^(e)	Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

^(f)	The benefits derived from expense reductions had an impact of less than 0.01%.

^(g)	Bank of America Corporation assumed certain non-recurring costs. Absent these non-recurring costs, the waiver/reimbursement ratio would have been 0.02% and 0.08% for the periods ended March 31, 2006, and March 31, 2005, respectively.

Columbia Short Term Bond Fund—Class C Shares


	Year Ended March 31, 2010			Year Ended March 31, 2009			Year Ended March 31, 2008			Year Ended March 31, 2007			Year Ended March 31, 2006 ^(a)
Net Asset Value, Beginning of Period	$	[	]	$	9.88		$	9.83		$	9.74		$	9.81
Income from Investment Operations:
Net investment income ^(b)		[	]		0.39			0.41			0.37			0.26
Net realized and unrealized gain (loss) on investments and futures contracts		[	]		(0.42	)		0.05			0.09			(0.07	)
Total from investment operations		[	]		(0.03	)		0.46			0.46			0.19
Less Distributions to Shareholders:
From net investment income		[	]		(0.39	)		(0.41	)		(0.37	)		(0.26	)
From net realized gains		[	]		—			—			—			—
Total distributions to shareholders		[	]		(0.39	)		(0.41	)		(0.37	)		(0.26	)
Increase from regulatory settlement		[	]		—	^(c)		—			—			—
Net Asset Value, End of Period	$	[	]	$	9.46		$	9.88		$	9.83		$	9.74
Total return ^(d)(e)		[	]%		(0.29	)%		4.80	%		4.80	%		1.94	%
Ratios to Average Net Assets/Supplemental Data:
Net expenses ^(f)		[	]%		1.04	%		1.04	%		1.04	%		1.20	%
Waiver/Reimbursement		[	]%		0.48	%		0.46	%		0.46	%		0.35	% ^(g)
Net investment income ^(f)		[	]%		4.12	%		4.12	%		3.75	%		2.69	%
Portfolio turnover rate		[	]%		58	%		58	%		72	%		80	%
Net assets, end of period (000’s)	$	[	]	$	35,926		$	18,644		$	17,598		$	22,091

^(a)	On August 22, 2005, the Fund’s Investor C shares were renamed Class C shares.

^(b)	Per share data was calculated using the average shares outstanding during the period.

^(c)	Rounds to less than $0.01 per share.

^(d)	Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge.

^(e)	Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

^(f)	The benefits derived from expense reductions had an impact of less than 0.01%.

^(g)	Bank of America Corporation assumed certain non-recurring costs. Absent these non-recurring costs, the waiver/reimbursement ratio would have been 0.02% and 0.08% for the periods ended March 31, 2006, and March 31, 2005, respectively.

Hypothetical Fees and Expenses

Columbia Short Term Bond Fund—Class A Shares

Maximum Initial Sales Charge 1.00%

Initial Hypothetical Investment Amount
$10,000.00

Assumed Rate of Return 5%

Year

Cumulative Return
Before Fees and
Expenses

Annual Expense
Ratio

Cumulative Return
After Fees and
Expenses

Hypothetical Year-
End Balance After
Fees and Expenses

Annual Fees and
Expenses ^(a)

5.00

[

]% ^(b)

[

]

[

]

10.25

[

]

[

]

15.76

[

]

[

]

21.55

[

]

[

]

27.63

[

]

[

]

34.01

[

]

[

]

40.71

[

]

[

]

47.75

[

]

[

]

55.13

[

]

[

]

62.89

[

]

[

]

Total Gain After Fees and Expenses

[

]

Total Annual Fees and Expenses Paid

[

]

^(a)	Annual Fees and Expenses are calculated based on the average between the beginning and ending balance for each year. All information is calculated on an annual compounding basis.

^(b)	Reflects deduction of the maximum initial sales charge.

Columbia Short Term Bond Fund—Class B Shares

Maximum Initial Sales Charge 0.00%

Initial Hypothetical Investment Amount
$10,000.00

Assumed Rate of Return 5%

Year

Cumulative Return
Before Fees and
Expenses

Annual Expense
Ratio

Cumulative Return
After Fees and
Expenses

Hypothetical Year-
End Balance After
Fees and Expenses

Annual Fees and
Expenses ^(a)

5.00

[

]

[

]

10.25

[

]

[

]

15.76

[

]

[

]

21.55

[

]

[

]

27.63

[

]

[

]

34.01

[

]

[

]

40.71

[

]

[

]

47.75

[

]

[

]

55.13

[

]

[

]

62.89

[

]

[

]

Total Gain After Fees and Expenses

[

]

Total Annual Fees and Expenses Paid

[

]

^(a)	Annual Fees and Expenses are calculated based on the average between the beginning and ending balance for each year. All information is calculated on an annual compounding basis.

Columbia Short Term Bond Fund—Class C Shares

Maximum Initial Sales Charge 0.00%

Initial Hypothetical Investment Amount
$10,000.00

Assumed Rate of Return 5%

Year

Cumulative Return
Before Fees and
Expenses

Annual Expense
Ratio

Cumulative Return
After Fees and
Expenses

Hypothetical Year-
End Balance After
Fees and Expenses

Annual Fees and
Expenses ^(a)

5.00

[

]

[

]

10.25

[

]

[

]

15.76

[

]

[

]

21.55

[

]

[

]

27.63

[

]

[

]

34.01

[

]

[

]

40.71

[

]

[

]

47.75

[

]

[

]

55.13

[

]

[

]

62.89

[

]

[

]

Total Gain After Fees and Expenses

[

]

Total Annual Fees and Expenses Paid

[

]

^(a)	Annual Fees and Expenses are calculated based on the average between the beginning and ending balance for each year. All information is calculated on an annual compounding basis.

LOGO

Columbia Short Term Bond Fund

Class A, Class B and Class C Shares

Prospectus, August 1, 2010

For More Information


By Mail:		Columbia Funds c/o Columbia Management Investment Services Corp. P.O. Box 8081 Boston, MA 02266-8081

By Telephone:		800.345.6611

Online:		www.columbiafunds.com

Annual and Semi-Annual Reports to Shareholders

Shareholder Communications with the Board

Statement of Additional Information

The SAI provides more detailed information about the Fund and its policies. The SAI is legally part of this prospectus (incorporated by reference). A copy has been filed with the SEC.

Information Provided by the SEC

FUNDamentals™ is a trademark of Ameriprise Financial.

The investment company registration number of Columbia Funds Series Trust, of which the Fund is a series, is 811-09645.

One Financial Center, Boston, MA 02111-2621

800.345.6611 www.columbiafunds.com

INT-36/[ ]-0810

LOGO

Prospectus

August 1, 2010

Columbia Funds

Columbia Short Term Bond Fund

Ticker symbol

Class Z Shares NSTMX

Table of Contents


Columbia Short Term Bond Fund		3

Investment Objective		3

Fees and Expenses of the Fund		3

Principal Investment Strategies		5

Principal Risks		5

Performance Information		8

Investment Adviser and Portfolio Manager(s)		9

Purchase and Sale of Fund Shares		9

Tax Information		9

Payments to Broker-Dealers and Other Financial Intermediaries		9

Additional Investment Strategies and Policies		10

Management of the Fund		12

Primary Service Providers		12

Other Roles and Relationships of Ameriprise Financial and its Affiliates—Certain Conflicts of Interest		14

Certain Legal Matters		15

About Class Z Shares		16

Description of the Share Class		16

Financial Intermediary Compensation		17

Buying, Selling and Exchanging Shares		18

Share Price Determination		18

Transaction Rules and Policies		19

Opening an Account and Placing Orders		23

Distributions and Taxes		27

Financial Highlights		30

Hypothetical Fees and Expenses		31

Icons Guide

LOGO Investment Objective

LOGO Fees and Expenses of the Fund

LOGO Principal Investment Strategies

LOGO Principal Risks

LOGO Performance Information

LOGO Other Roles and Relationships of Ameriprise Financial and its Affiliates - Certain Conflicts of Interest

Columbia Short Term Bond Fund

Investment Objective

The Fund seeks current income, consistent with minimal fluctuation of principal.

Fees and Expenses of the Fund

This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.

Shareholder Fees (fees paid directly from your investment)


		Class Z Shares
Maximum sales charge (load) imposed on purchases, as a % of offering price		N/A
Maximum deferred sales charge (load) imposed on redemptions, as a % of the lower of the original purchase price or net asset value		N/A

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)


	Class Z Shares
Management fees	0.44	%
Distribution and/or service (Rule 12b-1) fees	0.00	%
Other expenses	[ ]	%
Total annual Fund operating expenses	[ ]	%

Example

The following example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds.

The example illustrates the hypothetical expenses that you would incur over the time periods indicated, and assumes that:

•

you invest $10,000 in Class Z shares of the Fund for the periods indicated,

•

your investment has a 5% return each year, and

•

the Fund’s total annual operating expenses remain the same as shown in the table above.

Based on the assumptions listed above, your costs would be:

1 year

3 years

5 years

10 years

Class Z Shares

[

]

[

]

[

]

[

]

Remember this is an example only. Your actual costs may be higher or lower.

Portfolio Turnover

Principal Investment Strategies

The Fund also may participate in mortgage dollar rolls up to the Fund’s then current position in mortgage-backed securities.

Principal Risks

•

Interest Rate Risk – Debt securities are subject to interest rate risk. In general, if prevailing interest rates rise, the values of debt securities will tend to fall, and if interest rates fall, the values of debt securities will tend to rise. Changes in the value of a debt security usually will not affect the amount of income the Fund receives from it but may affect the value of the Fund’s shares. Interest rate risk is generally greater for debt securities with longer maturities/durations.

•

guaranteed by the U.S. Treasury.

•

Foreign Securities Risk – Foreign securities are subject to special risks as compared to securities of U.S. issuers. For example, foreign markets can be extremely volatile. Fluctuations in currency exchange rates may impact the value of foreign securities denominated in foreign currencies, or in U.S. dollars, without a change in the intrinsic value of those securities. Foreign securities may be less liquid than domestic securities so that the Fund may, at times, be unable to sell foreign securities at desirable times or prices. Brokerage commissions, custodial fees and other fees are also generally higher for foreign securities. The Fund may have limited or no legal recourse in the event of default with respect to certain foreign securities, including those issued by foreign governments. In addition, foreign governments may impose potentially confiscatory withholding or other taxes, which could reduce the amount of income and capital gains available to distribute to shareholders. Other risks include possible delays in the settlement of transactions or in the payment of income; generally less publicly available information about companies; the impact of political, social or diplomatic events; possible seizure, expropriation or nationalization of a company or its assets; possible imposition of currency exchange controls; and accounting, auditing and financial reporting standards that may be less comprehensive and stringent than those applicable to domestic companies.

•

Derivatives Risk – Derivatives are financial contracts whose values are, for example, based on (or “derived” from) traditional securities (such as a stock or bond), assets (such as a commodity like gold or a foreign currency), reference rates (such as LIBOR) or market indices (such as the S&P 500 ^® Index). Derivatives involve special risks and may result in losses or may limit the Fund’s potential gain from favorable market movements. Derivative strategies often involve leverage, which may exaggerate a loss, potentially causing the Fund to lose more money than it would have lost had it invested in the underlying security or other asset. The values of derivatives may move in unexpected ways, especially in unusual market conditions, and may result in increased volatility, among other consequences. The use of derivatives may also increase the amount of taxes payable by shareholders holding shares in a taxable account. Other risks arise from the Fund’s potential inability to terminate or to sell derivative positions. A liquid secondary market may not always exist for the Fund’s derivative positions at times when the Fund might wish to terminate or to sell such positions. Over-the-counter instruments (investments not traded on an exchange) may be illiquid, and transactions in derivatives traded in the over-the-counter market are subject to the risk that the other party will not meet its obligations. The use of derivatives also involves the risks of mispricing or improper valuation and that changes in the value of the derivative may not correlate perfectly with the underlying security, asset, reference rate or index. The Fund also may not be able to find a suitable derivative transaction counterparty, and thus may be unable to engage in derivative transactions when it is deemed favorable to do so, or at all. For more information on the risks of derivative investments and strategies, see the Statement of Additional Information.

•

Performance Information

Year by Year Total Return (%) as of December 31 Each Year*

The bar chart below shows you how the performance of the Fund’s Class Z shares has varied from year to year.

LOGO

*	Year-to-date return as of June 30, 2010: [ ]%.

Best and Worst Quarterly Returns During this Period


Best:	[ ] quarter [ ]:	[ ]%
Worst:	[ ] quarter [ ]:	[ ]%

Average Annual Total Return as of December 31, 2009


	1 year		5 years		10 years
Class Z shares returns before taxes	[	]%	[	]%	[	]%
Class Z shares returns after taxes on distributions	[	]%	[	]%	[	]%
Class Z shares returns after taxes on distributions and sale of Fund shares	[	]%	[	]%	[	]%
Barclays Capital 1-3 Year Government/Credit Index (reflects no deductions for fees, expenses or taxes)	[	]%	[	]%	[	]%

Investment Adviser and Portfolio Manager(s)

Investment Adviser

Columbia Management Investment Advisers, LLC

Portfolio Managers

Leonard A. Aplet, CFA

Co-manager. Service with the Fund since 2004.

Gregory S. Liechty

Co-manager. Service with the Fund since 2010.

Ronald B. Stahl, CFA

Co-manager. Service with the Fund since 2006.

Purchase and Sale of Fund Shares

Tax Information

Payments to Broker-Dealers and Other Financial Intermediaries

Additional Investment Strategies and Policies

Changing the Fund’s Investment Objective and Policies

Investment Guidelines

Holding Other Kinds of Investments

Investing in Money Market Funds

Lending Securities

Portfolio Holdings Disclosure

In addition, more current information concerning the Fund’s portfolio holdings as of specified dates also may be disclosed on the Columbia Funds’ website.

Investing Defensively

Mailings to Households

Additional Information on Portfolio Turnover

A mutual fund that replaces, or turns over, more than 100% of its investments in a year is considered to have a high portfolio turnover rate. A high portfolio turnover rate can generate larger distributions of short-term capital gains to shareholders, which for individuals are generally taxable at higher rates than long-term capital gains for U.S. federal income tax purposes. A high portfolio turnover rate can also mean higher brokerage and other transaction costs, which could reduce a fund’s returns. In general, the greater the volume of buying and selling by a fund, the greater the impact that brokerage commissions will have on its returns. The Fund generally buys securities for capital appreciation, investment income or both. However, the Fund may sell securities regardless of how long they’ve been held. You’ll find the Fund’s portfolio turnover rate for its most recent fiscal year in the Fees and Expenses of the Fund — Portfolio Turnover section of this prospectus and portfolio turnover rates for prior fiscal years in the Financial Highlights section of this prospectus.

Management of the Fund

Primary Service Providers

The Adviser

Subadviser(s)

The SEC has issued an order that permits the Adviser, subject to the approval of the Board, to appoint an unaffiliated subadviser or to change the terms of a subadvisory agreement for the Fund without first obtaining shareholder approval. The order permits the Fund to add or to change unaffiliated subadvisers or to change the fees paid to subadvisers from time to time without the expense and delays associated with obtaining shareholder approval of the change. The Adviser and its affiliates may have other relationships, including significant financial relationships, with current or potential subadvisers or their affiliates, which may create certain conflicts of interest. When making recommendations to the Board to appoint or to change a subadviser, or to change the terms of a subadvisory agreement, the Adviser discloses to the Board the nature of any material relationships it has with a subadviser or its affiliates.

At present, the Adviser has not engaged any investment subadviser for the Fund.

Portfolio Managers

Leonard A. Aplet, CFA

Co-manager. Service with the Fund since 2004.

Gregory S. Liechty

Co-manager. Service with the Fund since 2010.

Ronald B. Stahl, CFA

Co-manager. Service with the Fund since 2006.

The Administrator

Annual Administration Fee,

as a % of Average Daily Net Assets


Columbia Short Term Bond Fund		0.14	%

The Distributor

The Transfer Agent

The Transfer Agent is a registered transfer agent and a wholly-owned subsidiary of Ameriprise Financial. The Transfer Agent’s responsibilities include processing purchases, sales and exchanges, calculating and paying distributions, keeping shareholder records, preparing account statements and providing customer service. The Fund pays the Transfer Agent monthly fees on a per-account basis. Fees paid to the Transfer Agent include reimbursements for certain out-of-pocket expenses and sub-transfer agency fees, subject to certain limitations, paid by the Transfer Agent on the Fund’s behalf.

Expense Reimbursement Arrangements

The Adviser has voluntarily agreed to reimburse a portion of the Fund’s expenses so that the Fund’s ordinary operating expenses (excluding any distribution and service fees, brokerage commissions, interest, taxes and extraordinary expenses, but including custodian charges relating to overdrafts, if any), after giving effect to any balance credits from the Fund’s custodian, do not exceed 0.48% of the Fund’s average daily net assets on an annualized basis. The Adviser, in its discretion, may revise or discontinue this arrangement at any time.

Other Roles and Relationships of Ameriprise Financial and its Affiliates—Certain Conflicts of Interest

Conflicts of interest and limitations that could affect a Columbia Fund may arise from, for example, the following:

•

compensation and other benefits received by the Adviser and other Ameriprise Financial affiliates related to the management/administration of a Columbia Fund and the sale of its shares;

•

separate and potentially divergent management of a Columbia Fund and other funds and accounts advised/managed by the Adviser and other Ameriprise Financial affiliates;

•

regulatory and other investment restrictions on investment activities of the Adviser and other Ameriprise Financial affiliates and accounts advised/managed by them;

•

insurance and other relationships of Ameriprise Financial affiliates with companies and other entities in which a Columbia Fund invests; and

•

regulatory and other restrictions relating to the sharing of information between Ameriprise Financial and its affiliates, including the Adviser, and a Columbia Fund.

Certain Legal Matters

Ameriprise Financial and certain of its affiliates have historically been involved in a number of legal, arbitration and regulatory proceedings, including routine litigation, class actions and governmental actions, concerning matters arising in connection with the conduct of their business activities. Ameriprise Financial believes that the Fund is not currently the subject of, and that neither Ameriprise Financial nor any of its affiliates is the subject of, any pending legal, arbitration or regulatory proceedings that are likely to have a material adverse effect on the Fund or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Fund. Information regarding certain pending and settled legal proceedings may be found in the Fund’s shareholder reports and in the SAI. Additionally, Ameriprise Financial is required to make 10-Q, 10-K and, as necessary, 8-K filings with the SEC on legal and regulatory matters that relate to Ameriprise Financial and its affiliates. Copies of these filings may be obtained by accessing the SEC website at www.sec.gov.

About Class Z Shares

Description of the Share Class

Share Class Features


		Class Z Shares
Eligible Investors and Minimum Initial Investments		Class Z shares are available only to certain eligible investors, which are subject to different minimum initial investment requirements. These minimum initial investment amounts range from $0 to $2,500. See Buying, Selling and Exchanging Shares – Opening an Account and Placing Orders for details.

Investment Limits		none

Conversion Features		none

Front-End Sales Charges		none

Contingent Deferred Sales Charges (CDSCs)		none

Maximum Distribution and Service Fees		none

FUNDamentals ^TM

Selling and/or Servicing Agents

The terms “selling agent” and “servicing agent” refer to the financial intermediary that employs your financial advisor. Selling and/or servicing agents include, for example, brokerage firms, banks, investment advisors, third party administrators and other financial intermediaries, including Ameriprise Financial and its affiliates.

Financial Intermediary Compensation

The Distributor and the Adviser make payments, from their own resources, to certain financial intermediaries, including other Ameriprise Financial affiliates, for marketing/sales support services relating to the Columbia Funds. Such payments are generally based upon one or more of the following factors: average net assets of the Columbia Funds sold by the Distributor attributable to that intermediary, gross sales of the Columbia Funds distributed by the Distributor attributable to that intermediary, reimbursement of ticket charges (fees that an intermediary firm charges its representatives for effecting transactions in Fund shares) or a negotiated lump sum payment. While the financial arrangements may vary for each intermediary, the support payments to any one intermediary are generally between 0.05% and 0.50% on an annual basis for payments based on average net assets of the Fund attributable to the intermediary, and between 0.05% and 0.25% on an annual basis for firms receiving a payment based on gross sales of the Columbia Funds attributable to the intermediary.

These payments for shareholder servicing support vary by financial intermediary but generally are not expected, with certain limited exceptions, to exceed 0.40% of the average aggregate value of the Fund’s shares in any financial intermediary’s program on an annual basis for those classes of shares that pay a service fee pursuant to a plan under Rule 12b-1 under the 1940 Act, and 0.45% of the average aggregate value of the Fund’s shares in any financial intermediary’s program on an annual basis for those classes of shares that do not pay a service fee pursuant to a plan under Rule 12b-1 under the 1940 Act.

Amounts paid by the Distributor and the Adviser and their affiliates are paid out of the Distributor’s and the Adviser’s own resources and do not increase the amount paid by you or the Fund. You can find further details about the payments made by the Distributor and the Adviser and their affiliates and the services provided by financial intermediaries as well as a list of the intermediaries to which the Distributor and the Adviser have agreed to make marketing support payments in the SAI. Your financial intermediary may charge you fees and commissions in addition to those described in this prospectus. You should consult with your financial intermediary and review carefully any disclosure your financial intermediary provides regarding its services and compensation. Depending on the financial arrangement in place at any particular time, a financial intermediary and its financial consultants may have a financial incentive for recommending the Fund or a particular share class over others. See Management of the Fund – Other Roles and Relationships of Ameriprise Financial and its Affiliates – Certain Conflicts of Interest for more information.

Buying, Selling and Exchanging Shares

Share Price Determination

FUNDamentals ^TM

NAV Calculation

Each of the Fund’s share classes calculates its NAV as follows:

Transaction Rules and Policies

Also remember that the Fund may refuse any order to buy or exchange shares. If this happens, we’ll return any money we’ve received, but no interest will be paid on that money.

Order Processing

FUNDamentals ^TM

Business Days

A business day is any day that the New York Stock Exchange (NYSE) is open. A business day ends at the close of regular trading on the NYSE, usually at 4:00 p.m. Eastern time. If the NYSE closes early, the business day ends as of the time the NYSE closes. On holidays and other days when the NYSE is closed, the Fund’s net asset value is not calculated and the Fund does not accept buy or sell orders. However, the value of the Fund’s assets may still be affected on such days to the extent that the Fund holds foreign securities that trade on days that foreign securities markets are open.

“Good Form”

An order is in “good form” if the Transfer Agent or your selling and/or servicing agent has all of the information and documentation it deems necessary to effect your order. For example, when you sell shares by letter of instruction, “good form” means that your letter has (i) complete instructions and the signatures of all account owners, (ii) a Medallion signature guarantee for amounts equal to or greater than $100,000 and (iii) any other required documents completed and attached. For the documents required for sales by corporations, agents, fiduciaries, surviving joint owners and other legal entities, call 800.345.6611.

Medallion Signature Guarantees

Written Transactions

Telephone Transactions

Telephone orders may not be as secure as written orders. Columbia Funds will take reasonable steps to confirm that telephone instructions are genuine. For example, we require proof of your identification before we will act on instructions received by telephone and may record telephone conversations. However, the Fund and its agents will not be responsible for any losses, costs or expenses resulting from an unauthorized telephone instruction when reasonable steps have been taken to confirm that telephone instructions are

genuine. Telephone orders may be difficult to complete during periods of significant economic or market change or business interruption.

Online Transactions

Once you have an account, contact Columbia Funds at 800.345.6611 for more information on account trading restrictions and the special sign-up procedures required for online transactions. The Transfer Agent has procedures in place to authenticate electronic orders you deliver through the internet. You will be required to accept the terms of an online agreement and to establish and utilize a password in order to access online account services.

You can sell up to an aggregate of $100,000 of shares through the internet in any 30-day period if you qualify for internet orders.

Customer Identification Program

Small Account Policy—Accounts Below $250

Small Account Policy—Minimum Balance Fee

Exceptions to the Above Small Account Policy (Accounts Below $250 and Minimum Balance Fee)

Small Account Policy—Broker/Dealer and Wrap Fee Accounts

Columbia Funds may automatically redeem shares at any time from broker/dealer networked accounts and wrap fee accounts that have account balances of $20 or less or that have less than one share.

Cash Flows

Information Sharing Agreements

As required by Rule 22c-2 under the 1940 Act, the Columbia Funds or certain of their service providers will enter into information sharing agreements with financial intermediaries, including participating life insurance companies and financial intermediaries that sponsor or offer retirement plans through which shares of the Columbia Funds are made available for purchase. Pursuant to Rule 22c-2, financial intermediaries are required, upon request, to: (i) provide shareholder account and transaction information and (ii) execute instructions from the Fund to restrict or prohibit further purchases of Fund shares by shareholders who have been identified by the Fund as having engaged in transactions that violate the Fund’s excessive trading policies and procedures. See Buying, Selling and Exchanging Shares – Excessive Trading Practices for more information.

Excessive Trading Practices

Some financial intermediaries apply their own restrictions or policies to underlying investor accounts, which may be more or less restrictive than those described here. This may impact the Fund’s ability to curtail excessive trading, even where it is identified. For these and other reasons, it is possible that excessive trading may occur despite the Fund’s efforts to detect and prevent it.

Risks of Excessive Trading – Excessive trading creates certain risks to the Fund’s long-term shareholders and may create the following adverse effects:

•

negative impact on the Fund’s performance;

•

potential dilution of the value of the Fund’s shares;

•

losses on the sale of investments resulting from the need to sell securities at less favorable prices;

•

increased taxable gains to the Fund’s remaining shareholders resulting from the need to sell securities to meet sell orders; and

•

increased brokerage and administrative costs.

Opening an Account and Placing Orders

Columbia Funds encourages you to consult with a financial advisor who can help you with your investment decisions and who can help you open an account. Once you have an account, you can buy, sell and exchange shares by contacting your financial advisor who will send your order to the Transfer Agent or your selling and/or servicing agent. As described in Buying, Selling and Exchanging Shares – Transaction Rules and Policies , once you have an account you can also communicate your orders directly to the Transfer Agent by mail, by telephone or online.

Buying Shares

Minimum Initial Investments

There is no minimum initial investment in Class Z shares for the following categories of eligible investors:

•

The minimum initial investment in Class Z shares for the following categories of eligible investors is $1,000:

•

The minimum initial investment in Class Z shares for the following categories of eligible investors is $2,500:

•

Any investor buying shares through a Columbia Management state tuition plan organized under Section 529 of the Internal Revenue Code.

•

Any trustee or director (or family member of a trustee or director) of a fund distributed by the Distributor.

•

Any employee (or family member of an employee) of Bank of America or one of its subsidiaries.

•

Any institutional investor who is a corporation, partnership, trust, foundation, endowment, institution, government

entity, or similar organization, which meets the respective qualifications for an accredited investor, as defined under the Securities Act of 1933.

•

For investors establishing a Systematic Investment Plan, the minimum initial investment is $50.

Minimum Additional Investments

There is no minimum additional investment for Class Z shares.

Systematic Investment Plan

Dividend Diversification

Wire Purchases

You may buy Class Z shares of the Fund by wiring money from your bank account to your Fund account by calling the Transfer Agent at 800.422.3737.

Electronic Funds Transfer

Other Purchase Rules You Should Know

•

Once the Transfer Agent or your selling and/or servicing agent receives your buy order in “good form,” your purchase will be made at the next calculated net asset value per share.

•

You generally buy Class Z shares at net asset value because no front-end sales charge applies to purchases of this share class.

•

Selling and/or servicing agents are responsible for sending your buy orders to the Transfer Agent and ensuring that we receive your money on time.

•

Shares bought are recorded on the books of the Fund. The Fund doesn’t issue certificates.

Selling Shares

When you sell your shares, the Fund is effectively buying them back from you. This is called a redemption.

Wire Redemptions

Electronic Funds Transfer

Systematic Withdrawal Plan

In-Kind Distributions

Other Redemption Rules You Should Know

•

Once the Transfer Agent or your selling and/or servicing agent receives your sell order in “good form,” your shares will be sold at the next calculated net asset value per share.

•

No interest will be paid on uncashed redemption checks.

•

Other restrictions may apply to retirement accounts. For information about these restrictions, contact your retirement plan administrator.

•

Also keep in mind Columbia Funds’ Small Account Policy, which is described above in Buying, Selling and Exchanging Shares – Transaction Rules and Policies .

Exchanging Shares

Systematic Exchanges

The rules described below for making exchanges apply to systematic exchanges.

Other Exchange Rules You Should Know

•

Exchanges are made at net asset value.

•

You can generally make exchanges between like share classes of any Columbia Fund. Some exceptions apply.

•

The rules for buying shares of a Columbia Fund generally apply to exchanges into that Fund.

•

You may make exchanges only into a Columbia Fund that is legally offered and sold in your state of residence.

•

You generally may make an exchange only into a Columbia Fund that is accepting investments.

•

The Fund may change or cancel your right to make an exchange by giving the amount of notice required by regulatory authorities (generally 60 days for a material change or cancellation).

•

Unless your account is part of a tax-advantaged arrangement, an exchange for shares of another fund is a taxable event, and you may recognize a gain or loss for tax purposes.

Distributions and Taxes

Distributions to Shareholders

A mutual fund can make money two ways:

•

It can earn income on its investments. Examples of fund income are interest paid on money market instruments and bonds, and dividends paid on common stocks.

•

FUNDamentals ^TM

Distributions

Declaration and Distribution Schedule


Declarations		daily
Distributions		monthly

The Fund may, however, pay distributions of net investment income more frequently.

Unless you are a tax-exempt investor or holding Fund shares through a tax-advantaged account (such as a 401(k) plan or IRA), you should consider avoiding buying Fund shares shortly before the Fund makes a distribution, other than distributions of net investment income that are declared daily, because doing so can cost you money in taxes. This is because you will, in effect, receive part of your purchase price back in the distribution. This is known as “buying a dividend.” To avoid “buying a dividend,” check the Fund’s distribution schedule online at www.columbiafunds.com, or by calling us at 800.345.6611, before you invest.

Taxes and Your Investment

The Fund will send you a statement each year showing how much you’ve received in distributions in the prior year and the distributions’ character for federal income tax purposes. The Fund expects that distributions will consist primarily of ordinary income. In addition, you should be aware of the following:

•

Distributions generally are taxable to you when paid, whether they are paid in cash or automatically reinvested in additional shares of the Fund.

•

FUNDamentals ^TM

Taxes

Financial Highlights

Columbia Short Term Bond Fund—Class Z Shares


	Year Ended March 31, 2010			Year Ended March 31, 2009			Year Ended March 31, 2008			Year Ended March 31, 2007			Year Ended March 31, 2006 ^(a)
Net Asset Value, Beginning of Period	$	[	]	$	9.87		$	9.82		$	9.73		$	9.80
Income from Investment Operations:
Net investment income ^(b)		[	]		0.45			0.46			0.42			0.33
Net realized and unrealized gain (loss) on investments and futures contracts		[	]		(0.43	)		0.06			0.09			(0.07	)
Total from investment operations		[	]		0.02			0.52			0.51			0.26
Less Distributions to Shareholders:
From net investment income		[	]		(0.44	)		(0.47	)		(0.42	)		(0.33	)
From net realized gains		[	]		—			—			—			—
Total distributions to shareholders		[	]		(0.44	)		(0.47	)		(0.42	)		(0.33	)
Increase from regulatory settlement		[	]		—	^(c)		—			—			—
Net Asset Value, End of Period	$	[	]	$	9.45		$	9.87		$	9.82		$	9.73
Total return ^(d)(e)		[	]%		0.27	%		5.39	%		5.39	%		2.73	%
Ratios to Average Net Assets/Supplemental Data:
Net expenses ^(f)		[	]%		0.48	%		0.48	%		0.48	%		0.47	%
Waiver/Reimbursement		[	]%		0.04	%		0.02	%		0.02	%		0.08	% ^(g)
Net investment income ^(f)		[	]%		4.68	%		4.67	%		4.29	%		3.40	%
Portfolio turnover rate		[	]%		58	%		58	%		72	%		80	%
Net assets, end of period (000’s)	$	[	]	$	1,133,563		$	1,092,555		$	857,655		$	1,130,604

^(a)	On August 22, 2005, the Fund’s Primary A shares were renamed Class Z shares.

^(b)	Per share data was calculated using the average shares outstanding during the period.

^(c)	Rounds to less than $0.01 per share.

^(d)	Total return at net asset value assuming all distributions reinvested.

^(e)	Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

^(f)	The benefits derived from expense reductions had an impact of less than 0.01%.

^(g)	Bank of America Corporation assumed certain non-recurring costs. Absent these non-recurring costs, the waiver/reimbursement ratio would have been 0.02% and 0.08% for the periods ended March 31, 2006, and March 31, 2005, respectively.

Hypothetical Fees and Expenses

The following supplemental hypothetical investment information provides additional information about the effect of the fees and expenses of the Fund, including investment advisory fees and other Fund costs, on the Fund’s returns over a 10-year period. The chart shows the estimated fees and expenses that would be charged on a hypothetical investment of $10,000 in Class Z shares of the Fund, assuming a 5% return each year, the cumulative return after fees and expenses and the hypothetical year-end balance after fees and expenses. The chart also assumes that all dividends and distributions are reinvested. The annual expense ratio used for the share class, which is the same as that stated in the Annual Fund Operating Expenses table, is presented in the chart and is net of any contractual fee waivers or expense reimbursements for the period of contractual commitment. Your actual costs may be higher or lower.

Columbia Short Term Bond Fund—Class Z Shares

Maximum Initial Sales Charge 0.00%

Initial Hypothetical Investment Amount
$10,000.00

Assumed Rate of Return 5%

Year

Cumulative Return
Before Fees and
Expenses

Annual Expense
Ratio

Cumulative Return
After Fees and
Expenses

Hypothetical Year-
End Balance After
Fees and Expenses

Annual Fees and
Expenses ^(a)

5.00

[

]

[

]

10.25

[

]

[

]

15.76

[

]

[

]

21.55

[

]

[

]

27.63

[

]

[

]

34.01

[

]

[

]

40.71

[

]

[

]

47.75

[

]

[

]

55.13

[

]

[

]

62.89

[

]

[

]

Total Gain After Fees and Expenses

[

]

Total Annual Fees and Expenses Paid

[

]

^(a)	Annual Fees and Expenses are calculated based on the average between the beginning and ending balance for each year. All information is calculated on an annual compounding basis.

LOGO

Columbia Short Term Bond Fund

Class Z Shares

Prospectus, August 1, 2010

For More Information


By Mail:		Columbia Funds c/o Columbia Management Investment Services Corp. P.O. Box 8081 Boston, MA 02266-8081

By Telephone:		800.345.6611

Online:		www.columbiafunds.com

Annual and Semi-Annual Reports to Shareholders

Shareholder Communications with the Board

Statement of Additional Information

The SAI provides more detailed information about the Fund and its policies. The SAI is legally part of this prospectus (incorporated by reference). A copy has been filed with the SEC.

Information Provided by the SEC

FUNDamentals™ is a trademark of Ameriprise Financial.

The investment company registration number of Columbia Funds Series Trust, of which the Fund is a series, is 811-09645.

One Financial Center, Boston, MA 02111-2621

800.345.6611 www.columbiafunds.com

INT-36/[ ]-0810

LOGO

Prospectus

August 1, 2010

Columbia Funds

Columbia Short Term Bond Fund

Ticker symbol

Class Y Shares CSBYX

Table of Contents



Columbia Short Term Bond Fund		3

Investment Objective		3

Fees and Expenses of the Fund		3

Principal Investment Strategies		5

Principal Risks		5

Performance Information		8

Investment Adviser and Portfolio Manager(s)		9

Purchase and Sale of Fund Shares		9

Tax Information		9

Payments to Broker-Dealers and Other Financial Intermediaries		9

Additional Investment Strategies and Policies		10

Management of the Fund		12

Primary Service Providers		12

Other Roles and Relationships of Ameriprise Financial and its Affiliates—Certain Conflicts of Interest		14

Certain Legal Matters		15

About Class Y Shares		16

Description of the Share Class		16

Financial Intermediary Compensation		17

Buying, Selling and Exchanging Shares		18

Share Price Determination		18

Transaction Rules and Policies		19

Opening an Account and Placing Orders		23

Distributions and Taxes		26

Financial Highlights		29

Hypothetical Fees and Expenses		30

Icons Guide

Investment Objective

Fees and Expenses of the Fund

Principal Investment Strategies

Principal Risks

Performance Information

Other Roles and Relationships of Ameriprise Financial and its Affiliates - Certain Conflicts of Interest

Columbia Short Term Bond Fund

Investment Objective

The Fund seeks current income, consistent with minimal fluctuation of principal.

Fees and Expenses of the Fund

This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.

Shareholder Fees (fees paid directly from your investment)


		Class Y Shares
Maximum sales charge (load) imposed on purchases, as a % of offering price		N/A
Maximum deferred sales charge (load) imposed on redemptions, as a % of the lower of the original purchase price or net asset value		N/A

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)


	Class Y Shares
Management fees	0.44	%
Distribution and/or service (Rule 12b-1) fees	0.00	%
Other expenses	[	]%
Total annual Fund operating expenses	[	]%

Example

The following example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds.

The example illustrates the hypothetical expenses that you would incur over the time periods indicated, and assumes that:

•

you invest $10,000 in Class Y shares of the Fund for the periods indicated,

•

your investment has a 5% return each year, and

•

the Fund’s total annual operating expenses remain the same as shown in the table above.

Based on the assumptions listed above, your costs would be:

1 year

3 years

5 years

10 years

Class Y Shares

[

]

[

]

[

]

[

]

Remember this is an example only . Your actual costs may be higher or lower.

Portfolio Turnover

Principal Investment Strategies

The Fund also may participate in mortgage dollar rolls up to the Fund’s then current position in mortgage-backed securities.

Principal Risks

•

Interest Rate Risk – Debt securities are subject to interest rate risk. In general, if prevailing interest rates rise, the values of debt securities will tend to fall, and if interest rates fall, the values of debt securities will tend to rise. Changes in the value of a debt security usually will not affect the amount of income the Fund receives from it but may affect the value of the Fund’s shares. Interest rate risk is generally greater for debt securities with longer maturities/durations.

•

guaranteed by the U.S. Treasury.

•

Dollar Rolls Risk – Dollar rolls are transactions in which the Fund sells securities to a counterparty and simultaneously agrees to purchase those or similar securities in the future at a predetermined price. Dollar rolls involve the risk that the market value of the securities the Fund is obligated to repurchase may decline below the repurchase price, or that the counterparty may default on its obligations. These transactions may also increase the Fund’s portfolio turnover rate. If the Fund reinvests the proceeds of the security sold, the Fund will also be subject to the risk that the investments purchased with such proceeds will decline in value (a form of leverage risk).

•

Mortgage-Backed Securities Risk – The value of the Fund’s mortgage-backed securities may be affected by, among other things, changes or perceived changes in: interest rates, factors concerning the interests in and structure of the issuer or the originator of the mortgages, the creditworthiness of the entities that provide any supporting letters of credit, surety bonds or other credit enhancements, or the market’s assessment of the quality of underlying assets. Mortgage-backed securities represent interests in, or are backed by, pools of mortgages from which payments of interest and principal (net of fees paid to the issuer or guarantor of the securities) are distributed to the holders of the mortgage-backed securities. Mortgage-backed securities can have a fixed or an adjustable rate. Payment of principal and interest on some mortgage-backed securities (but not the market value of the securities themselves) may be guaranteed (i) by the full faith and credit of the U.S. Government (in the case of securities guaranteed by the Government National Mortgage Association) or (ii) by its agencies, authorities, enterprises or instrumentalities (in the case of securities guaranteed by the Federal National Mortgage Association (FNMA) or the Federal Home Loan Mortgage Corporation (FHLMC)), which are not insured or guaranteed by the U.S. Government (although FNMA and FHLMC may be able to access capital from the U.S. Treasury to meet their obligations under such securities). Mortgage-backed securities issued by non-governmental issuers (such as commercial banks, savings and loan institutions, private mortgage insurance companies, mortgage bankers and other secondary market issuers) may be supported by various credit enhancements, such as pool insurance, guarantees issued by governmental entities, letters of credit from a bank or senior/subordinated structures, and may entail greater risk than obligations guaranteed by the U.S. Government, whether or not such obligations are guaranteed by the private issuer. Mortgage-backed securities are subject to prepayment risk, which is the possibility that the underlying mortgage may be refinanced or prepaid prior to maturity during periods of declining or low interest rates, causing the Fund to have to reinvest the money received in securities that have lower yields. In addition, the impact of prepayments on the value of mortgage-backed securities may be difficult to predict and may result in greater volatility. Rising or high interest rates tend to extend the duration of mortgage-backed securities, making them more volatile and more sensitive to changes in interest rates.

•

Asset-Backed Securities Risk – The value of the Fund’s asset-backed securities may be affected by, among other things, changes in: interest rates, factors concerning the interests in and structure of the issuer or the originator of the receivables, the creditworthiness of the entities that provide any supporting letters of credit, surety bonds or other credit enhancements, or the market’s assessment of the quality of underlying assets. Asset-backed securities represent interests in, or are backed by, pools of receivables such as credit card, auto, student and home equity loans. They may also be backed, in turn, by securities backed by these types of loans and others, such as mortgage loans. Asset-backed securities can have a fixed or an adjustable rate. Most asset-backed securities are subject to prepayment risk, which is the possibility that the underlying debt may be refinanced or prepaid prior to maturity during periods of declining or low interest rates, causing the Fund to have to reinvest the money received in securities that have lower yields. In addition, the impact of prepayments on the value of asset-backed securities may be difficult to predict and may result in greater volatility. Rising or high interest rates tend to extend the duration of asset-backed securities, making them more volatile and more sensitive to changes in interest rates.

•

Foreign Securities Risk – Foreign securities are subject to special risks as compared to securities of U.S. issuers. For example, foreign markets can be extremely volatile. Fluctuations in currency exchange rates may impact the value of foreign securities denominated in foreign currencies, or in U.S. dollars, without a change in the intrinsic value of those securities. Foreign securities may be less liquid than domestic securities so that the Fund may, at times, be unable to sell foreign securities at desirable times or prices. Brokerage commissions, custodial fees and other fees are also generally higher for foreign securities. The Fund may have limited or no legal recourse in the event of default with respect to certain foreign securities, including those issued by foreign governments. In addition, foreign governments may impose potentially confiscatory withholding or other taxes, which could reduce the amount of income and capital gains available to distribute to shareholders. Other risks include possible delays in the settlement of transactions or in the payment of income; generally less publicly available information about companies; the impact of political, social or diplomatic events; possible seizure, expropriation or nationalization of a company or its assets; possible imposition of currency exchange controls; and accounting, auditing and financial reporting standards that may be less comprehensive and stringent than those applicable to domestic companies.

•

Liquidity Risk – Illiquid securities are securities that cannot be readily disposed of in the normal course of business. There is a risk that the Fund may not be able to sell such securities at the time it desires, or that it cannot sell such securities without adversely affecting their price.

•

Performance Information

The following bar chart and table show you how the Fund has performed in the past, and can help you understand the risks of investing in the Fund. The returns shown include the returns of Class Z shares for periods prior to July 15, 2009, the date on which Class Y shares were initially offered by the Fund. Class Z shares, which are not offered in this prospectus, would have annual returns substantially similar to those of Class Y shares because they are invested in the same portfolio of securities. The returns shown have not been adjusted to reflect any differences in expenses between Class Y and Class Z shares. The Fund’s past performance (before or after taxes) is no guarantee of how the Fund will perform in the future.

Year by Year Total Return (%) as of December 31 Each Year*

The bar chart below shows you how the performance of the Fund’s Class Y shares has varied from year to year.

LOGO

*	Year-to-date return as of June 30, 2010: [ ]%

Best and Worst Quarterly Returns During this Period


Best:	[ ] quarter [ ]:	[ ]%
Worst:	[ ] quarter [ ]:	[ ]%

Average Annual Total Return as of December 31, 2009


	1 year		5 years		10 years
Class Y shares returns before taxes	[	]%	[	]%	[	]%
Class Y shares returns after taxes on distributions	[	]%	[	]%	[	]%
Class Y shares returns after taxes on distributions and sale of Fund shares	[	]%	[	]%	[	]%
Barclays Capital 1-3 Year Government/Credit Index (reflects no deductions for fees, expenses or taxes)	[	]%	[	]%	[	]%

Investment Adviser and Portfolio Manager(s)

Investment Adviser

Columbia Management Investment Advisers, LLC

Portfolio Managers

Leonard A. Aplet, CFA

Co-manager. Service with the Fund since 2004.

Gregory S. Liechty

Co-manager. Service with the Fund since 2010.

Ronald B. Stahl, CFA

Co-manager. Service with the Fund since 2006.

Purchase and Sale of Fund Shares

You may purchase or redeem shares of the Fund on any business day on the Columbia Funds’ website at www.columbiafunds.com, by mail (Columbia Funds, c/o Columbia Management Investment Services Corp., P.O. Box 8081, Boston, MA 02266-8081) or by telephone at 800.422.3737. Shares may be purchased by electronic funds transfer, by check or by wire. Class Y shares are available only to the following categories of investors (i) individual investors and institutional clients (endowments, foundations, defined benefit plans, etc.) who invest at least $1 million in Class Y shares of a single Fund and (ii) group retirement plans (including 401(k) plans, 457 plans, employer sponsored 403(b) plans, profit sharing and money purchase plans) with plan assets of at least $10 million. Currently, Class Y shares are offered only to certain former shareholders of the Funds of Columbia Funds Institutional Trust and to institutional and high net worth individuals and clients invested in certain pooled investment vehicles and separate accounts managed by the Adviser. See Buying, Selling and Exchanging Shares – Opening an Account and Placing Orders for details. There is no minimum additional investment for Class Y shares. You may receive redemption proceeds by electronic funds transfer, by check or by wire.

Tax Information

The Fund normally distributes net investment income and net realized capital gains, if any, to shareholders. These distributions are generally taxable to you as ordinary income or capital gains, unless you are a tax exempt investor or otherwise investing through a tax-advantaged arrangement (such as a 401(k) plan).

Payments to Broker-Dealers and Other Financial Intermediaries

Additional Investment Strategies and Policies

Changing the Fund’s Investment Objective and Policies

Investment Guidelines

Holding Other Kinds of Investments

Investing in Money Market Funds

Lending Securities

Portfolio Holdings Disclosure

In addition, more current information concerning the Fund’s portfolio holdings as of specified dates also may be disclosed on the Columbia Funds’ website.

Investing Defensively

Mailings to Households

Additional Information on Portfolio Turnover

A mutual fund that replaces, or turns over, more than 100% of its investments in a year is considered to have a high portfolio turnover rate. A high portfolio turnover rate can generate larger distributions of short-term capital gains to shareholders, which for individuals are generally taxable at higher rates than long-term capital gains for U.S. federal income tax purposes. A high portfolio turnover rate can also mean higher brokerage and other transaction costs, which could reduce a fund’s returns. In general, the greater the volume of buying and selling by a fund, the greater the impact that brokerage commissions will have on its returns. The Fund generally buys securities for capital appreciation, investment income or both. However, the Fund may sell securities regardless of how long they’ve been held. You’ll find the Fund’s portfolio turnover rate for its most recent fiscal year in the Fees and Expenses of the Fund – Portfolio Turnover section of this prospectus and portfolio turnover rates for prior fiscal years in the Financial Highlights section of this prospectus.

Management of the Fund

Primary Service Providers

The Adviser

Subadviser(s)

The SEC has issued an order that permits the Adviser, subject to the approval of the Board, to appoint an unaffiliated subadviser or to change the terms of a subadvisory agreement for the Fund without first obtaining shareholder approval. The order permits the Fund to add or to change unaffiliated subadvisers or to change the fees paid to subadvisers from time to time without the expense and delays associated with obtaining shareholder approval of the change. The Adviser and its affiliates may have other relationships, including significant financial relationships, with current or potential subadvisers or their affiliates, which may create certain conflicts of interest. When making recommendations to the Board to appoint or to change a subadviser, or to change the terms of a subadvisory agreement, the Adviser discloses to the Board the nature of any material relationships it has with a subadviser or its affiliates.

At present, the Adviser has not engaged any investment subadviser for the Fund.

Portfolio Managers

Leonard A. Aplet, CFA

Co-manager. Service with the Fund since 2004.

Gregory S. Liechty

Co-manager. Service with the Fund since 2010.

Ronald B. Stahl, CFA

Co-manager. Service with the Fund since 2006.

The Administrator

Annual Administration Fee,

as a % of Average Daily Net Assets


Columbia Short Term Bond Fund		0.14	%

The Distributor

The Transfer Agent

The Transfer Agent is a registered transfer agent and a wholly-owned subsidiary of Ameriprise Financial. The Transfer Agent’s responsibilities include processing purchases, sales and exchanges, calculating and paying distributions, keeping shareholder records, preparing account statements and providing customer service. Class Y shares of the Fund pay the Transfer Agent monthly fees on a per-account basis. Fees paid to the Transfer Agent include reimbursements for certain out-of-pocket expenses, subject to certain limitations, paid by the Transfer Agent on the Fund’s behalf.

Expense Reimbursement Arrangements

The Adviser has voluntarily agreed to reimburse a portion of the Fund’s expenses so that the Fund’s ordinary operating expenses (excluding any distribution and service fees, brokerage commissions, interest, taxes and extraordinary expenses, but including custodian charges relating to overdrafts, if any), after giving effect to any balance credits from the Fund’s custodian, do not exceed 0.48% of the Fund’s average daily net assets on an annualized basis. The Adviser, in its discretion, may revise or discontinue this arrangement at any time.

Other Roles and Relationships of Ameriprise Financial and its Affiliates—Certain Conflicts of Interest

Conflicts of interest and limitations that could affect a Columbia Fund may arise from, for example, the following:

•

compensation and other benefits received by the Adviser and other Ameriprise Financial affiliates related to the management/administration of a Columbia Fund and the sale of its shares;

•

separate and potentially divergent management of a Columbia Fund and other funds and accounts advised/managed by the Adviser and other Ameriprise Financial affiliates;

•

regulatory and other investment restrictions on investment activities of the Adviser and other Ameriprise Financial affiliates and accounts advised/managed by them;

•

insurance and other relationships of Ameriprise Financial affiliates with companies and other entities in which a Columbia Fund invests; and

•

regulatory and other restrictions relating to the sharing of information between Ameriprise Financial and its affiliates, including the Adviser, and a Columbia Fund.

Certain Legal Matters

Ameriprise Financial and certain of its affiliates have historically been involved in a number of legal, arbitration and regulatory proceedings, including routine litigation, class actions and governmental actions, concerning matters arising in connection with the conduct of their business activities. Ameriprise Financial believes that the Fund is not currently the subject of, and that neither Ameriprise Financial nor any of its affiliates is the subject of, any pending legal, arbitration or regulatory proceedings that are likely to have a material adverse effect on the Fund or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Fund. Information regarding certain pending and settled legal proceedings may be found in the Fund’s shareholder reports and in the SAI. Additionally, Ameriprise Financial is required to make 10-Q, 10-K and, as necessary, 8-K filings with the SEC on legal and regulatory matters that relate to Ameriprise Financial and its affiliates. Copies of these filings may be obtained by accessing the SEC website at www.sec.gov.

About Class Y Shares

Description of the Share Class

Share Class Features

The Fund offers one class of shares in this prospectus: Class Y shares . The Fund may also offer other classes of shares through a separate prospectus. Each share class has its own investment eligibility criteria, cost structure and other features. The following summarizes the primary features of the Class Y shares offered by this prospectus. Contact your financial advisor or Columbia Funds for more information about the Fund’s share classes and how to choose among them.


		Class Y Shares
Eligible Investors and Minimum Initial Investments		Class Y shares are available only to the following categories of investors: (i) individual investors and institutional clients (endowments, foundations, defined benefit plans, etc.) who invest at least $1 million in Class Y shares of a single Fund and (ii) group retirement plans (including 401(k) plans, 457 plans, employer-sponsored 403(b) plans, profit sharing and money purchase plans) with plan assets of at least $10 million. Currently, Class Y shares are offered only to certain former shareholders of the Funds of Columbia Funds Institutional Trust and to institutional and high net worth individuals and clients invested in certain pooled investment vehicles and separate accounts managed by the Adviser. See Buying, Selling and Exchanging Shares – Opening an Account and Placing Orders for details.

Investment Limits		none

Conversion Features		none

Front-End Sales Charges		none

Contingent Deferred Sales Charges (CDSCs)		none

Maximum Distribution and Service Fees		none

FUNDamentals ^TM

Selling and/or Servicing Agents

The terms “selling agent” and “servicing agent” refer to the financial intermediary that employs your financial advisor. Selling and/or servicing agents include, for example, brokerage firms, banks, investment advisors, third party administrators and other financial intermediaries, including Ameriprise Financial and its affiliates.

Financial Intermediary Compensation

The Distributor, the Transfer Agent and the Adviser may also make payments to financial intermediaries, including other Ameriprise Financial affiliates, that provide shareholder services to retirement plans and other investment programs to compensate those intermediaries for services they provide to such programs, including, but not limited to, sub-accounting, sub-transfer agency, similar shareholder or participant recordkeeping, shareholder or participant reporting, or shareholder or participant transaction processing. These payments for shareholder servicing support vary by financial intermediary.

The Distributor and the Adviser may make other payments or allow promotional incentives to broker/dealers to the extent permitted by SEC and Financial Industry Regulatory Authority (FINRA) rules and by other applicable laws and regulations.

Amounts paid by the Distributor and the Adviser and their affiliates are paid out of the Distributor’s and the Adviser’s own resources and do not increase the amount paid by you or the Fund. You can find further details about the payments made by the Distributor and the Adviser and their affiliates and the services provided by financial intermediaries in the SAI. Your financial intermediary may charge you fees and commissions in addition to those described in this prospectus. You should consult with your financial intermediary and review carefully any disclosure your financial intermediary provides regarding its services and compensation. Depending on the financial arrangement in place at any particular time, a financial intermediary and its financial consultants may have a financial incentive for recommending the Fund or a particular share class over others. See Management of the Fund – Other Roles and Relationships of Ameriprise Financial and its Affiliates – Certain Conflicts of Interest for more information.

Buying, Selling and Exchanging Shares

Share Price Determination

FUNDamentals ^TM

NAV Calculation

Each of the Fund’s share classes calculates its NAV as follows:


		(Value of assets of the share class)
NAV =		—(Liabilities of the share class)
		Number of outstanding shares of the class

Transaction Rules and Policies

You should also ask your selling and/or servicing agent about its rules, fees and policies for buying, selling and exchanging shares, which may be different from those described here, and about its related programs or services.

Also remember that the Fund may refuse any order to buy or exchange shares. If this happens, we’ll return any money we’ve received, but no interest will be paid on that money.

Order Processing

FUNDamentals ^TM

Business Days

A business day is any day that the New York Stock Exchange (NYSE) is open. A business day ends at the close of regular trading on the NYSE, usually at 4:00 p.m. Eastern time. If the NYSE closes early, the business day ends as of the time the NYSE closes. On holidays and other days when the NYSE is closed, the Fund’s net asset value is not calculated and the Fund does not accept buy or sell orders. However, the value of the Fund’s assets may still be affected on such days to the extent that the Fund holds foreign securities that trade on days that foreign securities markets are open.

“Good Form”

An order is in “good form” if the Transfer Agent or your selling and/or servicing agent has all of the information and documentation it deems necessary to effect your order. For example, when you sell shares by letter of instruction, “good form” means that your letter has (i) complete instructions and the signatures of all account owners, (ii) a Medallion signature guarantee for amounts equal to or greater than $100,000 and (iii) any other required documents completed and attached. For the documents required for sales by corporations, agents, fiduciaries, surviving joint owners and other legal entities, call 800.345.6611.

Medallion Signature Guarantees

Written Transactions

Telephone Transactions

Telephone orders may not be as secure as written orders. Columbia Funds will take reasonable steps to confirm that telephone instructions are genuine. For example, we require proof of your identification before we will act on instructions received by telephone and may record telephone conversations. However, the Fund and its agents will not be responsible for any losses, costs or expenses resulting from an unauthorized telephone instruction when reasonable steps have been taken to confirm that telephone instructions are genuine. Telephone orders may be difficult to complete during

periods of significant economic or market change or business interruption.

Online Transactions

Once you have an account, contact Columbia Funds at 800.345.6611 for more information on account trading restrictions and the special sign-up procedures required for online transactions. The Transfer Agent has procedures in place to authenticate electronic orders you deliver through the internet. You will be required to accept the terms of an online agreement and to establish and utilize a password in order to access online account services.

You can sell up to an aggregate of $100,000 of shares through the internet in any 30-day period if you qualify for internet orders.

Customer Identification Program

Cash Flows

Information Sharing Agreements

As required by Rule 22c-2 under the 1940 Act, the Columbia Funds or certain of their service providers will enter into information sharing agreements with financial intermediaries, including participating life insurance companies and financial intermediaries that sponsor or offer retirement plans through which shares of the Columbia Funds are made available for purchase. Pursuant to Rule 22c-2, financial intermediaries are required, upon request, to: (i) provide shareholder account and transaction information and (ii) execute instructions from the Fund to restrict or prohibit further purchases of Fund shares by shareholders who have been identified by the Fund as having engaged in transactions that violate the Fund’s excessive trading policies and procedures. See Buying, Selling and Exchanging Shares – Excessive Trading Practices for more information.

Excessive Trading Practices

These limits generally do not apply to automated transactions or transactions by registered investment companies that invest in the Fund using a “fund of funds” structure. These limits do not apply to payroll deduction contributions by retirement plan participants, transactions initiated by a retirement plan sponsor or certain other retirement plan transactions consisting of rollover transactions, loan repayments and disbursements, and required minimum distribution redemptions. They may be modified or rescinded for accounts held by certain retirement plans to conform to plan limits, for considerations relating to the Employee Retirement Income Security Act of 1974 or regulations of the Department of Labor, and for certain asset allocation or wrap programs. Accounts known to be under common ownership or control generally will be counted together, but accounts maintained or managed by a common intermediary generally will not be considered to be under common ownership or control. The Fund retains the right to modify these restrictions at any time without prior notice to shareholders.

Some financial intermediaries apply their own restrictions or policies to underlying investor accounts, which may be more or less restrictive than those described here. This may impact the Fund’s ability to curtail excessive trading, even where it is identified. For these and other reasons, it is possible that excessive trading may occur despite the Fund’s efforts to detect and prevent it.

Risks of Excessive Trading – Excessive trading creates certain risks to the Fund’s long-term shareholders and may create the following adverse effects:

•

negative impact on the Fund’s performance;

•

potential dilution of the value of the Fund’s shares;

•

losses on the sale of investments resulting from the need to sell securities at less favorable prices;

•

increased taxable gains to the Fund’s remaining shareholders resulting from the need to sell securities to meet sell orders; and

•

increased brokerage and administrative costs.

Opening an Account and Placing Orders

Columbia Funds encourages you to consult with a financial advisor who can help you with your investment decisions and who can help you open an account. Once you have an account, you can buy, sell and exchange shares by contacting your financial advisor who will send your order to the Transfer Agent or your selling and/or servicing agent. As described in Buying, Selling and Exchanging Shares – Transaction Rules and Policies , once you have an account you can also communicate your orders directly to the Transfer Agent by mail, by telephone or online.

Buying Shares

Once you have opened an account, you can buy Class Y shares in a lump sum by check, by dividend diversification, by wire or by electronic funds transfer. Class Y shares are only available to the categories of eligible investors described below.

Eligible Investors and Minimum Initial Investments

Class Y shares are available only to the following categories of eligible investors:

•

Individual investors and institutional clients (endowments, foundations, defined benefit plans, etc.) who invest at least $1 million in Class Y shares of a single Fund.

•

Group retirement plans (including 401(k) plans, 457 plans, employer-sponsored 403(b) plans, profit sharing and money purchase plans) with plan assets of at least $10 million.

Currently, Class Y shares are offered only to certain former shareholders of the Funds of Columbia Funds Institutional Trust and to institutional and high net worth individuals and clients invested in certain pooled investment vehicles and separate accounts managed by the Adviser.

Minimum Additional Investments

There is no minimum additional investment for Class Y shares.

Dividend Diversification

Wire Purchases

You may buy Class Y shares of the Fund by wiring money from your bank account to your Fund account by calling the Transfer Agent at 800.422.3737.

Electronic Funds Transfer

You may buy Class Y shares of the Fund by electronically transferring money from your bank account to your Fund account by calling the Transfer Agent at 800.422.3737. An electronic funds transfer may take up to three business days to settle and be considered in “good form.” You must set up this feature by contacting the Transfer Agent prior to your request to obtain any necessary forms.

Other Purchase Rules You Should Know

•

Once the Transfer Agent or your selling and/or servicing agent receives your buy order in “good form,” your purchase will be made at the next calculated net asset value per share.

•

You generally buy Class Y shares at net asset value per share because no front-end sales charge applies to purchases of this share class.

•

Selling and/or servicing agents are responsible for sending your buy orders to the Transfer Agent and ensuring that we receive your money on time.

•

Shares bought are recorded on the books of the Fund. The Fund doesn’t issue certificates.

Selling Shares

When you sell your shares, the Fund is effectively buying them back from you. This is called a redemption.

Wire Redemptions

You may request that your Class Y shares sale proceeds be wired to your bank account by calling the Transfer Agent at 800.422.3737. You must set up this feature prior to your request. For shares sold by Fedwire, there is generally a fee of $7.50. The receiving bank may charge an additional fee. The Transfer Agent may waive the fee for certain accounts. The minimum amount that can be redeemed by wire is $500.

Electronic Funds Transfer

You may sell Class Y shares of the Fund and request that the proceeds be electronically transferred to your bank account by calling the Transfer Agent at 800.422.3737. It may take up to three business days for the sale proceeds to be received by your bank. You must set up this feature by contacting the Transfer Agent prior to your request to obtain any necessary forms.

Systematic Withdrawal Plan

The Systematic Withdrawal Plan lets you withdraw funds from your Class Y shares account any day of the month on a monthly, quarterly or semi-annual basis. Contact the Transfer Agent or your financial advisor to set up the plan. Your account balance generally must be at least $5,000 to set up the plan, but certain fee-based and wrap accounts are not subject to this requirement. All dividend and capital gain distributions must be reinvested to set up the plan. A Systematic Withdrawal Plan cannot be set up on an account that already has a Systematic Investment Plan established. If you set up the plan after you’ve opened your account, we may require your signature to be Medallion guaranteed.

In-Kind Distributions

Other Redemption Rules You Should Know

•

Once the Transfer Agent or your selling and/or servicing agent receives your sell order in “good form,” your shares will be sold at the next calculated net asset value per share.

•

No interest will be paid on uncashed redemption checks.

•

Other restrictions may apply to retirement accounts. For information about these restrictions, contact your retirement plan administrator.

Exchanging Shares

Systematic Exchanges

You may buy Class Y shares of the Fund by exchanging $100 or more each month from another Columbia Fund for shares of the same class of the Fund at no additional cost. Contact the Transfer Agent or your financial advisor to set up the plan. If you set up your plan to exchange more than $100,000 each month, you must have your signature Medallion guaranteed.

Exchanges will continue as long as your balance is sufficient to complete the systematic monthly transfers. You may terminate the program or change the amount you would like to exchange (subject to the $100 minimum) by calling Columbia Funds at 800.345.6611.

The rules described below for making exchanges apply to systematic exchanges.

Other Exchange Rules You Should Know

•

Exchanges are made at net asset value.

•

You can generally make exchanges between like share classes of any Columbia Fund. Some exceptions apply.

•

The rules for buying shares of a Columbia Fund generally apply to exchanges into that Fund.

•

You may make exchanges only into a Columbia Fund that is legally offered and sold in your state of residence.

•

You generally may make an exchange only into a Columbia Fund that is accepting investments.

•

The Fund may change or cancel your right to make an exchange by giving the amount of notice required by regulatory authorities (generally 60 days for a material change or cancellation).

•

Unless your account is part of a tax-advantaged arrangement, an exchange for shares of another fund is a taxable event, and you may recognize a gain or loss for tax purposes.

Distributions and Taxes

Distributions to Shareholders

A mutual fund can make money two ways:

•

It can earn income on its investments. Examples of fund income are interest paid on money market instruments and bonds, and dividends paid on common stocks.

•

FUNDamentals ^TM

Distributions

Declaration and Distribution Schedule


Declarations		daily
Distributions		monthly

The Fund may, however, pay distributions of net investment income more frequently.

Unless you are a tax-exempt investor or holding Fund shares through a tax-advantaged account (such as a 401(k) plan or IRA), you should consider avoiding buying Fund shares shortly before the Fund makes a distribution, other than distributions of net investment income that are declared daily, because doing so can cost you money in taxes. This is because you will, in effect, receive part of your purchase price back in the distribution. This is known as “buying a dividend.” To avoid “buying a dividend,” check the Fund’s distribution schedule online at www.columbiafunds.com, or by calling us at 800.345.6611, before you invest.

Taxes and Your Investment

The Fund will send you a statement each year showing how much you’ve received in distributions in the prior year and the distributions’ character for federal income tax purposes. The Fund expects that distributions will consist primarily of ordinary income. In addition, you should be aware of the following:

•

Distributions generally are taxable to you when paid, whether they are paid in cash or automatically reinvested in additional shares of the Fund.

•

FUNDamentals ^TM

Taxes

Financial Highlights

Columbia Short Term Bond Fund—Class Y Shares


	Period Ended March 31, 2010
Net Asset Value, Beginning of Period	$	[	]
Income from Investment Operations:
Net investment income		[	]
Net realized and unrealized gain (loss) on investments and futures contracts		[	]
Total from investment operations		[	]
Less Distributions to Shareholders:
From net investment income		[	]
From net realized gains		[	]
Total distributions to shareholders		[	]
Increase from regulatory settlement		[	]
Net Asset Value, End of Period	$	[	]
Total return		[	]%
Ratios to Average Net Assets/Supplemental Data:
Net expenses		[	]%
Waiver/Reimbursement		[	]%
Net investment income		[	]%
Portfolio turnover rate		[	]%
Net assets, end of period (000’s)	$	[	]

Hypothetical Fees and Expenses

The following supplemental hypothetical investment information provides additional information about the effect of the fees and expenses of the Fund, including investment advisory fees and other Fund costs, on the Fund’s returns over a 10-year period. The chart shows the estimated fees and expenses that would be charged on a hypothetical investment of $10,000 in Class Y shares of the Fund, assuming a 5% return each year, the cumulative return after fees and expenses and the hypothetical year-end balance after fees and expenses. The chart also assumes that all dividends and distributions are reinvested. The annual expense ratio used for the share class, which is the same as that stated in the Annual Fund Operating Expenses table, is presented in the chart and is net of any contractual fee waivers or expense reimbursements for the period of contractual commitment. Your actual costs may be higher or lower.

Columbia Short Term Bond Fund—Class Y Shares

Maximum Initial Sales Charge 0.00%

Initial Hypothetical Investment Amount
$10,000.00

Assumed Rate of Return 5%

Year

Cumulative Return
Before Fees and
Expenses

Annual Expense
Ratio

Cumulative Return
After Fees and
Expenses

Hypothetical Year-
End Balance After
Fees and Expenses

Annual Fees and
Expenses ^(a)

5.00

[

]

[

]

10.25

[

]

[

]

15.76

[

]

[

]

21.55

[

]

[

]

27.63

[

]

[

]

34.01

[

]

[

]

40.71

[

]

[

]

47.75

[

]

[

]

55.13

[

]

[

]

62.89

[

]

[

]

Total Gain After Fees and Expenses

[

]

Total Annual Fees and Expenses Paid

[

]

^(a)	Annual Fees and Expenses are calculated based on the average between the beginning and ending balance for each year. All information is calculated on an annual compounding basis.

LOGO

Columbia Short Term Bond Fund

Class Y Shares

Prospectus, August 1, 2010

For More Information


By Mail:		Columbia Funds c/o Columbia Management Investment Services Corp. P.O. Box 8081 Boston, MA 02266-8081

By Telephone:		800.345.6611

Online:		www.columbiafunds.com

Annual and Semi-Annual Reports to Shareholders

Shareholder Communications with the Board

Statement of Additional Information

The SAI provides more detailed information about the Fund and its policies. The SAI is legally part of this prospectus (incorporated by reference). A copy has been filed with the SEC.

Information Provided by the SEC

FUNDamentals™ is a trademark of Ameriprise Financial.

The investment company registration number of Columbia Funds Series Trust, of which the Fund is a series, is 811-09645.

One Financial Center, Boston, MA 02111-2621

800.345.6611 www.columbiafunds.com

INT-36/[ ]-0810

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Prospectus

August 1, 2010

Columbia Funds

Columbia Total Return Bond Fund


Ticker symbols
Class A Shares NSFAX
Class B Shares NSFNX
Class C Shares NSFCX

Table of Contents


Columbia Total Return Bond Fund		3

Investment Objective		3

Fees and Expenses of the Fund		3

Principal Investment Strategies		5

Principal Risks		5

Performance Information		9

Investment Adviser and Portfolio Manager(s)		10

Purchase and Sale of Fund Shares		10

Tax Information		10

Payments to Broker-Dealers and Other Financial Intermediaries		10

Additional Investment Strategies and Policies		11

Management of the Fund		13

Primary Service Providers		13

Other Roles and Relationships of Ameriprise Financial and its Affiliates—Certain Conflicts of Interest		15

Certain Legal Matters		16

Choosing a Share Class		17

Comparison of the Share Classes		17

Sales Charges and Commissions		18

Reductions/Waivers of Sales Charges		22

Distribution and Service Fees		24

Financial Intermediary Compensation		25

Buying, Selling and Exchanging Shares		26

Share Price Determination		26

Transaction Rules and Policies		27

Opening an Account and Placing Orders		31

Distributions and Taxes		35

Financial Highlights		38

Hypothetical Fees and Expenses		41

Icons Guide



		Investment Objective

		Fees and Expenses of the Fund

		Principal Investment Strategies

		Principal Risks

		Performance Information

		Other Roles and Relationships of Ameriprise Financial and its Affiliates - Certain Conflicts of Interest

Columbia Total Return Bond Fund

Investment Objective

The Fund seeks total return, consisting of current income and capital appreciation.

Fees and Expenses of the Fund

This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $50,000 in Class A shares of eligible Columbia Funds. More information about these and other discounts is available from your financial advisor, in the Choosing a Share Class section beginning on page 17 of this prospectus and in the Purchase, Redemption and Pricing of Shares section of the Statement of Additional Information.

Shareholder Fees (fees paid directly from your investment)


	Class A Shares		Class B Shares		Class C Shares
Maximum sales charge (load) imposed on purchases, as a % of offering price	3.25	%	N/A		N/A
Maximum deferred sales charge (load) imposed on redemptions, as a % of the lower of the original purchase price or net asset value	1.00	% ^(a)	3.00	% ^(b)	1.00	% ^(c)

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)


	Class A Shares		Class B Shares		Class C Shares
Management fees	0.51	%	0.51	%	0.51	%
Distribution and/or service (Rule 12b-1) fees	0.25	%	1.00	%	1.00	%
Other expenses	[ ]	%	[ ]	%	[ ]	%
Total annual Fund operating expenses	[ ]	%	[ ]	%	[ ]	%

^(a)	This charge applies to investors who buy $1 million or more of Class A shares and redeem them within one year of purchase, with certain limited exceptions.

^(b)	This charge decreases over time.

^(c)	This charge applies to investors who buy Class C shares and redeem them within one year of purchase, with certain limited exceptions.

Example

•

you invest $10,000 in Class A, Class B or Class C shares of the Fund for the periods indicated,

•

your investment has a 5% return each year, and

•

the Fund’s total annual operating expenses remain the same as shown in the table above.

Based on the assumptions listed above, your costs would be:

1 year

3 years

5 years

10 years

Class A Shares

[ ]

Class B Shares

Assuming no redemption of shares

[ ]

Assuming complete redemption of shares at the end of the period

[ ]

Class C Shares

Assuming no redemption of shares

[ ]

Assuming complete redemption of shares at the end of the period

[ ]

Remember this is an example only. Your actual costs may be higher or lower.

Portfolio Turnover

Principal Investment Strategies

Under normal circumstances, the Fund invests at least 80% of its net assets in bonds, including debt securities issued by the U.S. Government and its agencies, debt securities issued by corporations, mortgage- and other asset-backed securities, and dollar-denominated securities issued by foreign governments, companies or other entities. The Fund normally invests at least 65% of its total assets in securities that, at the time of purchase, are rated investment grade or are unrated but determined by Columbia Management Investment Advisers, LLC, the Fund’s investment adviser (the Adviser), to be of comparable quality. The Fund may invest up to 20% of its total assets in securities that, at the time of purchase, are rated below investment grade or are unrated but determined by the Advisor to be of comparable quality, which are commonly referred to as “junk bonds.” The Fund also may invest up to 20% of its total assets in non-U.S. dollar denominated foreign debt securities. Under normal circumstances, the Fund’s dollar-weighted average effective maturity will be between three and ten years.

The Fund also may participate in mortgage dollar rolls up to the Fund’s then current position in mortgage-backed securities.

The Fund’s investment strategy may involve the frequent trading of portfolio securities. This may cause the Fund to incur higher transaction costs (which may adversely affect the Fund’s performance) and may increase taxable distributions for shareholders.

Principal Risks

•

Interest Rate Risk – Debt securities are subject to interest rate risk. In general, if prevailing interest rates rise, the values of debt securities will tend to fall, and if interest rates fall, the values of debt securities will tend to rise. Changes in the value of a debt security usually will not affect the amount of income the Fund receives from it but may affect the value of the Fund’s shares. Interest rate risk is generally greater for debt securities with longer maturities/durations.

•

instrumentalities or enterprises may or may not be backed by the full faith and credit of the U.S. Government. For example, securities issued by the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association and the Federal Home Loan Banks are neither insured nor guaranteed by the U.S. Government. These securities may be supported by the ability to borrow from the U.S. Treasury or only by the credit of the issuing agency, authority, instrumentality or enterprise and, as a result, are subject to greater credit risk than securities issued or guaranteed by the U.S. Treasury.

•

Foreign Securities Risk – Foreign securities are subject to special risks as compared to securities of U.S. issuers. For example, foreign markets can be extremely volatile. Fluctuations in currency exchange rates may impact the value of foreign securities denominated in foreign currencies, or in U.S. dollars, without a change in the intrinsic value of those securities. Foreign securities may be less liquid than domestic securities so that the Fund may, at times, be unable to sell foreign securities at desirable times or prices. Brokerage commissions, custodial fees and other fees are also generally higher for foreign securities. The Fund may have limited or no legal recourse in the event of default with respect to certain foreign securities, including those issued by foreign governments. In addition, foreign governments may impose potentially confiscatory withholding or other taxes, which could reduce the amount of income and capital gains available to distribute to shareholders. Other risks include possible delays in the settlement of transactions or in the payment of income; generally less publicly available information about companies; the impact of political, social or diplomatic events; possible seizure, expropriation or nationalization of a company or its assets; possible imposition of currency exchange controls; and accounting, auditing and financial reporting standards that may be less comprehensive and stringent than those applicable to domestic companies.

•

exchange) may be illiquid, and transactions in derivatives traded in the over-the-counter market are subject to the risk that the other party will not meet its obligations. The use of derivatives also involves the risks of mispricing or improper valuation and that changes in the value of the derivative may not correlate perfectly with the underlying security, asset, reference rate or index. The Fund also may not be able to find a suitable derivative transaction counterparty, and thus may be unable to engage in derivative transactions when it is deemed favorable to do so, or at all. For more information on the risks of derivative investments and strategies, see the Statement of Additional Information.

•

Frequent Trading Risk – Frequent trading of investments increases the possibility that the Fund will realize taxable capital gains (including short-term capital gains, which are generally taxable at higher rates than long-term capital gains for U.S. federal income tax purposes), which could reduce the Fund’s after-tax return. Frequent trading can also mean higher brokerage and other transaction costs, which could reduce the Fund’s return.

Performance Information

Year by Year Total Return (%)as of December 31 Each Year ^*

LOGO

^*	Year-to-date return as of June 30, 2010: [ ]%

Best and Worst Quarterly Returns During this Period


Best:	[ ] quarter [ ]:	[ ]%
Worst:	[ ] quarter [ ]:	[ ]%

Average Annual Total Return as of December 31, 2009

The table compares the Fund’s returns for each period with those of the Barclays Capital Aggregate Bond Index, which is a market value-weighted index that tracks the daily price, coupon, pay-downs and total return performance of fixed-rate, publicly placed, dollar-denominated and non-convertible investment grade debt issues with at least $250 million par amount outstanding and with at least one year to final maturity.


	1 year		5 years		10 years
Class A shares returns before taxes	[ ]	%	[ ]	%	[ ]	%
Class A shares returns after taxes on distributions	[ ]	%	[ ]	%	[ ]	%
Class A shares returns after taxes on distributions and sale of Fund shares	[ ]	%	[ ]	%	[ ]	%
Class B shares returns before taxes	[ ]	%	[ ]	%	[ ]	%
Class C shares returns before taxes	[ ]	%	[ ]	%	[ ]	%
Barclays Capital Aggregate Bond Index (reflects no deductions for fees, expenses or taxes)	[ ]	%	[ ]	%	[ ]	%

Investment Adviser and Portfolio Manager(s)

Investment Adviser

Columbia Management Investment Advisers, LLC

Portfolio Managers

Alexander D. Powers

Lead manager. Service with the Fund since 2007.

Brian Lavin, CFA

Co-manager. Service with the Fund since 2010.

Carl W. Pappo

Co-manager. Service with the Fund since 2006.

Michael W. Zazzarino

Co-manager. Service with the Fund since 2010.

Purchase and Sale of Fund Shares

Tax Information

Payments to Broker-Dealers and Other Financial Intermediaries

Additional Investment Strategies and Policies

Changing the Fund’s Investment Objective and Policies

Investment Guidelines

Holding Other Kinds of Investments

Investing in Money Market Funds

Lending Securities

Portfolio Holdings Disclosure

The Fund’s complete portfolio holdings as of a fiscal quarter-end are disclosed approximately 30 calendar days after such quarter-end and the Fund’s largest five holdings as a percent of the Fund’s portfolio as of a month-end are disclosed approximately 15 calendar days after such month-end.

In addition, more current information concerning the Fund’s portfolio holdings as of specified dates also may be disclosed on the Columbia Funds’ website.

Investing Defensively

Mailings to Households

Additional Information on Portfolio Turnover

A mutual fund that replaces, or turns over, more than 100% of its investments in a year is considered to have a high portfolio turnover rate. A high portfolio turnover rate can generate larger distributions of short-term capital gains to shareholders, which for individuals are generally taxable at higher rates than long-term capital gains for U.S. federal income tax purposes. A high portfolio turnover rate can also mean higher brokerage and other transaction costs, which could reduce a fund’s returns. In general, the greater the volume of buying and selling by a fund, the greater the impact that brokerage commissions will have on its returns. The Fund generally buys securities for capital appreciation, investment income or both. However, the Fund may sell securities regardless of how long they’ve been held. You’ll find the Fund’s portfolio turnover rate for its most recent fiscal year in the Fees and Expenses of the Fund — Portfolio Turnover section of this prospectus and portfolio turnover rates for prior fiscal years in the Financial Highlights section of this prospectus.

Management of the Fund

Primary Service Providers

The Adviser

Subadviser(s)

The SEC has issued an order that permits the Adviser, subject to the approval of the Board, to appoint an unaffiliated subadviser or to change the terms of a subadvisory agreement for the Fund without first obtaining shareholder approval. The order permits the Fund to add or to change unaffiliated subadvisers or to change the fees paid to subadvisers from time to time without the expense and delays associated with obtaining shareholder approval of the change. The Adviser and its affiliates may have other relationships, including significant financial relationships, with current or potential subadvisers or their affiliates, which may create certain conflicts of interest. When making recommendations to the Board to appoint or to change a subadviser, or to change the terms of a subadvisory agreement, the Adviser discloses to the Board the nature of any material relationships it has with a subadviser or its affiliates.

At present, the Adviser has not engaged any investment subadviser for the Fund.

Portfolio Managers

Alexander D. Powers

Lead manager. Service with the Fund since 2007.

Portfolio manager of the Adviser. From 1996 until joining the Adviser in May 2010, Mr. Powers was associated with the Fund’s previous investment adviser, Columbia Management Advisors, LLC, or its predecessors as an investment professional.

Brian Lavin, CFA

Co-manager. Service with the Fund since 2010.

Portfolio Manager of the Adviser. Associated with the Adviser as an investment professional since 1994.

Carl W. Pappo, CFA

Co-manager. Service with the Fund since 2006.

Portfolio manager of the Adviser. From 1993 until joining the Adviser in May 2010, Mr. Pappo was associated with the Fund’s previous investment adviser, Columbia Management Advisors, LLC, or its predecessors as an investment professional.

Michael W. Zazzarino

Co-manager. Service with the Fund since 2010.

Portfolio manager of the Adviser. From 2005 until joining the Adviser in May 2010, Mr. Zazzarino was associated with the Fund’s previous investment adviser, Columbia Management Advisors, LLC, or its predecessors as an investment professional.

The Administrator

Annual Administration Fee,

as a % of Average Daily Net Assets


Columbia Total Return Bond Fund		0.15	%

The Distributor

The Transfer Agent

The Transfer Agent is a registered transfer agent and a wholly-owned subsidiary of Ameriprise Financial. The Transfer Agent’s responsibilities include processing purchases, sales and exchanges, calculating and paying distributions, keeping shareholder records, preparing account statements and providing customer service. The Fund pays the Transfer Agent monthly fees on a per-account basis. Fees paid to the Transfer Agent include reimbursements for certain out-of-pocket expenses and sub-transfer agency fees, subject to certain limitations, paid by the Transfer Agent on the Fund’s behalf.

Expense Reimbursement Arrangements

The Adviser has voluntarily agreed to reimburse a portion of the Fund’s expenses so that the Fund’s ordinary operating expenses (excluding any distribution and service fees, brokerage commissions, interest, taxes and extraordinary expenses, but including custodian charges relating to overdrafts, if any), after giving effect to any balance credits from the Fund’s custodian, do not exceed 0.70% of the Fund’s average daily net assets on an annualized basis. The Adviser, in its discretion, may revise or discontinue this arrangement at any time.

Other Roles and Relationships of Ameriprise Financial and its Affiliates—Certain Conflicts of Interest

Conflicts of interest and limitations that could affect a Columbia Fund may arise from, for example, the following:

•

compensation and other benefits received by the Adviser and other Ameriprise Financial affiliates related to the management/administration of a Columbia Fund and the sale of its shares;

•

separate and potentially divergent management of a Columbia Fund and other funds and accounts advised/managed by the Adviser and other Ameriprise Financial affiliates;

•

regulatory and other investment restrictions on investment activities of the Adviser and other Ameriprise Financial affiliates and accounts advised/managed by them;

•

insurance and other relationships of Ameriprise Financial affiliates with companies and other entities in which a Columbia Fund invests; and

•

regulatory and other restrictions relating to the sharing of information between Ameriprise Financial and its affiliates, including the Adviser, and a Columbia Fund.

Additional information about Ameriprise Financial and the types of conflicts of interest and other matters referenced above is set forth in the “Investment Advisory and Other Services—Other Roles and Relationships of Ameriprise Financial and its Affiliates—Certain Conflicts of Interest” section of the SAI, which is identified by the icon. Investors in the Columbia Funds should carefully review these disclosures and consult with their financial advisor if they have any questions.

Certain Legal Matters

Ameriprise Financial and certain of its affiliates have historically been involved in a number of legal, arbitration and regulatory proceedings, including routine litigation, class actions and governmental actions, concerning matters arising in connection with the conduct of their business activities. Ameriprise Financial believes that the Fund is not currently the subject of, and that neither Ameriprise Financial nor any of its affiliates is the subject of, any pending legal, arbitration or regulatory proceedings that are likely to have a material adverse effect on the Fund or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Fund. Information regarding certain pending and settled legal proceedings may be found in the Fund’s shareholder reports and in the SAI. Additionally, Ameriprise Financial is required to make 10-Q, 10-K and, as necessary, 8-K filings with the SEC on legal and regulatory matters that relate to Ameriprise Financial and its affiliates. Copies of these filings may be obtained by accessing the SEC website at www.sec.gov.

Choosing a Share Class

Comparison of the Share Classes

Share Class Features


	Class A Shares	Class B Shares	Class C Shares
Eligible Investors and Minimum Initial Investments ^(a)	Minimum initial investments range from $0 to $2,500; the share class is available to the general public for investment.	The Fund no longer accepts investments from new or existing investors in Class B shares, except through a reinvestment of a dividend or capital gain distribution, or a permitted exchange as described in more detail under Buying , Selling and Exchanging Shares - Opening an Account and Placing Orders - Buying Shares -Class B Shares Closing.	Minimum initial investments range from $0 to $2,500; the share class is available to the general public for investment.

Investment Limits	none	up to $49,999 (based on aggregate account value) ^(b)	up to $999,999

Conversion Features	none	convert to Class A shares eight years after purchase	none

Front-End Sales Charges ^(c)	3.25% maximum, declining to 0.00% on investments of $1 million or more	none	none

Contingent Deferred Sales Charges (CDSCs) ^(c)	none, except a 1.00% CDSC applies to certain investments of between $1 million and $50 million sold within one year of purchase	3.00% maximum, gradually declining to 0.00% after four years	1.00% on investments sold within one year of purchase

Maximum Distribution and Service Fees	0.25% combined distribution and service fee	0.75% distribution fee 0.25% service fee	0.75% distribution fee 0.25% service fee

^(a)	See Buying, Selling and Exchanging Shares – Opening an Account and Placing Orders for more details on the eligible investors and investment minimums of these share classes.

^(b)

^(c)	See Choosing a Share Class – Reductions/Waivers of Sales Charges for information about certain exceptions to these sales charges.

FUNDamentals ^TM

Selling and/or Servicing Agents

The terms “selling agent” and “servicing agent” refer to the financial intermediary that employs your financial advisor. Selling and/or servicing agents include, for example, brokerage firms, banks, investment advisors, third party administrators and other financial intermediaries, including Ameriprise Financial and its affiliates.

Sales Charges and Commissions

Class A Shares—Front-End Sales Charge

FUNDamentals ^TM

Front-End Sales Charge Calculation

The following table presents the front-end sales charge as a percentage of both the offering price and the net amount invested.

•

The offering price per share is the net asset value per share plus any front-end sales charge that applies.

•

The net asset value (or NAV) per share is the price of a share calculated by the Fund every business day.

The dollar amount of the sales charge is the difference between the offering price of the shares you buy (based on the applicable sales charge in the table) and the net asset value of those shares.

The front-end sales charge you’ll pay on Class A shares:

•

depends on the amount you’re investing (generally, the larger the investment, the smaller the percentage sales charge), and

•

is based on the total amount of your purchase and the value of your account.

Class A Shares—Front-End Sales Charge—Breakpoint Schedule


Dollar amount of shares bought ^(a)	Sales charge as a % of the offering price ^(b)		Sales charge as a % of the net amount invested ^(b)		Amount retained by or paid to selling and/or servicing agents as a % of the offering price
$0 – $99,999	3.25	%	3.36	%	3.00	%
$100,000 – $249,999	2.50	%	2.56	%	2.25	%
$250,000 – $499,999	2.00	%	2.04	%	1.75	%
$500,000 – $999,999	1.50	%	1.52	%	1.25	%
$1,000,000 or more	0.00	%	0.00	%	1.00	% ^(c)(d)

^(a)	Purchase amounts and account values are aggregated among all eligible Columbia Fund accounts for the purposes of this table.

^(b)

^(c)

^(d)	For certain group retirement plans, selling and/or servicing agents are eligible to receive a 1.00% commission from the Distributor on all purchases up to $3 million, including those in amounts of less than $1 million that are coded as commission-eligible trades.

Class A Shares—CDSC and Commissions

In some cases, you’ll pay a CDSC if you sell Class A shares that you bought without an initial sales charge.

•

The CDSC on Class A shares:

•

is applied to the net asset value at the time of your purchase or sale, whichever is lower, and

•

will not be applied to any shares you receive through reinvested distributions.

The Distributor may also pay your selling and/or servicing agent a cumulative commission when you buy $1 million or more of Class A shares, according to the following schedule:

Class A Shares—Commission Schedule


Purchase Amount	Commission Level (as a % of net asset value per share)
$1 million – $2,999,999	1.00	%
$3 million – $49,999,999	0.50	%
$50 million or more	0.25	%

FUNDamentals ^TM

Contingent Deferred Sales Charge

Class B and Class C Shares—Sales Charges

You don’t pay a front-end sales charge when you buy Class B or Class C shares, but you may pay a CDSC when you sell Class B or Class C shares.

The CDSC on Class B and Class C shares:

•

is applied to the net asset value at the time of your purchase or sale, whichever is lower,

•

will not be applied to any shares you receive through reinvested distributions, and

•

generally declines each year until there is no sales charge for selling shares.

Class B Shares—CDSC and Commissions

Class B Shares—CDSC Schedule


Number of Years Class B Shares Held		Applicable CDSC
One		3.00%
Two		3.00%
Three		2.00%
Four		1.00%
Five		none
Six		none
Seven		none
Eight		none
Nine		Conversion to Class A Shares

The following rules apply to the conversion of Class B shares to Class A shares:

•

Class B shares are converted on or about the 15th day of the month that they become eligible for conversion.

•

Any shares you received from reinvested distributions on these shares generally will convert to Class A shares at the same time.

•

No sales charge or other charges apply, and conversions are free from U.S. federal income tax.

Class C Shares—CDSC and Commissions

Reductions/Waivers of Sales Charges

Front-End Sales Charge Reductions

FUNDamentals ^TM

Your “Immediate Family” and Account Value Aggregation

Eligible Accounts

The types of accounts that are eligible for the account value aggregation purposes described above are:

•

individual accounts,

•

joint accounts,

•

certain IRA accounts,

•

certain health savings accounts,

•

certain trust accounts, and

•

Uniform Gifts to Minors Act (UGMA)/Uniform Transfers to Minors Act (UTMA) accounts.

Eligible accounts do not include Class R share accounts or accounts holding shares of money market funds that used the Columbia brand before May 1, 2010.

Front-End Sales Charge Waivers

CDSC Waivers

The Fund may change or cancel these terms at any time. Any change or cancellation applies only to future purchases.

For more information about the sales charge reductions and waivers described here, consult the SAI.

Distribution and Service Fees

The table below shows the maximum annual distribution and service fees (as an annual % of average daily net assets) and the combined amount of such fees applicable to each share class:

Distribution and Service (Rule 12b-1) Fees


	Distribution Fee		Service Fee		Combined Total
Class A	—	^(a)	—	^(a)	0.25	% ^(a)
Class B	0.75	%	0.25	%	1.00	%
Class C	0.75	%	0.25	%	1.00	%

^(a)	The Fund’s Class A shares pay a combined distribution and service fee pursuant to the Fund’s combined distribution and shareholder servicing plan for Class A shares.

Financial Intermediary Compensation

The Distributor and the Adviser make payments, from their own resources, to certain financial intermediaries, including other Ameriprise Financial affiliates, for marketing/sales support services relating to the Columbia Funds. Such payments are generally based upon one or more of the following factors: average net assets of the Columbia Funds sold by the Distributor attributable to that intermediary, gross sales of the Columbia Funds distributed by the Distributor attributable to that intermediary, reimbursement of ticket charges (fees that an intermediary firm charges its representatives for effecting transactions in Fund shares) or a negotiated lump sum payment. While the financial arrangements may vary for each intermediary, the support payments to any one intermediary are generally between 0.05% and 0.50% on an annual basis for payments based on average net assets of the Fund attributable to the intermediary, and between 0.05% and 0.25% on an annual basis for firms receiving a payment based on gross sales of the Columbia Funds attributable to the intermediary.

These payments for shareholder servicing support vary by financial intermediary but generally are not expected, with certain limited exceptions, to exceed 0.40% of the average aggregate value of the Fund’s shares in any financial intermediary’s program on an annual basis for those classes of shares that pay a service fee pursuant to a plan under Rule 12b-1 under the 1940 Act, and 0.45% of the average aggregate value of the Fund’s shares in any financial intermediary’s program on an annual basis for those classes of shares that do not pay a service fee pursuant to a plan under Rule 12b-1 under the 1940 Act.

Amounts paid by the Distributor and the Adviser and their affiliates are paid out of the Distributor’s and the Adviser’s own resources and do not increase the amount paid by you or the Fund. You can find further details about the payments made by the Distributor and the Adviser and their affiliates and the services provided by financial intermediaries as well as a list of the intermediaries to which the Distributor and the Adviser have agreed to make marketing support payments in the SAI. Your financial intermediary may charge you fees and commissions in addition to those described in this prospectus. You should consult with your financial intermediary and review carefully any disclosure your financial intermediary provides regarding its services and compensation. Depending on the financial arrangement in place at any particular time, a financial intermediary and its financial consultants may have a financial incentive for recommending the Fund or a particular share class over others. See Management of the Fund – Other Roles and Relationships of Ameriprise Financial and its Affiliates – Certain Conflicts of Interest for more information.

Buying, Selling and Exchanging Shares

Share Price Determination

FUNDamentals ^TM

NAV Calculation

Each of the Fund’s share classes calculates its NAV as follows:


		(Value of assets of the share class)
NAV =		—(Liabilities of the share class)
		Number of outstanding shares of the class

Transaction Rules and Policies

Also remember that the Fund may refuse any order to buy or exchange shares. If this happens, we’ll return any money we’ve received, but no interest will be paid on that money.

Order Processing

FUNDamentals ^TM

Business Days

A business day is any day that the New York Stock Exchange (NYSE) is open. A business day ends at the close of regular trading on the NYSE, usually at 4:00 p.m. Eastern time. If the NYSE closes early, the business day ends as of the time the NYSE closes. On holidays and other days when the NYSE is closed, the Fund’s net asset value is not calculated and the Fund does not accept buy or sell orders. However, the value of the Fund’s assets may still be affected on such days to the extent that the Fund holds foreign securities that trade on days that foreign securities markets are open.

“Good Form”

An order is in “good form” if the Transfer Agent or your selling and/or servicing agent has all of the information and documentation it deems necessary to effect your order. For example, when you sell shares by letter of instruction, “good form” means that your letter has (i) complete instructions and the signatures of all account owners, (ii) a Medallion signature guarantee for amounts equal to or greater than $100,000 and (iii) any other required documents completed and attached. For the documents required for sales by corporations, agents, fiduciaries, surviving joint owners and other legal entities, call 800.345.6611.

Medallion Signature Guarantees

Written Transactions

Telephone Transactions

Telephone orders may not be as secure as written orders. Columbia Funds will take reasonable steps to confirm that telephone instructions are genuine. For example, we require proof of your identification before we will act on instructions received by telephone and may record telephone conversations. However, the Fund and its agents will not be responsible for any losses, costs or expenses resulting from an unauthorized telephone instruction when reasonable steps have been taken to confirm that telephone instructions are

genuine. Telephone orders may be difficult to complete during periods of significant economic or market change or business interruption.

Online Transactions

Once you have an account, contact Columbia Funds at 800.345.6611 for more information on account trading restrictions and the special sign-up procedures required for online transactions. The Transfer Agent has procedures in place to authenticate electronic orders you deliver through the internet. You will be required to accept the terms of an online agreement and to establish and utilize a password in order to access online account services.

You can sell up to an aggregate of $100,000 of shares through the internet in any 30-day period if you qualify for internet orders.

Customer Identification Program

Small Account Policy—Accounts Below $250

Small Account Policy—Minimum Balance Fee

Exceptions to the Above Small Account Policy (Accounts Below $250 and Minimum Balance Fee)

Small Account Policy - Broker/Dealer and Wrap Fee Accounts

Columbia Funds may automatically redeem shares at any time from broker/dealer networked accounts and wrap fee accounts that have account balances of $20 or less or that have less than one share.

Cash Flows

Information Sharing Agreements

As required by Rule 22c-2 under the 1940 Act, the Columbia Funds or certain of their service providers will enter into information sharing agreements with financial intermediaries, including participating life insurance companies and financial intermediaries that sponsor or offer retirement plans through which shares of the Columbia Funds are made available for purchase. Pursuant to Rule 22c-2, financial intermediaries are required, upon request, to: (i) provide shareholder account and transaction information and (ii) execute instructions from the Fund to restrict or prohibit further purchases of Fund shares by shareholders who have been identified by the Fund as having engaged in transactions that violate the Fund’s excessive trading policies and procedures. See Buying, Selling and Exchanging Shares – Excessive Trading Practices for more information.

Excessive Trading Practices

Some financial intermediaries apply their own restrictions or policies to underlying investor accounts, which may be more or less restrictive than those described here. This may impact the Fund’s ability to curtail excessive trading, even where it is identified. For these and other reasons, it is possible that excessive trading may occur despite the Fund’s efforts to detect and prevent it.

Risks of Excessive Trading – Excessive trading creates certain risks to the Fund’s long-term shareholders and may create the following adverse effects:

•

negative impact on the Fund’s performance;

•

potential dilution of the value of the Fund’s shares;

•

losses on the sale of investments resulting from the need to sell securities at less favorable prices;

•

increased taxable gains to the Fund’s remaining shareholders resulting from the need to sell securities to meet sell orders; and

•

increased brokerage and administrative costs.

Opening an Account and Placing Orders

Columbia Funds encourages you to consult with a financial advisor who can help you with your investment decisions and who can help you open an account. Once you have an account, you can buy, sell and exchange shares by contacting your financial advisor who will send your order to the Transfer Agent or your selling and/or servicing agent. As described in Buying, Selling and Exchanging Shares – Transaction Rules and Policies , once you have an account you can also communicate your orders directly to the Transfer Agent by mail, by telephone or online.

Buying Shares

Eligible Investors

Class B Shares Closing

Additional Class B shares will be issued only to existing investors in Class B shares and only through the following two types of transactions (Qualifying Transactions):

•

Dividends and/or capital gain distributions may continue to be reinvested in Class B shares of the Fund.

•

Shareholders invested in Class B shares of the Fund may exchange those shares for Class B shares of other Columbia Funds offering such shares.

Any initial purchase orders for the Fund’s Class B shares will be rejected (other than through a Qualifying Transaction that is an exchange transaction).

Unless contrary instructions are received in advance by the Fund, purchase orders (except those submitted by a financial intermediary through the National Securities Clearing Corporation (NSCC) as described in more detail below) for additional Class B shares of the Fund received from existing investors in Class B shares, including orders made through an active systematic investment plan, will be invested in Class A shares of the Fund, without regard to the normal minimum initial investment for Class A shares, but subject to the front-end sales charge that generally applies to Class A shares. See Choosing a Share Class—Class A Shares—Front-end Sales Charge for additional information.

Minimum Initial Investments

Minimum Additional Investments

There is no minimum additional investment for Class A or Class C shares.

Systematic Investment Plan

Dividend Diversification

Generally, you may automatically invest distributions made by another Columbia Fund into the same class of shares (and in some cases certain other classes of shares) of the Fund at no additional sales charge. A sales charge may apply when you invest distributions made by a Columbia Fund that were not assessed a sales charge at the time of your initial purchase. Call Columbia Funds at 800.345.6611 for details. See Buying, Selling and Exchanging Shares—Opening an Account and Placing Orders—Buying Shares—Class B Shares Closing for restrictions applicable to Class B shares.

Wire Purchases

You may buy Class A or Class C shares of the Fund by wiring money from your bank account to your Fund account by calling the Transfer Agent at 800.422.3737.

Electronic Funds Transfer

Other Purchase Rules You Should Know

•

You generally buy Class A shares at the public offering price per share because purchases of Class A shares are generally subject to a front-end sales charge.

•

You buy Class B and Class C shares at net asset value per share because no front-end sales charge applies to purchases of these share classes.

•

Selling and/or servicing agents are responsible for sending your buy orders to the Transfer Agent and ensuring that we receive your money on time.

•

Shares bought are recorded on the books of the Fund. The Fund doesn’t issue certificates.

Selling Shares

When you sell your shares, the Fund is effectively buying them back from you. This is called a redemption.

Wire Redemptions

Electronic Funds Transfer

Systematic Withdrawal Plan

guaranteed.

In-Kind Distributions

Other Redemption Rules You Should Know

•

No interest will be paid on uncashed redemption checks.

•

Other restrictions may apply to retirement accounts. For information about these restrictions, contact your retirement plan administrator.

•

Also keep in mind Columbia Funds’ Small Account Policy, which is described above in Buying, Selling and Exchanging Shares – Transaction Rules and Policies .

Exchanging Shares

Systematic Exchanges

The rules described below for making exchanges apply to systematic exchanges.

Other Exchange Rules You Should Know

•

Exchanges are made at net asset value.

•

You can generally make exchanges between like share classes of any Columbia Fund. Some exceptions apply.

•

A sales charge may apply when you exchange shares of a Columbia Fund that were not assessed a sales charge at the time of your initial purchase.

•

The rules for buying shares of a Columbia Fund generally apply to exchanges into that Fund.

•

You may make exchanges only into a Columbia Fund that is legally offered and sold in your state of residence.

•

You generally may make an exchange only into a Columbia Fund that is accepting investments.

•

The Fund may change or cancel your right to make an exchange by giving the amount of notice required by regulatory authorities (generally 60 days for a material change or cancellation).

•

Unless your account is part of a tax-advantaged arrangement, an exchange for shares of another fund is a taxable event, and you may recognize a gain or loss for tax purposes.

Same-Fund Exchange Privilege for Class Z Shares

Distributions and Taxes

Distributions to Shareholders

A mutual fund can make money two ways:

•

It can earn income on its investments. Examples of fund income are interest paid on money market instruments and bonds, and dividends paid on common stocks.

•

FUNDamentals ^TM

Distributions

Declaration and Distribution Schedule


Declarations		daily
Distributions		monthly

The Fund may, however, pay distributions of net investment income more frequently.

Unless you are a tax-exempt investor or holding Fund shares through a tax-advantaged account (such as a 401(k) plan or IRA), you should consider avoiding buying Fund shares shortly before the Fund makes a distribution, other than distributions of net investment income that are declared daily, because doing so can cost you money in taxes. This is because you will, in effect, receive part of your purchase price back in the distribution. This is known as “buying a dividend.” To avoid “buying a dividend,” check the Fund’s distribution schedule online at www.columbiafunds.com, or by calling us at 800.345.6611, before you invest.

Taxes and Your Investment

The Fund will send you a statement each year showing how much you’ve received in distributions in the prior year and the distributions’ character for federal income tax purposes. The Fund expects that distributions will consist primarily of ordinary income. In addition, you should be aware of the following:

•

Distributions generally are taxable to you when paid, whether they are paid in cash or automatically reinvested in additional shares of the Fund.

•

FUNDamentals ^TM

Taxes

Financial Highlights

Columbia Total Return Bond Fund—Class A Shares


	Year Ended March 31, 2010			Year Ended March 31, 2009			Year Ended March 31, 2008			Year Ended March 31, 2007			Year Ended March 31, 2006 ^(a)
Net Asset Value, Beginning of Period	$	[	]	$	9.51		$	9.74		$	9.56		$	9.80
Income from Investment Operations:
Net investment income ^(b)		[	]		0.43			0.45			0.44			0.35
Net realized and unrealized gain (loss) on investments, foreign currency, futures contracts and credit default swap contracts		[	]		(0.76	)		(0.23	)		0.18			(0.17	)
Total from investment operations		[	]		(0.33	)		0.22			0.62			0.18
Less Distributions to Shareholders:
From net investment income		[	]		(0.46	)		(0.45	)		(0.44	)		(0.39	)
From net realized gains		[	]		—			—			—			(0.03	)
Total distributions to shareholders		[	]		(0.46	)		(0.45	)		(0.44	)		(0.42	)
Increase from regulatory settlement		[	]		—	^(c)		—			—			—
Net Asset Value, End of Period	$	[	]	$	8.72		$	9.51		$	9.74		$	9.56
Total return ^(d)		[	]%		(3.45	)%		2.34	%		6.65	%		1.84	% ^(e)
Ratios to Average Net Assets/Supplemental Data:
Net expenses before interest expense ^(f)		[	]%		0.85	%		0.85	%		0.79	%		0.79	%
Interest expense		[	]%		—	% ^(g)		—			—			—
Net expenses ^(f)		[	]%		0.85	%		0.85	%		0.79	%		0.79	%
Waiver/Reimbursement		[	]		—			—			—			0.06	% ^(h)
Net investment income ^(f)		[	]%		4.79	%		4.74	%		4.60	%		3.91	%
Portfolio turnover rate		[	]%		223	%		253	%		320	%		199	%
Net assets, end of period (000’s)	$	[	]	$	18,221		$	23,087		$	24,704		$	35,849

^(a)	On August 22, 2005, the Fund’s Investor A shares were renamed Class A shares.

^(b)	Per share data was calculated using the average shares outstanding during the period.

^(c)	Rounds to less than $0.01 per share.

^(d)	Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge.

^(e)	Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

^(f)	The benefits derived from expense reductions had an impact of less than 0.01%.

^(g)	Rounds to less than 0.01%.

^(h)	Bank of America Corporation assumed certain non-recurring costs. Absent these non-recurring costs, the waiver/reimbursement ratio would have been —% and 0.06% for the periods ended March 31, 2006 and March 31, 2005, respectively.

Columbia Total Return Bond Fund—Class B Shares


	Year Ended March 31, 2010			Year Ended March 31, 2009			Year Ended March 31, 2008			Year Ended March 31, 2007			Year Ended March 31, 2006 ^(a)
Net Asset Value, Beginning of Period	$	[	]	$	9.51		$	9.74		$	9.57		$	9.81
Income from Investment Operations:
Net investment income ^(b)		[	]		0.36			0.38			0.37			0.28
Net realized and unrealized gain (loss) on investments, foreign currency, futures contracts and credit default swap contracts		[	]		(0.76	)		(0.23	)		0.17			(0.17	)
Total from investment operations		[	]		(0.40	)		0.15			0.54			0.11
Less Distributions to Shareholders:
From net investment income		[	]		(0.39	)		(0.38	)		(0.37	)		(0.32	)
From net realized gains		[	]		—			—			—			(0.03	)
Total distributions to shareholders		[	]		(0.39	)		(0.38	)		(0.37	)		(0.35	)
Increase from regulatory settlement		[	]		—	^(c)		—			—			—
Net Asset Value, End of Period	$	[	]	$	8.72		$	9.51		$	9.74		$	9.57
Total return ^(d)		[	]		(4.16	)%		1.58	%		5.75	%		1.09	% ^(e)
Ratios to Average Net Assets/Supplemental Data:
Net expenses before interest expense ^(f)		[	]%		1.60	%		1.60	%		1.54	%		1.54	%
Interest expense		[	]%		—	% ^(g)		—			—			—
Net expenses ^(f)		[	]%		1.60	%		1.60	%		1.54	%		1.54	%
Waiver/Reimbursement		[	]		—			—			—			0.06	% ^(h)
Net investment income ^(f)		[	]%		4.04	%		3.99	%		3.85	%		3.14	%
Portfolio turnover rate		[	]%		223	%		253	%		320	%		199	%
Net assets, end of period (000’s)	$	[	]	$	4,861		$	7,334		$	8,735		$	10,108

^(a)	On August 22, 2005, the Fund’s Investor B shares were renamed Class B shares.

^(b)	Per share data was calculated using the average shares outstanding during the period.

^(c)	Rounds to less than $0.01 per share.

^(d)	Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge.

^(e)	Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

^(f)	The benefits derived from expense reductions had an impact of less than 0.01%.

^(g)	Rounds to less than 0.01%.

^(h)	Bank of America Corporation assumed certain non-recurring costs. Absent these non-recurring costs, the waiver/reimbursement ratio would have been —% and 0.06% for the periods ended March 31, 2006 and March 31, 2005, respectively.

Columbia Total Return Bond Fund—Class C Shares


	Year Ended March 31, 2010			Year Ended March 31, 2009			Year Ended March 31, 2008			Year Ended March 31, 2007			Year Ended March 31, 2006 ^(a)
Net Asset Value, Beginning of Period	$	[	]	$	9.51		$	9.74		$	9.56		$	9.80
Income from Investment Operations:
Net investment income ^(b)		[	]		0.36			0.38			0.37			0.28
Net realized and unrealized gain (loss) on investments, foreign currency, futures contracts and credit default swap contracts		[	]		(0.76	)		(0.23	)		0.18			(0.17	)
Total from investment operations		[	]		(0.40	)		0.15			0.55			0.11
Less Distributions to Shareholders:
From net investment income		[	]		(0.39	)		(0.38	)		(0.37	)		(0.32	)
From net realized gains		[	]		—			—			—			(0.03	)
Total distributions to shareholders		[	]		(0.39	)		(0.38	)		(0.37	)		(0.35	)
Increase from regulatory settlement		[	]		—	^(c)		—			—			—
Net Asset Value, End of Period	$	[	]	$	8.72		$	9.51		$	9.74		$	9.56
Total return ^(d)		[	]%		(4.17	)%		1.57	%		5.86	%		1.08	% ^(e)
Ratios to Average Net Assets/Supplemental Data:
Net expenses before interest expense ^(f)		[	]%		1.60	%		1.60	%		1.54	%		1.54	%
Interest expense		[	]%		—	% ^(g)		—			—			—
Net expenses ^(f)		[	]%		1.60	%		1.60	%		1.54	%		1.54	%
Waiver/Reimbursement		[	]		—			—			—			0.06	% ^(h)
Net investment income ^(f)		[	]%		4.04	%		3.97	%		3.84	%		3.20	%
Portfolio turnover rate		[	]%		223	%		253	%		320	%		199	%
Net assets, end of period (000’s)	$	[	]	$	3,529		$	3,120		$	2,275		$	2,956

^(a)	On August 22, 2005, the Fund’s Investor C shares were renamed Class C shares.

^(b)	Per share data was calculated using the average shares outstanding during the period.

^(c)	Rounds to less than $0.01 per share.

^(d)	Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge.

^(e)	Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

^(f)	The benefits derived from expense reductions had an impact of less than 0.01%.

^(g)	Rounds to less than 0.01%.

^(h)	Bank of America Corporation assumed certain non-recurring costs. Absent these non-recurring costs, the waiver/reimbursement ratio would have been —% and 0.06% for the periods ended March 31, 2006 and March 31, 2005, respectively.

Hypothetical Fees and Expenses

Columbia Total Return Bond Fund—Class A Shares

Maximum Initial Sales Charge 3.25%

Initial Hypothetical Investment Amount
$10,000.00

Assumed Rate of Return 5%

Year

Cumulative Return
Before Fees and
Expenses

Annual Expense
Ratio

Cumulative Return
After Fees and
Expenses

Hypothetical Year-
End Balance After
Fees and Expenses

Annual Fees and
Expenses ^(a)

5.00

[

]% ^(b)

[

]

[

]

10.25

[

]

[

]

15.76

[

]

[

]

21.55

[

]

[

]

27.63

[

]

[

]

34.01

[

]

[

]

40.71

[

]

[

]

47.75

[

]

[

]

55.13

[

]

[

]

62.89

[

]

[

]

Total Gain After Fees and Expenses

[

]

Total Annual Fees and Expenses Paid

[

]

^(a)	Annual Fees and Expenses are calculated based on the average between the beginning and ending balance for each year. All information is calculated on an annual compounding basis.

^(b)	Reflects deduction of the maximum initial sales charge.

Columbia Total Return Bond Fund—Class B Shares

Maximum Initial Sales Charge 0.00%

Initial Hypothetical Investment Amount
$10,000.00

Assumed Rate of Return 5%

Year

Cumulative Return
Before Fees and
Expenses

Annual Expense
Ratio

Cumulative Return
After Fees and
Expenses

Hypothetical Year-
End Balance After
Fees and Expenses

Annual Fees and
Expenses ^(a)

5.00

[

]

[

]

10.25

[

]

[

]

15.76

[

]

[

]

21.55

[

]

[

]

27.63

[

]

[

]

34.01

[

]

[

]

40.71

[

]

[

]

47.75

[

]

[

]

55.13

[

]

[

]

62.89

[

]

[

]

Total Gain After Fees and Expenses

[

]

Total Annual Fees and Expenses Paid

[

]

^(a)	Annual Fees and Expenses are calculated based on the average between the beginning and ending balance for each year. All information is calculated on an annual compounding basis.

Columbia Total Return Bond Fund—Class C Shares

Maximum Initial Sales Charge 0.00%

Initial Hypothetical Investment Amount
$10,000.00

Assumed Rate of Return 5%

Year

Cumulative Return
Before Fees and
Expenses

Annual Expense
Ratio

Cumulative Return
After Fees and
Expenses

Hypothetical Year-
End Balance After
Fees and Expenses

Annual Fees and
Expenses ^(a)

5.00

[

]

[

]

10.25

[

]

[

]

15.76

[

]

[

]

21.55

[

]

[

]

27.63

[

]

[

]

34.01

[

]

[

]

40.71

[

]

[

]

47.75

[

]

[

]

55.13

[

]

[

]

62.89

[

]

[

]

Total Gain After Fees and Expenses

[

]

Total Annual Fees and Expenses Paid

[

]

^(a)	Annual Fees and Expenses are calculated based on the average between the beginning and ending balance for each year. All information is calculated on an annual compounding basis.

LOGO

Columbia Total Return Bond Fund

Class A, Class B and Class C Shares

Prospectus, August 1, 2010

For More Information


By Mail:		Columbia Funds c/o Columbia Management Investment Services Corp. P.O. Box 8081 Boston, MA 02266-8081

By Telephone:		800.345.6611

Online:		www.columbiafunds.com

Annual and Semi-Annual Reports to Shareholders

Shareholder Communications with the Board

Statement of Additional Information

The SAI provides more detailed information about the Fund and its policies. The SAI is legally part of this prospectus (incorporated by reference). A copy has been filed with the SEC.

Information Provided by the SEC

FUNDamentals™ is a trademark of Ameriprise Financial.

The investment company registration number of Columbia Funds Series Trust, of which the Fund is a series, is 811-09645.

One Financial Center, Boston, MA 02111-2621

800.345.6611 www.columbiafunds.com

INT-36/[ ]-0810

LOGO

Prospectus

August 1, 2010

Columbia Funds

Columbia Total Return Bond Fund

Ticker symbol

Class Z Shares NSFIX

Table of Contents



Columbia Total Return Bond Fund		3

Investment Objective		3

Fees and Expenses of the Fund		3

Principal Investment Strategies		5

Principal Risks		5

Performance Information		9

Investment Adviser and Portfolio Manager(s)		10

Purchase and Sale of Fund Shares		10

Tax Information		10

Payments to Broker-Dealers and Other Financial Intermediaries		10

Additional Investment Strategies and Policies		11

Management of the Fund		13

Primary Service Providers		13

Other Roles and Relationships of Ameriprise Financial and its Affiliates—Certain Conflicts of Interest		15

Certain Legal Matters		16

About Class Z Shares		17

Description of the Share Class		17

Financial Intermediary Compensation		18

Buying, Selling and Exchanging Shares		19

Share Price Determination		19

Transaction Rules and Policies		20

Opening an Account and Placing Orders		24

Distributions and Taxes		28

Financial Highlights		31

Hypothetical Fees and Expenses		32

Icons Guide

Investment Objective

Fees and Expenses of the Fund

Principal Investment Strategies

Principal Risks

Performance Information

Other Roles and Relationships of Ameriprise Financial and its Affiliates - Certain Conflicts of Interest

Columbia Total Return Bond Fund

Investment Objective

The Fund seeks total return, consisting of current income and capital appreciation.

Fees and Expenses of the Fund

This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.

Shareholder Fees (fees paid directly from your investment)


		Class Z Shares
Maximum sales charge (load) imposed on purchases, as a % of offering price		N/A
Maximum deferred sales charge (load) imposed on redemptions, as a % of the lower of the original purchase price or net asset value		N/A

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)


	Class Z Shares
Management fees	0.51	%
Distribution and/or service (Rule 12b-1) fees	0.00	%
Other expenses	[	]%
Total annual Fund operating expenses	[	]%

Example

The following example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds.

The example illustrates the hypothetical expenses that you would incur over the time periods indicated, and assumes that:

•

you invest $10,000 in Class Z shares of the Fund for the periods indicated,

•

your investment has a 5% return each year, and

•

the Fund’s total annual operating expenses remain the same as shown in the table above.

Based on the assumptions listed above, your costs would be:

1 year

3 years

5 years

10 years

Class Z Shares

[

]

[

]

[

]

[

]

Remember this is an example only. Your actual costs may be higher or lower.

Portfolio Turnover

Principal Investment Strategies

Under normal circumstances, the Fund invests at least 80% of its net assets in bonds, including debt securities issued by the U.S. Government and its agencies, debt securities issued by corporations, mortgage- and other asset-backed securities, and dollar-denominated securities issued by foreign governments, companies or other entities. The Fund normally invests at least 65% of its total assets in securities that, at the time of purchase, are rated investment grade or are unrated but determined by Columbia Management Investment Advisers, LLC, the Fund’s investment adviser (the Adviser), to be of comparable quality. The Fund may invest up to 20% of its total assets in securities that, at the time of purchase, are rated below investment grade or are unrated but determined by the Advisor to be of comparable quality, which are commonly referred to as “junk bonds.” The Fund also may invest up to 20% of its total assets in non-U.S. dollar denominated foreign debt securities. Under normal circumstances, the Fund’s dollar-weighted average effective maturity will be between three and ten years.

The Fund also may participate in mortgage dollar rolls up to the Fund’s then current position in mortgage-backed securities.

Principal Risks

•

Interest Rate Risk – Debt securities are subject to interest rate risk. In general, if prevailing interest rates rise, the values of debt securities will tend to fall, and if interest rates fall, the values of debt securities will tend to rise. Changes in the value of a debt security usually will not affect the amount of income the Fund receives from it but may affect the value of the Fund’s shares. Interest rate risk is generally greater for debt securities with longer maturities/durations.

•

Foreign Securities Risk – Foreign securities are subject to special risks as compared to securities of U.S. issuers. For example, foreign markets can be extremely volatile. Fluctuations in currency exchange rates may impact the value of foreign securities denominated in foreign currencies, or in U.S. dollars, without a change in the intrinsic value of those securities. Foreign securities may be less liquid than domestic securities so that the Fund may, at times, be unable to sell foreign securities at desirable times or prices. Brokerage commissions, custodial fees and other fees are also generally higher for foreign securities. The Fund may have limited or no legal recourse in the event of default with respect to certain foreign securities, including those issued by foreign governments. In addition, foreign governments may impose potentially confiscatory withholding or other taxes, which could reduce the amount of income and capital gains available to distribute to shareholders. Other risks include possible delays in the settlement of transactions or in the payment of income; generally less publicly available information about companies; the impact of political, social or diplomatic events; possible seizure, expropriation or nationalization of a company or its assets; possible imposition of currency exchange controls; and accounting, auditing and financial reporting standards that may be less comprehensive and stringent than those applicable to domestic companies.

•

Performance Information

Year by Year Total Return (%) as of December 31 Each Year ^*

The bar chart below shows you how the performance of the Fund’s Class Z shares has varied from year to year.

LOGO

^*	Year-to-date return as of June 30, 2010: [ ]%

Best and Worst Quarterly Returns During this Period


Best:	[ ]	quarter	[ ]:	[	]%
Worst:	[ ]	quarter	[ ]:	[	]%

Average Annual Total Return as of December 31, 2009


	1 year		5 years		10 years
Class Z shares returns before taxes	[	]%	[	]%	[	]%
Class Z shares returns after taxes on distributions	[	]%	[	]%	[	]%
Class Z shares returns after taxes on distributions and sale of Fund shares	[	]%	[	]%	[	]%
Barclays Capital Aggregate Bond Index (reflects no deductions for fees, expenses or taxes)	[	]%	[	]%	[	]%

Investment Adviser and Portfolio Manager(s)

Investment Adviser

Columbia Management Investment Advisers, LLC

Portfolio Managers

Alexander D. Powers

Lead manager. Service with the Fund since 2007.

Brian Lavin, CFA

Co-manager. Service with the Fund since 2010.

Carl W. Pappo

Co-manager. Service with the Fund since 2006.

Michael W. Zazzarino

Co-manager. Service with the Fund since 2010.

Purchase and Sale of Fund Shares

Tax Information

Payments to Broker-Dealers and Other Financial Intermediaries

Additional Investment Strategies and Policies

Changing the Fund’s Investment Objective and Policies

Investment Guidelines

Holding Other Kinds of Investments

Investing in Money Market Funds

Lending Securities

Portfolio Holdings Disclosure

In addition, more current information concerning the Fund’s portfolio holdings as of specified dates also may be disclosed on the Columbia Funds’ website.

Investing Defensively

Mailings to Households

Additional Information on Portfolio Turnover

A mutual fund that replaces, or turns over, more than 100% of its investments in a year is considered to have a high portfolio turnover rate. A high portfolio turnover rate can generate larger distributions of short-term capital gains to shareholders, which for individuals are generally taxable at higher rates than long-term capital gains for U.S. federal income tax purposes. A high portfolio turnover rate can also mean higher brokerage and other transaction costs, which could reduce a fund’s returns. In general, the greater the volume of buying and selling by a fund, the greater the impact that brokerage commissions will have on its returns. The Fund generally buys securities for capital appreciation, investment income or both. However, the Fund may sell securities regardless of how long they’ve been held. You’ll find the Fund’s portfolio turnover rate for its most recent fiscal year in the Fees and Expenses of the Fund — Portfolio Turnover section of this prospectus and portfolio turnover rates for prior fiscal years in the Financial Highlights section of this prospectus.

Management of the Fund

Primary Service Providers

The Adviser

Subadviser(s)

The SEC has issued an order that permits the Adviser, subject to the approval of the Board, to appoint an unaffiliated subadviser or to change the terms of a subadvisory agreement for the Fund without first obtaining shareholder approval. The order permits the Fund to add or to change unaffiliated subadvisers or to change the fees paid to subadvisers from time to time without the expense and delays associated with obtaining shareholder approval of the change. The Adviser and its affiliates may have other relationships, including significant financial relationships, with current or potential subadvisers or their affiliates, which may create certain conflicts of interest. When making recommendations to the Board to appoint or to change a subadviser, or to change the terms of a subadvisory agreement, the Adviser discloses to the Board the nature of any material relationships it has with a subadviser or its affiliates.

At present, the Adviser has not engaged any investment subadviser for the Fund.

Portfolio Managers

Alexander D. Powers

Lead manager. Service with the Fund since 2007.

Brian Lavin, CFA

Co-manager. Service with the Fund since 2010.

Portfolio Manager of the Adviser. Associated with the Adviser as an investment professional since 1994.

Carl W. Pappo, CFA

Co-manager. Service with the Fund since 2006.

Portfolio manager of the Adviser. From 1993 until joining the Adviser in May 2010, Mr. Pappo was associated with the Fund’s previous investment adviser, Columbia Management Advisors, LLC, or its predecessors as an investment professional.

Michael W. Zazzarino

Co-manager. Service with the Fund since 2010.

The Administrator

Annual Administration Fee,

as a % of Average Daily Net Assets


Columbia Total Return Bond Fund		0.15	%

The Distributor

The Transfer Agent

The Transfer Agent is a registered transfer agent and a wholly-owned subsidiary of Ameriprise Financial. The Transfer Agent’s responsibilities include processing purchases, sales and exchanges, calculating and paying distributions, keeping shareholder records, preparing account statements and providing customer service. The Fund pays the Transfer Agent monthly fees on a per-account basis. Fees paid to the Transfer Agent include reimbursements for certain out-of-pocket expenses and sub-transfer agency fees, subject to certain limitations, paid by the Transfer Agent on the Fund’s behalf.

Expense Reimbursement Arrangements

The Adviser has voluntarily agreed to reimburse a portion of the Fund’s expenses so that the Fund’s ordinary operating expenses (excluding any distribution and service fees, brokerage commissions, interest, taxes and extraordinary expenses, but including custodian charges relating to overdrafts, if any), after giving effect to any balance credits from the Fund’s custodian, do not exceed 0.70% of the Fund’s average daily net assets on an annualized basis. The Adviser, in its discretion, may revise or discontinue this arrangement at any time.

Other Roles and Relationships of Ameriprise Financial and its Affiliates—Certain Conflicts of Interest

Conflicts of interest and limitations that could affect a Columbia Fund may arise from, for example, the following:

•

compensation and other benefits received by the Adviser and other Ameriprise Financial affiliates related to the management/administration of a Columbia Fund and the sale of its shares;

•

separate and potentially divergent management of a Columbia Fund and other funds and accounts advised/managed by the Adviser and other Ameriprise Financial affiliates;

•

regulatory and other investment restrictions on investment activities of the Adviser and other Ameriprise Financial affiliates and accounts advised/managed by them;

•

insurance and other relationships of Ameriprise Financial affiliates with companies and other entities in which a Columbia Fund invests; and

•

regulatory and other restrictions relating to the sharing of information between Ameriprise Financial and its affiliates, including the Adviser, and a Columbia Fund.

Certain Legal Matters

Ameriprise Financial and certain of its affiliates have historically been involved in a number of legal, arbitration and regulatory proceedings, including routine litigation, class actions and governmental actions, concerning matters arising in connection with the conduct of their business activities. Ameriprise Financial believes that the Fund is not currently the subject of, and that neither Ameriprise Financial nor any of its affiliates is the subject of, any pending legal, arbitration or regulatory proceedings that are likely to have a material adverse effect on the Fund or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Fund. Information regarding certain pending and settled legal proceedings may be found in the Fund’s shareholder reports and in the SAI. Additionally, Ameriprise Financial is required to make 10-Q, 10-K and, as necessary, 8-K filings with the SEC on legal and regulatory matters that relate to Ameriprise Financial and its affiliates. Copies of these filings may be obtained by accessing the SEC website at www.sec.gov.

About Class Z Shares

Description of the Share Class

Share Class Features


		Class Z Shares
Eligible Investors and Minimum Initial Investments		Class Z shares are available only to certain eligible investors, which are subject to different minimum initial investment requirements. These minimum initial investment amounts range from $0 to $2,500. See Buying, Selling and Exchanging Shares – Opening an Account and Placing Orders for details.

Investment Limits		none

Conversion Features		none

Front-End Sales Charges		none

Contingent Deferred Sales Charges (CDSCs)		none

Maximum Distribution and Service Fees		none

FUNDamentals ^TM

Selling and/or Servicing Agents

The terms “selling agent” and “servicing agent” refer to the financial intermediary that employs your financial advisor. Selling and/or servicing agents include, for example, brokerage firms, banks, investment advisors, third party administrators and other financial intermediaries, including Ameriprise Financial and its affiliates.

Financial Intermediary Compensation

The Distributor and the Adviser make payments, from their own resources, to certain financial intermediaries, including other Ameriprise Financial affiliates, for marketing/sales support services relating to the Columbia Funds. Such payments are generally based upon one or more of the following factors: average net assets of the Columbia Funds sold by the Distributor attributable to that intermediary, gross sales of the Columbia Funds distributed by the Distributor attributable to that intermediary, reimbursement of ticket charges (fees that an intermediary firm charges its representatives for effecting transactions in Fund shares) or a negotiated lump sum payment. While the financial arrangements may vary for each intermediary, the support payments to any one intermediary are generally between 0.05% and 0.50% on an annual basis for payments based on average net assets of the Fund attributable to the intermediary, and between 0.05% and 0.25% on an annual basis for firms receiving a payment based on gross sales of the Columbia Funds attributable to the intermediary.

These payments for shareholder servicing support vary by financial intermediary but generally are not expected, with certain limited exceptions, to exceed 0.40% of the average aggregate value of the Fund’s shares in any financial intermediary’s program on an annual basis for those classes of shares that pay a service fee pursuant to a plan under Rule 12b-1 under the 1940 Act, and 0.45% of the average aggregate value of the Fund’s shares in any financial intermediary’s program on an annual basis for those classes of shares that do not pay a service fee pursuant to a plan under Rule 12b-1 under the 1940 Act.

Amounts paid by the Distributor and the Adviser and their affiliates are paid out of the Distributor’s and the Adviser’s own resources and do not increase the amount paid by you or the Fund. You can find further details about the payments made by the Distributor and the Adviser and their affiliates and the services provided by financial intermediaries as well as a list of the intermediaries to which the Distributor and the Adviser have agreed to make marketing support payments in the SAI. Your financial intermediary may charge you fees and commissions in addition to those described in this prospectus. You should consult with your financial intermediary and review carefully any disclosure your financial intermediary provides regarding its services and compensation. Depending on the financial arrangement in place at any particular time, a financial intermediary and its financial consultants may have a financial incentive for recommending the Fund or a particular share class over others. See Management of the Fund – Other Roles and Relationships of Ameriprise Financial and its Affiliates – Certain Conflicts of Interest for more information.

Buying, Selling and Exchanging Shares

Share Price Determination

FUNDamentals ^TM

NAV Calculation

Each of the Fund’s share classes calculates its NAV as follows:


		(Value of assets of the share class)
NAV	=	—(Liabilities of the share class)
		Number of outstanding shares of the class

Transaction Rules and Policies

Also remember that the Fund may refuse any order to buy or exchange shares. If this happens, we’ll return any money we’ve received, but no interest will be paid on that money.

Order Processing

FUNDamentals ^TM

Business Days

A business day is any day that the New York Stock Exchange (NYSE) is open. A business day ends at the close of regular trading on the NYSE, usually at 4:00 p.m. Eastern time. If the NYSE closes early, the business day ends as of the time the NYSE closes. On holidays and other days when the NYSE is closed, the Fund’s net asset value is not calculated and the Fund does not accept buy or sell orders. However, the value of the Fund’s assets may still be affected on such days to the extent that the Fund holds foreign securities that trade on days that foreign securities markets are open.

“Good Form”

An order is in “good form” if the Transfer Agent or your selling and/or servicing agent has all of the information and documentation it deems necessary to effect your order. For example, when you sell shares by letter of instruction, “good form” means that your letter has (i) complete instructions and the signatures of all account owners, (ii) a Medallion signature guarantee for amounts equal to or greater than $100,000 and (iii) any other required documents completed and attached. For the documents required for sales by corporations, agents, fiduciaries, surviving joint owners and other legal entities, call 800.345.6611.

Medallion Signature Guarantees

Written Transactions

Telephone Transactions

Telephone orders may not be as secure as written orders. Columbia Funds will take reasonable steps to confirm that telephone instructions are genuine. For example, we require proof of your identification before we will act on instructions received by telephone and may record telephone conversations. However, the Fund and its agents will not be responsible for any losses, costs or expenses resulting from an unauthorized telephone instruction when reasonable steps have been taken to confirm that telephone instructions are

genuine. Telephone orders may be difficult to complete during periods of significant economic or market change or business interruption.

Online Transactions

Once you have an account, contact Columbia Funds at 800.345.6611 for more information on account trading restrictions and the special sign-up procedures required for online transactions. The Transfer Agent has procedures in place to authenticate electronic orders you deliver through the internet. You will be required to accept the terms of an online agreement and to establish and utilize a password in order to access online account services.

You can sell up to an aggregate of $100,000 of shares through the internet in any 30-day period if you qualify for internet orders.

Customer Identification Program

Small Account Policy—Accounts Below $250

Small Account Policy—Minimum Balance Fee

Exceptions to the Above Small Account Policy (Accounts Below $250 and Minimum Balance Fee)

Small Account Policy—Broker/Dealer and Wrap Fee Accounts

Columbia Funds may automatically redeem shares at any time from broker/dealer networked accounts and wrap fee accounts that have account balances of $20 or less or that have less than one share.

Cash Flows

Information Sharing Agreements

As required by Rule 22c-2 under the 1940 Act, the Columbia Funds or certain of their service providers will enter into information sharing agreements with financial intermediaries, including participating life insurance companies and financial intermediaries that sponsor or offer retirement plans through which shares of the Columbia Funds are made available for purchase. Pursuant to Rule 22c-2, financial intermediaries are required, upon request, to: (i) provide shareholder account and transaction information and (ii) execute instructions from the Fund to restrict or prohibit further purchases of Fund shares by shareholders who have been identified by the Fund as having engaged in transactions that violate the Fund’s excessive trading policies and procedures. See Buying, Selling and Exchanging Shares – Excessive Trading Practices for more information.

Excessive Trading Practices

Some financial intermediaries apply their own restrictions or policies to underlying investor accounts, which may be more or less restrictive than those described here. This may impact the Fund’s ability to curtail excessive trading, even where it is identified. For these and other reasons, it is possible that excessive trading may occur despite the Fund’s efforts to detect and prevent it.

Risks of Excessive Trading – Excessive trading creates certain risks to the Fund’s long-term shareholders and may create the following adverse effects:

•

negative impact on the Fund’s performance;

•

potential dilution of the value of the Fund’s shares;

•

losses on the sale of investments resulting from the need to sell securities at less favorable prices;

•

increased taxable gains to the Fund’s remaining shareholders resulting from the need to sell securities to meet sell orders; and

•

increased brokerage and administrative costs.

Opening an Account and Placing Orders

Columbia Funds encourages you to consult with a financial advisor who can help you with your investment decisions and who can help you open an account. Once you have an account, you can buy, sell and exchange shares by contacting your financial advisor who will send your order to the Transfer Agent or your selling and/or servicing agent. As described in Buying, Selling and Exchanging Shares – Transaction Rules and Policies , once you have an account you can also communicate your orders directly to the Transfer Agent by mail, by telephone or online.

Buying Shares

Minimum Initial Investments

There is no minimum initial investment in Class Z shares for the following categories of eligible investors:

•

The minimum initial investment in Class Z shares for the following categories of eligible investors is $1,000:

•

The minimum initial investment in Class Z shares for the following categories of eligible investors is $2,500:

•

Any investor buying shares through a Columbia Management state tuition plan organized under Section 529 of the Internal Revenue Code.

•

Any trustee or director (or family member of a trustee or director) of a fund distributed by the Distributor.

•

Any employee (or family member of an employee) of Bank of America or one of its subsidiaries.

•

Any institutional investor who is a corporation, partnership, trust, foundation, endowment, institution, government

entity, or similar organization, which meets the respective qualifications for an accredited investor, as defined under the Securities Act of 1933.

•

For investors establishing a Systematic Investment Plan, the minimum initial investment is $50.

Minimum Additional Investments

There is no minimum additional investment for Class Z shares.

Systematic Investment Plan

Dividend Diversification

Wire Purchases

You may buy Class Z shares of the Fund by wiring money from your bank account to your Fund account by calling the Transfer Agent at 800.422.3737.

Electronic Funds Transfer

Other Purchase Rules You Should Know

•

Once the Transfer Agent or your selling and/or servicing agent receives your buy order in “good form,” your purchase will be made at the next calculated net asset value per share.

•

You generally buy Class Z shares at net asset value because no front-end sales charge applies to purchases of this share class.

•

Selling and/or servicing agents are responsible for sending your buy orders to the Transfer Agent and ensuring that we receive your money on time.

•

Shares bought are recorded on the books of the Fund. The Fund doesn’t issue certificates.

Selling Shares

When you sell your shares, the Fund is effectively buying them back from you. This is called a redemption.

Wire Redemptions

Electronic Funds Transfer

Systematic Withdrawal Plan

In-Kind Distributions

Other Redemption Rules You Should Know

•

Once the Transfer Agent or your selling and/or servicing agent receives your sell order in “good form,” your shares will be sold at the next calculated net asset value per share.

•

No interest will be paid on uncashed redemption checks.

•

Other restrictions may apply to retirement accounts. For information about these restrictions, contact your retirement plan administrator.

•

Also keep in mind Columbia Funds’ Small Account Policy, which is described above in Buying, Selling and Exchanging Shares – Transaction Rules and Policies .

Exchanging Shares

Systematic Exchanges

The rules described below for making exchanges apply to systematic exchanges.

Other Exchange Rules You Should Know

•

Exchanges are made at net asset value.

•

You can generally make exchanges between like share classes of any Columbia Fund. Some exceptions apply.

•

The rules for buying shares of a Columbia Fund generally apply to exchanges into that Fund.

•

You may make exchanges only into a Columbia Fund that is legally offered and sold in your state of residence.

•

You generally may make an exchange only into a Columbia Fund that is accepting investments.

•

The Fund may change or cancel your right to make an exchange by giving the amount of notice required by regulatory authorities (generally 60 days for a material change or cancellation).

•

Unless your account is part of a tax-advantaged arrangement, an exchange for shares of another fund is a taxable event, and you may recognize a gain or loss for tax purposes.

Distributions and Taxes

Distributions to Shareholders

A mutual fund can make money two ways:

•

It can earn income on its investments. Examples of fund income are interest paid on money market instruments and bonds, and dividends paid on common stocks.

•

FUNDamentals ^TM

Distributions

Declaration and Distribution Schedule


Declarations		daily
Distributions		monthly

The Fund may, however, pay distributions of net investment income more frequently.

Unless you are a tax-exempt investor or holding Fund shares through a tax-advantaged account (such as a 401(k) plan or IRA), you should consider avoiding buying Fund shares shortly before the Fund makes a distribution, other than distributions of net investment income that are declared daily, because doing so can cost you money in taxes. This is because you will, in effect, receive part of your purchase price back in the distribution. This is known as “buying a dividend.” To avoid “buying a dividend,” check the Fund’s distribution schedule online at www.columbiafunds.com, or by calling us at 800.345.6611, before you invest.

Taxes and Your Investment

The Fund will send you a statement each year showing how much you’ve received in distributions in the prior year and the distributions’ character for federal income tax purposes. The Fund expects that distributions will consist primarily of ordinary income. In addition, you should be aware of the following:

•

Distributions generally are taxable to you when paid, whether they are paid in cash or automatically reinvested in additional shares of the Fund.

•

FUNDamentals ^TM

Taxes

Financial Highlights

Columbia Total Return Bond Fund—Class Z Shares


	Year Ended March 31, 2010			Year Ended March 31, 2009			Year Ended March 31, 2008			Year Ended March 31, 2007			Year Ended March 31, 2006 ^(a)
Net Asset Value, Beginning of Period	$	[ ]		$	9.51		$	9.75		$	9.57		$	9.81
Income from Investment Operations:
Net investment income ^(b)		[ ]			0.45			0.48			0.47			0.37
Net realized and unrealized gain (loss) on investments, foreign currency, futures contracts and credit default swap contracts		[ ]			(0.76	)		(0.24	)		0.18			(0.16	)
Total from investment operations		[ ]			(0.31	)		0.24			0.65			0.21
Less Distributions to Shareholders:
From net investment income		[ ]			(0.48	)		(0.48	)		(0.47	)		(0.42	)
From net realized gains		[ ]			—			—			—			(0.03	)
Total distributions to shareholders		[ ]			(0.48	)		(0.48	)		(0.47	)		(0.45	)
Increase from regulatory settlement		[ ]			—	^(c)		—			—			—
Net Asset Value, End of Period	$	[ ]		$	8.72		$	9.51		$	9.75		$	9.57
Total return ^(d)		[ ]	%		(3.20	)%		2.49	%		6.91	%		2.10	% ^(e)
Ratios to Average Net Assets/Supplemental Data:
Net expenses before interest expense ^(f)		[ ]	%		0.60	%		0.60	%		0.54	%		0.54	%
Interest expense		[ ]	%		—	% ^(g)		—			—			—
Net expenses ^(f)		[ ]	%		0.60	%		0.60	%		0.54	%		0.54	%
Waiver/Reimbursement		[ ]			—			—			—			0.06	% ^(h)
Net investment income ^(f)		[ ]	%		5.03	%		4.98	%		4.85	%		4.13	%
Portfolio turnover rate		[ ]	%		223	%		253	%		320	%		199	%
Net assets, end of period (000’s)	$	[ ]		$	1,198,289		$	1,682,595		$	1,865,289		$	1,997,046

^(a)	On August 22, 2005, the Fund’s Primary A shares were renamed Class Z shares.

^(b)	Per share data was calculated using the average shares outstanding during the period.

^(c)	Rounds to less than $0.01 per share.

^(d)	Total return at net asset value assuming all distributions reinvested.

^(e)	Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

^(f)	The benefits derived from expense reductions had an impact of less than 0.01%.

^(g)	Rounds to less than 0.01%.

^(h)	Bank of America Corporation assumed certain non-recurring costs. Absent these non-recurring costs, the waiver/reimbursement ratio would have been — % and 0.06% for the periods ended March 31, 2006 and March 31, 2005, respectively.

Hypothetical Fees and Expenses

The following supplemental hypothetical investment information provides additional information about the effect of the fees and expenses of the Fund, including investment advisory fees and other Fund costs, on the Fund’s returns over a 10-year period. The chart shows the estimated fees and expenses that would be charged on a hypothetical investment of $10,000 in Class Z shares of the Fund, assuming a 5% return each year, the cumulative return after fees and expenses and the hypothetical year-end balance after fees and expenses. The chart also assumes that all dividends and distributions are reinvested. The annual expense ratio used for the share class, which is the same as that stated in the Annual Fund Operating Expenses table, is presented in the chart and is net of any contractual fee waivers or expense reimbursements for the period of contractual commitment. Your actual costs may be higher or lower.

Columbia Total Return Bond Fund—Class Z Shares


Maximum Initial Sales Charge 0.00%			Initial Hypothetical Investment Amount $10,000.00				Assumed Rate of Return 5%
Year	Cumulative Return Before Fees and Expenses		Annual Expense Ratio		Cumulative Return After Fees and Expenses		Hypothetical Year- End Balance After Fees and Expenses		Annual Fees and Expenses ^(a)
1	5.00	%	[ ]	%	[ ]	%	$	[ ]	$	[ ]
2	10.25	%	[ ]	%	[ ]	%	$	[ ]	$	[ ]
3	15.76	%	[ ]	%	[ ]	%	$	[ ]	$	[ ]
4	21.55	%	[ ]	%	[ ]	%	$	[ ]	$	[ ]
5	27.63	%	[ ]	%	[ ]	%	$	[ ]	$	[ ]
6	34.01	%	[ ]	%	[ ]	%	$	[ ]	$	[ ]
7	40.71	%	[ ]	%	[ ]	%	$	[ ]	$	[ ]
8	47.75	%	[ ]	%	[ ]	%	$	[ ]	$	[ ]
9	55.13	%	[ ]	%	[ ]	%	$	[ ]	$	[ ]
10	62.89	%	[ ]	%	[ ]	%	$	[ ]	$	[ ]
Total Gain After Fees and Expenses							$	[ ]
Total Annual Fees and Expenses Paid									$	[ ]

^(a)	Annual Fees and Expenses are calculated based on the average between the beginning and ending balance for each year. All information is calculated on an annual compounding basis.

LOGO

Columbia Total Return Bond Fund

Class Z Shares

Prospectus, August 1, 2010

For More Information


By Mail:		Columbia Funds c/o Columbia Management Investment Services Corp. P.O. Box 8081 Boston, MA 02266-8081

By Telephone:		800.345.6611

Online:		www.columbiafunds.com

Annual and Semi-Annual Reports to Shareholders

Shareholder Communications with the Board

Statement of Additional Information

The SAI provides more detailed information about the Fund and its policies. The SAI is legally part of this prospectus (incorporated by reference). A copy has been filed with the SEC.

Information Provided by the SEC

FUNDamentals™ is a trademark of Ameriprise Financial.

The investment company registration number of Columbia Funds Series Trust, of which the Fund is a series, is 811-09645.

One Financial Center, Boston, MA 02111-2621

800.345.6611 www.columbiafunds.com

INT-36/[ ]-0810

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Prospectus

August 1, 2010

Columbia Funds

Columbia Short Term Municipal Bond Fund

Ticker symbols

Class A Shares NSMMX

Class B Shares NSMNX

Class C Shares NSMUX

Table of Contents


Columbia Short Term Municipal Bond Fund		3

Investment Objective		3

Fees and Expenses of the Fund		3

Principal Investment Strategies		5

Principal Risks		5

Performance Information		7

Investment Adviser and Portfolio Manager(s)		8

Purchase and Sale of Fund Shares		8

Tax Information		8

Payments to Broker-Dealers and Other Financial Intermediaries		8

Additional Investment Strategies and Policies		9

Management of the Fund		11

Primary Service Providers		11

Other Roles and Relationships of Ameriprise Financial and its Affiliates—Certain Conflicts of Interest		13

Certain Legal Matters		14

Choosing a Share Class		15

Comparison of the Share Classes		15

Sales Charges and Commissions		16

Reductions/Waivers of Sales Charges		20

Distribution and Service Fees		22

Financial Intermediary Compensation		23

Buying, Selling and Exchanging Shares		24

Share Price Determination		24

Transaction Rules and Policies		25

Opening an Account and Placing Orders		29

Distributions and Taxes		33

Financial Highlights		36

Hypothetical Fees and Expenses		39

Icons Guide


		Investment Objective

		Fees and Expenses of the Fund

		Principal Investment Strategies

		Principal Risks

		Performance Information

		Other Roles and Relationships of Ameriprise Financial and its Affiliates - Certain Conflicts of Interest

Columbia Short Term Municipal Bond Fund

Investment Objective

The Fund seeks current income exempt from federal income tax, consistent with minimal fluctuation of principal.

Fees and Expenses of the Fund

This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $50,000 in Class A shares of eligible Columbia Funds. More information about these and other discounts is available from your financial advisor, in the Choosing a Share Class section beginning on page 15 of this prospectus and in the Purchase, Redemption and Pricing of Shares section of the Statement of Additional Information.

Shareholder Fees (fees paid directly from your investment)


	Class A Shares		Class B Shares	Class C Shares
Maximum sales charge (load) imposed on purchases, as a % of offering price	1.00	%	N/A	N/A
Maximum deferred sales charge (load) imposed on redemptions, as a % of the lower of the original purchase price or net asset value	1.00	% ^(a)	N/A	1.00	% ^(b)

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)


	Class A Shares		Class B Shares		Class C Shares
Management fees	0.43	%	0.43	%	0.43	%
Distribution and/or service (Rule 12b-1) fees	0.25	%	1.00	%	1.00	%
Other expenses	[	]%	[	]%	[	]%
Acquired fund fees and expenses	0.01	%	0.01	%	0.01	%
Total annual Fund operating expenses ^(c)	[	]%	[	]%	[	]%

^(a)	This charge applies to investors who buy $1 million or more of Class A shares and redeem them within one year of purchase, with certain limited exceptions.

^(b)	This charge applies to investors who buy Class C shares and redeem them within one year of purchase, with certain limited exceptions.

^(c)	“Total annual Fund operating expenses” do not match “Net Expenses” in the Financial Highlights section of this prospectus, which does not include, among other things, fees and expenses incurred as a result of investment in shares of certain pooled investment vehicles.

Example

The following example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds.

The example illustrates the hypothetical expenses that you would incur over the time periods indicated, and assumes that:

•

you invest $10,000 in Class A, Class B or Class C shares of the Fund for the periods indicated,

•

your investment has a 5% return each year, and

•

the Fund’s total annual operating expenses remain the same as shown in the table above.

Based on the assumptions listed above, your costs would be:

1 year

3 years

5 years

10 years

Class A Shares

[

]

[

]

[

]

[

]

Class B Shares

Assuming no redemption of shares

[

]

[

]

[

]

[

]

Assuming complete redemption of shares at the end of the period

[

]

[

]

[

]

[

]

Class C Shares

Assuming no redemption of shares

[

]

[

]

[

]

[

]

Assuming complete redemption of shares at the end of the period

[

]

[

]

[

]

[

]

Remember this is an example only. Your actual costs may be higher or lower.

Portfolio Turnover

Principal Investment Strategies

Under normal circumstances, the Fund invests at least 80% of its net assets in securities that pay interest exempt from federal income tax (but not necessarily the federal alternative minimum tax). The Fund may invest up to 20% of its net assets in securities that pay interest that is subject to taxation, including the federal alternative minimum tax. Under normal circumstances, the Fund’s dollar-weighted average maturity will be less than three years.

Columbia Management Investment Advisers, LLC, the Fund’s investment adviser (the Adviser), evaluates a number of factors in identifying investment opportunities and constructing the Fund’s portfolio. The Adviser considers local, national and global economic conditions, market conditions, interest rate movements, and other relevant factors to determine the allocation of the Fund’s assets among different issuers, industry sectors and maturities.

Principal Risks

•

than by an issuer’s taxing authority, and thus may have a greater risk of default.

•

Performance Information

Year by Year Total Return (%) as of December 31 Each Year*

LOGO

*	Year-to-date return as of June 30, 2010: [ ]%

Best and Worst Quarterly Returns During this Period


Best:	[ ] quarter [ ]:	[	]%
Worst:	[ ] quarter [ ]:	[	]%

Average Annual Total Return as of December 31, 2009

The table compares the Fund’s returns for each period with those of the Merrill Lynch 1-3 Year U.S. Municipal Index. The Merrill Lynch 1-3 Year U.S. Municipal Index tracks the performance of investment-grade U.S. tax-exempt bonds with remaining terms to final maturities of at least one year and less than three years.


	1 year		5 years		10 years
Class A shares returns before taxes	[	]%	[	]%	[	]%
Class A shares returns after taxes on distributions	[	]%	[	]%	[	]%
Class A shares returns after taxes on distributions and sale of Fund shares	[	]%	[	]%	[	]%
Class B shares returns before taxes	[	]%	[	]%	[	]%
Class C shares returns before taxes	[	]%	[	]%	[	]%
Merrill Lynch 1-3 Year U.S. Municipal Index (reflects no deductions for fees, expenses or taxes)	[	]%	[	]%	[	]%

Investment Adviser and Portfolio Manager(s)

Investment Adviser

Columbia Management Investment Advisers, LLC

Portfolio Manager

James D’Arcy, CFA

Manager. Service with the Fund since 2007.

Purchase and Sale of Fund Shares

Tax Information

Payments to Broker-Dealers and Other Financial Intermediaries

Additional Investment Strategies and Policies

Changing the Fund’s Investment Objective and Policies

Investment Guidelines

Holding Other Kinds of Investments

Investing in Money Market Funds

Lending Securities

Portfolio Holdings Disclosure

The Fund’s complete portfolio holdings as of a calendar quarter-end are disclosed approximately 30 calendar days after each such quarter-end.

In addition, more current information concerning the Fund’s portfolio holdings as of specified dates also may be disclosed on the Columbia Funds’ website.

Investing Defensively

Mailings to Households

Additional Information on Portfolio Turnover

A mutual fund that replaces, or turns over, more than 100% of its investments in a year is considered to have a high portfolio turnover rate. A high portfolio turnover rate can generate larger distributions of short-term capital gains to shareholders, which for individuals are generally taxable at higher rates than long-term capital gains for U.S. federal income tax purposes. A high portfolio turnover rate can also mean higher brokerage and other transaction costs, which could reduce a fund’s returns. In general, the greater the volume of buying and selling by a fund, the greater the impact that brokerage commissions will have on its returns. The Fund generally buys securities for capital appreciation, investment income or both. However, the Fund may sell securities regardless of how long they’ve been held. You’ll find the Fund’s portfolio turnover rate for its most recent fiscal year in the Fees and Expenses of the Fund — Portfolio Turnover section of this prospectus and portfolio turnover rates for prior fiscal years in the Financial Highlights section of this prospectus.

Management of the Fund

Primary Service Providers

The Adviser

Subadviser(s)

The SEC has issued an order that permits the Adviser, subject to the approval of the Board, to appoint an unaffiliated subadviser or to change the terms of a subadvisory agreement for the Fund without first obtaining shareholder approval. The order permits the Fund to add or to change unaffiliated subadvisers or to change the fees paid to subadvisers from time to time without the expense and delays associated with obtaining shareholder approval of the change. The Adviser and its affiliates may have other relationships, including significant financial relationships, with current or potential subadvisers or their affiliates, which may create certain conflicts of interest. When making recommendations to the Board to appoint or to change a subadviser, or to change the terms of a subadvisory agreement, the Adviser discloses to the Board the nature of any material relationships it has with a subadviser or its affiliates.

At present, the Adviser has not engaged any investment subadviser for the Fund.

Portfolio Manager

James M. D’Arcy

Manager. Service with the Fund since 2007.

The Administrator

Annual Administration Fee,

as a % of Average Daily Net Assets


Columbia Short Term Municipal Bond Fund		0.15	%

The Distributor

The Transfer Agent

The Transfer Agent is a registered transfer agent and a wholly-owned subsidiary of Ameriprise Financial. The Transfer Agent’s responsibilities include processing purchases, sales and exchanges, calculating and paying distributions, keeping shareholder records, preparing account statements and providing customer service. The Fund pays the Transfer Agent monthly fees on a per-account basis. Fees paid to the Transfer Agent include reimbursements for certain out-of-pocket expenses and sub-transfer agency fees, subject to certain limitations, paid by the Transfer Agent on the Fund’s behalf.

Expense Reimbursement Arrangements

The Adviser has voluntarily agreed to reimburse a portion of the Fund’s expenses so that the Fund’s ordinary operating expenses (excluding any distribution and service fees, brokerage commissions, interest, taxes and extraordinary expenses, but including custodian charges relating to overdrafts, if any), after giving effect to any balance credits from the Fund’s custodian, do not exceed 0.50% of the Fund’s average daily net assets on an annualized basis. The Adviser, in its discretion, may revise or discontinue this arrangement at any time.

Other Roles and Relationships of Ameriprise Financial and its Affiliates—Certain Conflicts of Interest

Conflicts of interest and limitations that could affect a Columbia Fund may arise from, for example, the following:

•

compensation and other benefits received by the Adviser and other Ameriprise Financial affiliates related to the management/administration of a Columbia Fund and the sale of its shares;

•

separate and potentially divergent management of a Columbia Fund and other funds and accounts advised/managed by the Adviser and other Ameriprise Financial affiliates;

•

regulatory and other investment restrictions on investment activities of the Adviser and other Ameriprise Financial affiliates and accounts advised/managed by them;

•

insurance and other relationships of Ameriprise Financial affiliates with companies and other entities in which a Columbia Fund invests; and

•

regulatory and other restrictions relating to the sharing of information between Ameriprise Financial and its affiliates, including the Adviser, and a Columbia Fund.

Certain Legal Matters

Ameriprise Financial and certain of its affiliates have historically been involved in a number of legal, arbitration and regulatory proceedings, including routine litigation, class actions and governmental actions, concerning matters arising in connection with the conduct of their business activities. Ameriprise Financial believes that the Fund is not currently the subject of, and that neither Ameriprise Financial nor any of its affiliates is the subject of, any pending legal, arbitration or regulatory proceedings that are likely to have a material adverse effect on the Fund or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Fund. Information regarding certain pending and settled legal proceedings may be found in the Fund’s shareholder reports and in the SAI. Additionally, Ameriprise Financial is required to make 10-Q, 10-K and, as necessary, 8-K filings with the SEC on legal and regulatory matters that relate to Ameriprise Financial and its affiliates. Copies of these filings may be obtained by accessing the SEC website at www.sec.gov.

Choosing a Share Class

Comparison of the Share Classes

Share Class Features


	Class A Shares	Class B Shares	Class C Shares
Eligible Investors and Minimum Initial Investments ^(a)	Minimum initial investments range from $0 to $2,500; the share class is available to the general public for investment.	The Fund no longer accepts investments from new or existing investors in Class B shares, except through a reinvestment of a dividend or capital gain distribution, as described in more detail under Buying, Selling and Exchanging Shares - Opening an Account and Placing Orders - Buying Shares - Class B Shares Closing .	Minimum initial investments range from $0 to $2,500; the share class is available to the general public for investment.

Investment Limits	none	up to $49,999 (based on aggregate account value) ^(b)	up to $999,999

Conversion Features	none	none	none

Front-End Sales Charges ^(c)	1.00% maximum, declining to 0.00% on investments of $1 million or more	none	none

Contingent Deferred Sales Charges (CDSCs) ^(c)	none, except a 1.00% CDSC applies to certain investments of between $1 million and $50 million sold within one year of purchase	none	1.00% on investments sold within one year of purchase

Maximum Distribution and Service Fees	0.25% combined distribution and service fee	0.75% distribution fee 0.25% service fee	0.75% distribution fee 0.25% service fee

^(a)	See Buying, Selling and Exchanging Shares – Opening an Account and Placing Orders for more details on the eligible investors and investment minimums of these share classes.

^(b)

^(c)	See Choosing a Share Class – Reductions/Waivers of Sales Charges for information about certain exceptions to these sales charges.

FUNDamentals ^TM

Selling and/or Servicing Agents

The terms “selling agent” and “servicing agent” refer to the financial intermediary that employs your financial advisor. Selling and/or servicing agents include, for example, brokerage firms, banks, investment advisors, third party administrators and other financial intermediaries, including Ameriprise Financial and its affiliates.

Sales Charges and Commissions

Class A Shares—Front-End Sales Charge

FUNDamentals ^TM

Front-End Sales Charge Calculation

The following table presents the front-end sales charge as a percentage of both the offering price and the net amount invested.

•

The offering price per share is the net asset value per share plus any front-end sales charge that applies.

•

The net asset value (or NAV) per share is the price of a share calculated by the Fund every business day.

The dollar amount of the sales charge is the difference between the offering price of the shares you buy (based on the applicable sales charge in the table) and the net asset value of those shares.

The front-end sales charge you’ll pay on Class A shares:

•

depends on the amount you’re investing (generally, the larger the investment, the smaller the percentage sales charge), and

•

is based on the total amount of your purchase and the value of your account.

Class A Shares—Front-End Sales Charge—Breakpoint Schedule


Dollar amount of shares bought ^(a)	Sales charge as a % of the offering price ^(b)		Sales charge as a % of the net amount invested ^(b)		Amount retained by or paid to selling and/or servicing agents as a % of the offering price
$0 – $99,999	1.00	%	1.01	%	0.75	%
$100,000 – $249,999	0.75	%	0.76	%	0.50	%
$250,000 – $999,999	0.50	%	0.50	%	0.40	%
$1,000,000 or more	0.00	%	0.00	%	1.00	% ^(c)(d)

^(a)	Purchase amounts and account values are aggregated among all eligible Columbia Fund accounts for the purposes of this table.

^(b)

^(c)

^(d)	For certain group retirement plans, selling and/or servicing agents are eligible to receive a 1.00% commission from the Distributor on all purchases up to $3 million, including those in amounts of less than $1 million that are coded as commission-eligible trades.

Class A Shares—CDSC and Commissions

In some cases, you’ll pay a CDSC if you sell Class A shares that you bought without an initial sales charge.

•

The CDSC on Class A shares:

•

is applied to the net asset value at the time of your purchase or sale, whichever is lower, and

•

will not be applied to any shares you receive through reinvested distributions.

The Distributor may also pay your selling and/or servicing agent a cumulative commission when you buy $1 million or more of Class A shares, according to the following schedule:

Class A Shares—Commission Schedule


Purchase Amount	Commission Level (as a % of net asset value per share)
$1 million – $2,999,999	1.00	%
$3 million – $49,999,999	0.50	%
$50 million or more	0.25	%

FUNDamentals ^TM

Contingent Deferred Sales Charge

Class B and Class C Shares—Sales Charges

You don’t pay a front-end sales charge when you buy Class B or Class C shares, but you may pay a CDSC when you sell Class C shares.

The CDSC on Class C shares:

•

is applied to the net asset value at the time of your purchase or sale, whichever is lower,

•

will not be applied to any shares you receive through reinvested distributions, and

For purposes of calculating the CDSC, the start of the holding period is the first day of the month in which your purchase was made. When you place an order to sell your Class C shares, the Fund will first redeem any shares that aren’t subject to a CDSC followed by those you have held the longest.

Class B Shares—Commissions

If you are an investor who purchased Class B shares prior to their closing (except for certain limited transactions), the Distributor paid an up-front commission directly to your selling and/or servicing agent of up to 4.00% of the net asset value per share when you bought the Class B shares. The Distributor continues to seek to recover this commission through distribution fees it receives under the Fund’s distribution plan and any applicable CDSC paid when you sell your shares. See Choosing a Share Class – Distribution and Service Fees for details.

Class C Shares—CDSC and Commissions

The Distributor pays an up-front commission directly to your selling and/or servicing agent of up to 1.00% of the net asset

value per share when you buy Class C shares. The Distributor seeks to recover this commission through distribution fees it receives under the Fund’s distribution plan and any applicable CDSC applied when you sell your shares. See Choosing a Share Class – Distribution and Service Fees for details.

Reductions/Waivers of Sales Charges

Front-End Sales Charge Reductions

FUNDamentals ^TM

Your “Immediate Family” and Account Value Aggregation

Eligible Accounts

The types of accounts that are eligible for the account value aggregation purposes described above are:

•

individual accounts,

•

joint accounts,

•

certain IRA accounts,

•

certain health savings accounts,

•

certain trust accounts, and

•

Uniform Gifts to Minors Act (UGMA)/Uniform Transfers to Minors Act (UTMA) accounts.

Eligible accounts do not include Class R share accounts or accounts holding shares of money market funds that used the Columbia brand before May 1, 2010.

Front-End Sales Charge Waivers

CDSC Waivers

You may be able to avoid an otherwise applicable CDSC when you sell Class A or Class C shares of the Fund. This could happen because of the way in which you originally invested in the Fund, because of your relationship with the Columbia Funds or for other reasons.

Generally, a CDSC that would otherwise be applied may be waived for certain sales, including sales made under the Systematic Withdrawal Plan; in connection with the death or post-purchase disability of a shareholder; certain medical expenses; charitable gifts; involuntary sales; and agreements by selling and/or servicing agents to waive or return their commissions. Restrictions may apply to certain accounts and certain transactions.

The Fund may change or cancel these terms at any time. Any change or cancellation applies only to future purchases.

For more information about the sales charge reductions and waivers described here, consult the SAI.

Distribution and Service Fees

The table below shows the maximum annual distribution and service fees (as an annual % of average daily net assets) and the combined amount of such fees applicable to each share class:

Distribution and Service (Rule 12b-1) Fees


	Distribution Fee		Service Fee		Combined Total
Class A	—	^(a)	—	^(a)	0.25	% ^(a)
Class B	0.75	%	0.25	%	1.00	%
Class C	0.75	%	0.25	%	1.00	%

^(a)	The Fund’s Class A shares pay a combined distribution and service fee pursuant to the Fund’s combined distribution and shareholder servicing plan for Class A shares.

Financial Intermediary Compensation

The Distributor and the Adviser make payments, from their own resources, to certain financial intermediaries, including other Ameriprise Financial affiliates, for marketing/sales support services relating to the Columbia Funds. Such payments are generally based upon one or more of the following factors: average net assets of the Columbia Funds sold by the Distributor attributable to that intermediary, gross sales of the Columbia Funds distributed by the Distributor attributable to that intermediary, reimbursement of ticket charges (fees that an intermediary firm charges its representatives for effecting transactions in Fund shares) or a negotiated lump sum payment. While the financial arrangements may vary for each intermediary, the support payments to any one intermediary are generally between 0.05% and 0.50% on an annual basis for payments based on average net assets of the Fund attributable to the intermediary, and between 0.05% and 0.25% on an annual basis for firms receiving a payment based on gross sales of the Columbia Funds attributable to the intermediary.

These payments for shareholder servicing support vary by financial intermediary but generally are not expected, with certain limited exceptions, to exceed 0.40% of the average aggregate value of the Fund’s shares in any financial intermediary’s program on an annual basis for those classes of shares that pay a service fee pursuant to a plan under Rule 12b-1 under the 1940 Act, and 0.45% of the average aggregate value of the Fund’s shares in any financial intermediary’s program on an annual basis for those classes of shares that do not pay a service fee pursuant to a plan under Rule 12b-1 under the 1940 Act.

Amounts paid by the Distributor and the Adviser and their affiliates are paid out of the Distributor’s and the Adviser’s own resources and do not increase the amount paid by you or the Fund. You can find further details about the payments made by the Distributor and the Adviser and their affiliates and the services provided by financial intermediaries as well as a list of the intermediaries to which the Distributor and the Adviser have agreed to make marketing support payments in the SAI. Your financial intermediary may charge you fees and commissions in addition to those described in this prospectus. You should consult with your financial intermediary and review carefully any disclosure your financial intermediary provides regarding its services and compensation. Depending on the financial arrangement in place at any particular time, a financial intermediary and its financial consultants may have a financial incentive for recommending the Fund or a particular share class over others. See Management of the Fund – Other Roles and Relationships of Ameriprise Financial and its Affiliates – Certain Conflicts of Interest for more information.

Buying, Selling and Exchanging Shares

Share Price Determination

FUNDamentals ^™

NAV Calculation

Each of the Fund’s share classes calculates its NAV as follows:

Transaction Rules and Policies

Also remember that the Fund may refuse any order to buy or exchange shares. If this happens, we’ll return any money we’ve received, but no interest will be paid on that money.

Order Processing

FUNDamentals ^™

Business Days

A business day is any day that the New York Stock Exchange (NYSE) is open. A business day ends at the close of regular trading on the NYSE, usually at 4:00 p.m. Eastern time. If the NYSE closes early, the business day ends as of the time the NYSE closes. On holidays and other days when the NYSE is closed, the Fund’s net asset value is not calculated and the Fund does not accept buy or sell orders. However, the value of the Fund’s assets may still be affected on such days to the extent that the Fund holds foreign securities that trade on days that foreign securities markets are open.

“Good Form”

An order is in “good form” if the Transfer Agent or your selling and/or servicing agent has all of the information and documentation it deems necessary to effect your order. For example, when you sell shares by letter of instruction, “good form” means that your letter has (i) complete instructions and the signatures of all account owners, (ii) a Medallion signature guarantee for amounts equal to or greater than $100,000 and (iii) any other required documents completed and attached. For the documents required for sales by corporations, agents, fiduciaries, surviving joint owners and other legal entities, call 800.345.6611.

Medallion Signature Guarantees

Written Transactions

Telephone Transactions

Telephone orders may not be as secure as written orders. Columbia Funds will take reasonable steps to confirm that telephone instructions are genuine. For example, we require proof of your identification before we will act on instructions received by telephone and may record telephone conversations. However, the Fund and its agents will not be responsible for any losses, costs or expenses resulting from an unauthorized telephone instruction when reasonable steps have been taken to confirm that telephone instructions are

genuine. Telephone orders may be difficult to complete during periods of significant economic or market change or business interruption.

Online Transactions

Once you have an account, contact Columbia Funds at 800.345.6611 for more information on account trading restrictions and the special sign-up procedures required for online transactions. The Transfer Agent has procedures in place to authenticate electronic orders you deliver through the internet. You will be required to accept the terms of an online agreement and to establish and utilize a password in order to access online account services.

You can sell up to an aggregate of $100,000 of shares through the internet in any 30-day period if you qualify for internet orders.

Customer Identification Program

Small Account Policy—Accounts Below $250

Small Account Policy—Minimum Balance Fee

Exceptions to the Above Small Account Policy (Accounts Below $250 and Minimum Balance Fee)

Small Account Policy—Broker/Dealer and Wrap Fee Accounts

Columbia Funds may automatically redeem shares at any time from broker/dealer networked accounts and wrap fee accounts that have account balances of $20 or less or that have less than one share.

Cash Flows

Information Sharing Agreements

As required by Rule 22c-2 under the 1940 Act, the Columbia Funds or certain of their service providers will enter into information sharing agreements with financial intermediaries, including participating life insurance companies and financial intermediaries that sponsor or offer retirement plans through which shares of the Columbia Funds are made available for purchase. Pursuant to Rule 22c-2, financial intermediaries are required, upon request, to: (i) provide shareholder account and transaction information and (ii) execute instructions from the Fund to restrict or prohibit further purchases of Fund shares by shareholders who have been identified by the Fund as having engaged in transactions that violate the Fund’s excessive trading policies and procedures. See Buying, Selling and Exchanging Shares – Excessive Trading Practices for more information.

Excessive Trading Practices

Some financial intermediaries apply their own restrictions or policies to underlying investor accounts, which may be more or less restrictive than those described here. This may impact the Fund’s ability to curtail excessive trading, even where it is identified. For these and other reasons, it is possible that excessive trading may occur despite the Fund’s efforts to detect and prevent it.

Risks of Excessive Trading – Excessive trading creates certain risks to the Fund’s long-term shareholders and may create the following adverse effects:

•

negative impact on the Fund’s performance;

•

potential dilution of the value of the Fund’s shares;

•

losses on the sale of investments resulting from the need to sell securities at less favorable prices;

•

increased taxable gains to the Fund’s remaining shareholders resulting from the need to sell securities to meet sell orders; and

•

increased brokerage and administrative costs.

Opening an Account and Placing Orders

Columbia Funds encourages you to consult with a financial advisor who can help you with your investment decisions and who can help you open an account. Once you have an account, you can buy, sell and exchange shares by contacting your financial advisor who will send your order to the Transfer Agent or your selling and/or servicing agent. As described in Buying, Selling and Exchanging Shares – Transaction Rules and Policies , once you have an account you can also communicate your orders directly to the Transfer Agent by mail, by telephone or online.

Buying Shares

Eligible Investors

Class B Shares Closing

Additional Class B shares will be issued only to existing investors in Class B shares and only through the following two types of transactions (Qualifying Transactions):

•

Dividends and/or capital gain distributions may continue to be reinvested in Class B shares of the Fund.

•

Shareholders invested in Class B shares of the Fund may exchange those shares for Class B shares of other Columbia Funds offering such shares.

Any initial purchase orders for the Fund’s Class B shares will be rejected (other than through a Qualifying Transaction that is an exchange transaction).

Minimum Initial Investments

Minimum Additional Investments

There is no minimum additional investment for Class A or Class C shares.

Systematic Investment Plan

Dividend Diversification

Wire Purchases

You may buy Class A or Class C shares of the Fund by wiring money from your bank account to your Fund account by calling the Transfer Agent at 800.422.3737.

Electronic Funds Transfer

Other Purchase Rules You Should Know

•

You generally buy Class A shares at the public offering price per share because purchases of Class A shares are generally subject to a front-end sales charge.

•

You buy Class B and Class C shares at net asset value per share because no front-end sales charge applies to purchases of these share classes.

•

Selling and/or servicing agents are responsible for sending your buy orders to the Transfer Agent and ensuring that we receive your money on time.

•

Shares bought are recorded on the books of the Fund. The Fund doesn’t issue certificates.

Selling Shares

When you sell your shares, the Fund is effectively buying them back from you. This is called a redemption.

Wire Redemptions

Electronic Funds Transfer

Systematic Withdrawal Plan

guaranteed.

In-Kind Distributions

Other Redemption Rules You Should Know

•

No interest will be paid on uncashed redemption checks.

•

Other restrictions may apply to retirement accounts. For information about these restrictions, contact your retirement plan administrator.

•

Also keep in mind Columbia Funds’ Small Account Policy, which is described above in Buying, Selling and Exchanging Shares – Transaction Rules and Policies .

Exchanging Shares

The Fund no longer accepts exchanges into Class B shares of the Fund.

Systematic Exchanges

were not assessed a sales charge at the time of your initial purchase.

The rules described below for making exchanges apply to systematic exchanges.

Other Exchange Rules You Should Know

•

Exchanges are made at net asset value.

•

You can generally make exchanges between like share classes of any Columbia Fund. Some exceptions apply.

•

A sales charge may apply when you exchange shares of a Columbia Fund that were not assessed a sales charge at the time of your initial purchase.

•

The rules for buying shares of a Columbia Fund generally apply to exchanges into that Fund.

•

You may make exchanges only into a Columbia Fund that is legally offered and sold in your state of residence.

•

You generally may make an exchange only into a Columbia Fund that is accepting investments.

•

The Fund may change or cancel your right to make an exchange by giving the amount of notice required by regulatory authorities (generally 60 days for a material change or cancellation).

•

Unless your account is part of a tax-advantaged arrangement, an exchange for shares of another fund is a taxable event, and you may recognize a gain or loss for tax purposes.

Same-Fund Exchange Privilege for Class Z Shares

Distributions and Taxes

Distributions to Shareholders

A mutual fund can make money two ways:

•

It can earn income on its investments. Examples of fund income are interest paid on money market instruments and bonds, and dividends paid on common stocks.

•

FUNDamentals ^™

Distributions

Declaration and Distribution Schedule


Declarations		daily
Distributions		monthly

The Fund may, however, pay distributions of net investment income more frequently.

If you buy shares of the Fund when it holds securities with unrealized capital gain, you may, in effect, receive part of your purchase price back if and when the Fund sells those

Taxes and Your Investment

•

To the extent distributions are taxable, such distributions generally are taxable to you when paid, whether they are paid in cash or automatically reinvested in additional shares of the Fund.

•

backup withholding.

FUNDamentals ^™

Taxes

Financial Highlights

Columbia Short Term Municipal Bond Fund—Class A Shares


	Year Ended March 31, 2010			Year Ended March 31, 2009			Year Ended March 31, 2008			Year Ended March 31, 2007			Year Ended March 31, 2006 ^(a)
Net Asset Value, Beginning of Period	$	[	]	$	10.32		$	10.17		$	10.14		$	10.21
Income from Investment Operations:
Net investment income (b)		[	]		0.27			0.32			0.30			0.22
Net realized and unrealized gain (loss) on investments		[	]		0.15			0.15			0.03			(0.04	)
Total from investment operations		[	]		0.42			0.47			0.33			0.18
Less Distributions to Shareholders:
From net investment income		[	]		(0.28	)		(0.32	)		(0.30	)		(0.25	)
Net Asset Value, End of Period	$	[	]	$	10.46		$	10.32		$	10.17		$	10.14
Total return (c)(d)		[	]%		4.14	%		4.66	%		3.30	%		1.80	%
Ratios to Average Net Assets/Supplemental Data:
Net expenses before interest expense		[	]%		0.65	% ^(e)		0.65	% ^(e)		0.65	% ^(e)		0.65	% ^(e)
Interest expense (f)		[	]%		—	%		—	%		—	%		—	%
Net expenses		[	]%		0.65	% ^(e)		0.65	% ^(e)		0.65	% ^(e)		0.65	% ^(e)
Waiver/Reimbursement		[	]%		0.07	%		0.11	%		0.11	%		0.08	%
Net investment income		[	]%		2.60	% ^(e)		3.09	% ^(e)		2.95	% ^(e)		2.47	% ^(e)
Portfolio turnover rate		[	]%		94	%		73	%		98	%		13	%
Net assets, end of period (000’s)	$	[	]	$	209,539		$	31,952		$	32,855		$	52,003

^(a)	On August 22, 2005, the Fund’s Investor A shares were renamed Class A shares.

^(b)	Per share data was calculated using the average shares outstanding during the period.

^(c)	Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge.

^(d)	Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

^(e)	The benefits derived from expense reductions had an impact of less than 0.01%.

^(f)	Rounds to less than 0.01%.

Columbia Short Term Municipal Bond Fund—Class B Shares


	Year Ended March 31, 2010			Year Ended March 31, 2009			Year Ended March 31, 2008			Year Ended March 31, 2007			Year Ended March 31, 2006 ^(a)
Net Asset Value, Beginning of Period	$	[	]	$	10.32		$	10.17		$	10.14		$	10.21
Income from Investment Operations:
Net investment income (b)		[	]		0.20			0.24			0.22			0.16
Net realized and unrealized gain (loss) on investments		[	]		0.14			0.15			0.03			(0.05	)
Total from investment operations		[	]		0.34			0.39			0.25			0.11
Less Distributions to Shareholders:
From net investment income		[	]		(0.20	)		(0.24	)		(0.22	)		(0.18	)
Net Asset Value, End of Period	$	[	]	$	10.46		$	10.32		$	10.17		$	10.14
Total return (c)(d)		[	]%		3.37	%		3.88	%		2.54	%		1.04	%
Ratios to Average Net Assets/Supplemental Data:
Net expenses before interest expense		[	]%		1.40	% ^(e)		1.40	% ^(e)		1.40	% ^(e)		1.40	% ^(e)
Interest expense (f)		[	]%		—	%		—	%		—	%		—	%
Net expenses		[	]%		1.40	% ^(e)		1.40	% ^(e)		1.40	% ^(e)		1.40	% ^(e)
Waiver/Reimbursement		[	]%		0.07	%		0.11	%		0.11	%		0.08	%
Net investment income		[	]%		1.98	% ^(e)		2.35	% ^(e)		2.20	% ^(e)		1.72	% ^(e)
Portfolio turnover rate		[	]%		94	%		73	%		98	%		13	%
Net assets, end of period (000’s)	$	[	]	$	458		$	615		$	739		$	904

^(a)	On August 22, 2005, the Fund’s Investor B shares were renamed Class B shares.

^(b)	Per share data was calculated using the average shares outstanding during the period.

^(c)	Total return at net asset value assuming all distributions reinvested.

^(d)	Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

^(e)	The benefits derived from expense reductions had an impact of less than 0.01%.

^(f)	Rounds to less than 0.01%.

Columbia Short Term Municipal Bond Fund—Class C Shares


	Year Ended March 31, 2010			Year Ended March 31, 2009			Year Ended March 31, 2008			Year Ended March 31, 2007			Year Ended March 31, 2006 ^(a)
Net Asset Value, Beginning of Period	$	[	]	$	10.32		$	10.17		$	10.14		$	10.21
Income from Investment Operations:
Net investment income (b)		[	]		0.20			0.24			0.22			0.16
Net realized and unrealized gain (loss) on investments		[	]		0.14			0.15			0.03			(0.05	)
Total from investment operations		[	]		0.34			0.39			0.25			0.11
Less Distributions to Shareholders:
From net investment income		[	]		(0.20	)		(0.24	)		(0.22	)		(0.18	)
Net Asset Value, End of Period	$	[	]	$	10.46		$	10.32		$	10.17		$	10.14
Total return (c)(d)		[	]%		3.37	%		3.88	%		2.53	%		1.04	%
Ratios to Average Net Assets/Supplemental Data:
Net expenses before interest expense		[	]%		1.40	% ^(e)		1.40	% ^(e)		1.40	% ^(e)		1.40	% ^(e)
Interest expense (f)		[	]%		—	%		—	%		—	%		—	%
Net expenses		[	]%		1.40	% ^(e)		1.40	% ^(e)		1.40	% ^(e)		1.40	% ^(e)
Waiver/Reimbursement		[	]%		0.07	%		0.11	%		0.11	%		0.08	%
Net investment income		[	]%		1.92	% ^(e)		2.35	% ^(e)		2.20	% ^(e)		1.72	% ^(e)
Portfolio turnover rate		[	]%		94	%		73	%		98	%		13	%
Net assets, end of period (000’s)	$	[	]	$	32,750		$	14,816		$	16,549		$	22,848

^(a)	On August 22, 2005, the Fund’s Investor C shares were renamed Class C shares.

^(b)	Per share data was calculated using the average shares outstanding during the period.

^(c)	Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge.

^(d)	Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

^(e)	The benefits derived from expense reductions had an impact of less than 0.01%.

^(f)	Rounds to less than 0.01%.

Hypothetical Fees and Expenses

The following supplemental hypothetical investment information provides additional information about the effect of the fees and expenses of the Fund, including investment advisory fees and other Fund costs, on the Fund’s returns over a 10-year period. The charts show the estimated fees and expenses that would be charged on a hypothetical investment of $10,000 in each share class of the Fund, assuming a 5% return each year, the cumulative return after fees and expenses and the hypothetical year-end balance after fees and expenses. The charts also assume that all dividends and distributions are reinvested. The annual expense ratio used for each share class, which is the same as that stated in the Annual Fund Operating Expenses table, is presented in the charts and is net of any contractual fee waivers or expense reimbursements for the period of contractual commitment. Your actual costs may be higher or lower. The charts shown below reflect the maximum initial sales charge. If contingent deferred sales charges were reflected, the “Hypothetical Year-End Balance After Fees and Expenses” amounts shown would be lower and the “Annual Fees and Expenses” amounts shown would be higher.

Columbia Short Term Municipal Bond Fund—Class A Shares

Maximum Initial Sales Charge 1.00%

Initial Hypothetical Investment Amount
$10,000.00

Assumed Rate of Return 5%

Year

Cumulative Return
Before Fees and
Expenses

Annual Expense
Ratio

Cumulative Return
After Fees and
Expenses

Hypothetical Year-
End Balance After
Fees and Expenses

Annual Fees and
Expenses ^(a)

5.00

[

]% ^(b)

[

]

[

]

10.25

[

]

[

]

15.76

[

]

[

]

21.55

[

]

[

]

27.63

[

]

[

]

34.01

[

]

[

]

40.71

[

]

[

]

47.75

[

]

[

]

55.13

[

]

[

]

62.89

[

]

[

]

Total Gain After Fees and Expenses

[

]

Total Annual Fees and Expenses Paid

[

]

^(a)	Annual Fees and Expenses are calculated based on the average between the beginning and ending balance for each year. All information is calculated on an annual compounding basis.

^(b)	Reflects deduction of the maximum initial sales charge.

Columbia Short Term Municipal Bond Fund—Class B Shares

Maximum Initial Sales Charge 0.00%

Initial Hypothetical Investment Amount
$10,000.00

Assumed Rate of Return 5%

Year

Cumulative Return
Before Fees and
Expenses

Annual Expense
Ratio

Cumulative Return
After Fees and
Expenses

Hypothetical Year-
End Balance After
Fees and Expenses

Annual Fees and
Expenses ^(a)

5.00

[

]

[

]

10.25

[

]

[

]

15.76

[

]

[

]

21.55

[

]

[

]

27.63

[

]

[

]

34.01

[

]

[

]

40.71

[

]

[

]

47.75

[

]

[

]

55.13

[

]

[

]

62.89

[

]

[

]

Total Gain After Fees and Expenses

[

]

Total Annual Fees and Expenses Paid

[

]

^(a)	Annual Fees and Expenses are calculated based on the average between the beginning and ending balance for each year. All information is calculated on an annual compounding basis.

Columbia Short Term Municipal Bond Fund—Class C Shares

Maximum Initial Sales Charge 0.00%

Initial Hypothetical Investment Amount
$10,000.00

Assumed Rate of Return 5%

Year

Cumulative Return
Before Fees and
Expenses

Annual Expense
Ratio

Cumulative Return
After Fees and
Expenses

Hypothetical Year-
End Balance After
Fees and Expenses

Annual Fees and
Expenses ^(a)

5.00

[

]

[

]

10.25

[

]

[

]

15.76

[

]

[

]

21.55

[

]

[

]

27.63

[

]

[

]

34.01

[

]

[

]

40.71

[

]

[

]

47.75

[

]

[

]

55.13

[

]

[

]

62.89

[

]

[

]

Total Gain After Fees and Expenses

[

]

Total Annual Fees and Expenses Paid

[

]

^(a)	Annual Fees and Expenses are calculated based on the average between the beginning and ending balance for each year. All information is calculated on an annual compounding basis.

LOGO

Columbia Short Term Municipal Bond Fund

Class A, Class B and Class C Shares

Prospectus, August 1, 2010

For More Information


By Mail:		Columbia Funds c/o Columbia Management Investment Services Corp. P.O. Box 8081 Boston, MA 02266-8081

By Telephone:		800.345.6611

Online:		www.columbiafunds.com

Annual and Semi-Annual Reports to Shareholders

Shareholder Communications with the Board

Statement of Additional Information

The SAI provides more detailed information about the Fund and its policies. The SAI is legally part of this prospectus (incorporated by reference). A copy has been filed with the SEC.

Information Provided by the SEC

FUNDamentals™ is a trademark of Ameriprise Financial.

The investment company registration number of Columbia Funds Series Trust, of which the Fund is a series, is 811-09645.

One Financial Center, Boston, MA 02111-2621

800.345.6611 www.columbiafunds.com

INT-36/[ ]-0810

LOGO

Prospectus

August 1, 2010

Columbia Funds

Columbia Short Term Municipal Bond Fund

Ticker symbol

Class Z Shares NSMIX

Table of Contents


Columbia Short Term Municipal Bond Fund		3

Investment Objective		3

Fees and Expenses of the Fund		3

Principal Investment Strategies		5

Principal Risks		5

Performance Information		7

Investment Adviser and Portfolio Manager(s)		8

Purchase and Sale of Fund Shares		8

Tax Information		8

Payments to Broker-Dealers and Other Financial Intermediaries		8

Additional Investment Strategies and Policies		9

Management of the Fund		11

Primary Service Providers		11

Other Roles and Relationships of Ameriprise Financial and its Affiliates—Certain Conflicts of Interest		13

Certain Legal Matters		14

About Class Z Shares		15

Description of the Share Class		15

Financial Intermediary Compensation		16

Buying, Selling and Exchanging Shares		17

Share Price Determination		17

Transaction Rules and Policies		18

Opening an Account and Placing Orders		22

Distributions and Taxes		26

Financial Highlights		29

Hypothetical Fees and Expenses		30

Icons Guide

Investment Objective

Fees and Expenses of the Fund

Principal Investment Strategies

Principal Risks

LOGO Performance Information

LOGO Other Roles and Relationships of Ameriprise Financial and its Affiliates - Certain Conflicts of Interest

Columbia Short Term Municipal Bond Fund

Investment Objective

The Fund seeks current income exempt from federal income tax, consistent with minimal fluctuation of principal.

Fees and Expenses of the Fund

This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.

Shareholder Fees (fees paid directly from your investment)


		Class Z Shares
Maximum sales charge (load) imposed on purchases, as a % of offering price		N/A
Maximum deferred sales charge (load) imposed on redemptions, as a % of the lower of the original purchase price or net asset value		N/A

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)


	Class Z Shares
Management fees	0.43	%
Distribution and/or service (Rule 12b-1) fees	0.00	%
Other expenses	[	]%
Acquired fund fees and expenses	0.01	%
Total annual Fund operating expenses ^(a)	[	]%

^(a)	“Total annual Fund operating expenses” do not match “Net Expenses” in the Financial Highlights section of this prospectus, which does not include, among other things, fees and expenses incurred as a result of investment in shares of certain pooled investment vehicles.

Example

The following example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds.

The example illustrates the hypothetical expenses that you would incur over the time periods indicated, and assumes that:

•

you invest $10,000 in Class Z shares of the Fund for the periods indicated,

•

your investment has a 5% return each year, and

•

the Fund’s total annual operating expenses remain the same as shown in the table above.

Based on the assumptions listed above, your costs would be:

1 year

3 years

5 years

10 years

Class Z Shares

[

]

[

]

[

]

[

]

Remember this is an example only. Your actual costs may be higher or lower.

Portfolio Turnover

Principal Investment Strategies

Under normal circumstances, the Fund invests at least 80% of its net assets in securities that pay interest exempt from federal income tax (but not necessarily the federal alternative minimum tax). The Fund may invest up to 20% of its net assets in securities that pay interest that is subject to taxation, including the federal alternative minimum tax. Under normal circumstances, the Fund’s dollar-weighted average maturity will be less than three years.

Principal Risks

•

than by an issuer’s taxing authority, and thus may have a greater risk of default.

•

Performance Information

Year by Year Total Return (%) as of December 31 Each Year ^*

The bar chart below shows you how the performance of the Fund’s Class Z shares has varied from year to year.

LOGO

*	Year-to-date return as of June 30, 2010: [ ]%

Best and Worst Quarterly Returns During this Period


Best:	[ ] quarter [ ]:	[ ]%
Worst:	[ ] quarter [ ]:	[ ]%

Average Annual Total Return as of December 31, 2009


	1 year		5 years		10 years
Class Z shares returns before taxes	[	]%	[	]%	[	]%
Class Z shares returns after taxes on distributions	[	]%	[	]%	[	]%
Class Z shares returns after taxes on distributions and sale of Fund shares	[	]%	[	]%	[	]%
Merrill Lynch 1-3 Year U.S. Municipal Index (reflects no deductions for fees, expenses or taxes)	[	]%	[	]%	[	]%

Investment Adviser and Portfolio Manager(s)

Investment Adviser

Columbia Management Investment Advisers, LLC

Portfolio Manager

James D’Arcy, CFA

Manager. Service with the Fund since 2007.

Purchase and Sale of Fund Shares

Tax Information

Payments to Broker-Dealers and Other Financial Intermediaries

Additional Investment Strategies and Policies

Changing the Fund’s Investment Objective and Policies

Investment Guidelines

Holding Other Kinds of Investments

Investing in Money Market Funds

Lending Securities

Portfolio Holdings Disclosure

The Fund’s complete portfolio holdings as of a calendar quarter-end are disclosed approximately 30 calendar days after each such quarter-end.

In addition, more current information concerning the Fund’s portfolio holdings as of specified dates also may be disclosed on the Columbia Funds’ website.

Investing Defensively

Mailings to Households

Additional Information on Portfolio Turnover

A mutual fund that replaces, or turns over, more than 100% of its investments in a year is considered to have a high portfolio turnover rate. A high portfolio turnover rate can generate larger distributions of short-term capital gains to shareholders, which for individuals are generally taxable at higher rates than long-term capital gains for U.S. federal income tax purposes. A high portfolio turnover rate can also mean higher brokerage and other transaction costs, which could reduce a fund’s returns. In general, the greater the volume of buying and selling by a fund, the greater the impact that brokerage commissions will have on its returns. The Fund generally buys securities for capital appreciation, investment income or both. However, the Fund may sell securities regardless of how long they’ve been held. You’ll find the Fund’s portfolio turnover rate for its most recent fiscal year in the Fees and Expenses of the Fund – Portfolio Turnover section of this prospectus and portfolio turnover rates for prior fiscal years in the Financial Highlights section of this prospectus.

Management of the Fund

Primary Service Providers

The Adviser

Subadviser(s)

The SEC has issued an order that permits the Adviser, subject to the approval of the Board, to appoint an unaffiliated subadviser or to change the terms of a subadvisory agreement for the Fund without first obtaining shareholder approval. The order permits the Fund to add or to change unaffiliated subadvisers or to change the fees paid to subadvisers from time to time without the expense and delays associated with obtaining shareholder approval of the change. The Adviser and its affiliates may have other relationships, including significant financial relationships, with current or potential subadvisers or their affiliates, which may create certain conflicts of interest. When making recommendations to the Board to appoint or to change a subadviser, or to change the terms of a subadvisory agreement, the Adviser discloses to the Board the nature of any material relationships it has with a subadviser or its affiliates.

At present, the Adviser has not engaged any investment subadviser for the Fund.

Portfolio Manager

James M. D’Arcy

Manager. Service with the Fund since 2007.

The Administrator

Annual Administration Fee,

as a % of Average Daily Net Assets


Columbia Short Term Municipal Bond Fund		0.15%

The Distributor

The Transfer Agent

The Transfer Agent is a registered transfer agent and a wholly-owned subsidiary of Ameriprise Financial. The Transfer Agent’s responsibilities include processing purchases, sales and exchanges, calculating and paying distributions, keeping shareholder records, preparing account statements and providing customer service. The Fund pays the Transfer Agent monthly fees on a per-account basis. Fees paid to the Transfer Agent include reimbursements for certain out-of-pocket expenses and sub-transfer agency fees, subject to certain limitations, paid by the Transfer Agent on the Fund’s behalf.

Expense Reimbursement Arrangements

The Adviser has voluntarily agreed to reimburse a portion of the Fund’s expenses so that the Fund’s ordinary operating expenses (excluding any distribution and service fees, brokerage commissions, interest, taxes and extraordinary expenses, but including custodian charges relating to overdrafts, if any), after giving effect to any balance credits from the Fund’s custodian, do not exceed 0.50% of the Fund’s average daily net assets on an annualized basis. The Adviser, in its discretion, may revise or discontinue this arrangement at any time.

Other Roles and Relationships of Ameriprise Financial and its Affiliates—Certain Conflicts of Interest

Conflicts of interest and limitations that could affect a Columbia Fund may arise from, for example, the following:

•

compensation and other benefits received by the Adviser and other Ameriprise Financial affiliates related to the management/administration of a Columbia Fund and the sale of its shares;

•

separate and potentially divergent management of a Columbia Fund and other funds and accounts advised/managed by the Adviser and other Ameriprise Financial affiliates;

•

regulatory and other investment restrictions on investment activities of the Adviser and other Ameriprise Financial affiliates and accounts advised/managed by them;

•

insurance and other relationships of Ameriprise Financial affiliates with companies and other entities in which a Columbia Fund invests; and

•

regulatory and other restrictions relating to the sharing of information between Ameriprise Financial and its affiliates, including the Adviser, and a Columbia Fund.

Additional information about Ameriprise Financial and the types of conflicts of interest and other matters referenced above is set forth in the “Investment Advisory and Other Services – Other Roles and Relationships of Ameriprise Financial and its Affiliates – Certain Conflicts of Interest ” section of the SAI, which is identified by the icon. Investors in the Columbia Funds should carefully review these disclosures and consult with their financial advisor if they have any questions.

Certain Legal Matters

Ameriprise Financial and certain of its affiliates have historically been involved in a number of legal, arbitration and regulatory proceedings, including routine litigation, class actions and governmental actions, concerning matters arising in connection with the conduct of their business activities. Ameriprise Financial believes that the Fund is not currently the subject of, and that neither Ameriprise Financial nor any of its affiliates is the subject of, any pending legal, arbitration or regulatory proceedings that are likely to have a material adverse effect on the Fund or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Fund. Information regarding certain pending and settled legal proceedings may be found in the Fund’s shareholder reports and in the SAI. Additionally, Ameriprise Financial is required to make 10-Q, 10-K and, as necessary, 8-K filings with the SEC on legal and regulatory matters that relate to Ameriprise Financial and its affiliates. Copies of these filings may be obtained by accessing the SEC website at www.sec.gov.

About Class Z Shares

Description of the Share Class

Share Class Features


		Class Z Shares
Eligible Investors and Minimum Initial Investments		Class Z shares are available only to certain eligible investors, which are subject to different minimum initial investment requirements. These minimum initial investment amounts range from $0 to $2,500. See Buying, Selling and Exchanging Shares – Opening an Account and Placing Orders for details.

Investment Limits		none

Conversion Features		none

Front-End Sales Charges		none

Contingent Deferred Sales Charges (CDSCs)		none

Maximum Distribution and Service Fees		none

FUNDamentals ^TM

Selling and/or Servicing Agents

The terms “selling agent” and “servicing agent” refer to the financial intermediary that employs your financial advisor. Selling and/or servicing agents include, for example, brokerage firms, banks, investment advisors, third party administrators and other financial intermediaries, including Ameriprise Financial and its affiliates.

Financial Intermediary Compensation

The Distributor and the Adviser make payments, from their own resources, to certain financial intermediaries, including other Ameriprise Financial affiliates, for marketing/sales support services relating to the Columbia Funds. Such payments are generally based upon one or more of the following factors: average net assets of the Columbia Funds sold by the Distributor attributable to that intermediary, gross sales of the Columbia Funds distributed by the Distributor attributable to that intermediary, reimbursement of ticket charges (fees that an intermediary firm charges its representatives for effecting transactions in Fund shares) or a negotiated lump sum payment. While the financial arrangements may vary for each intermediary, the support payments to any one intermediary are generally between 0.05% and 0.50% on an annual basis for payments based on average net assets of the Fund attributable to the intermediary, and between 0.05% and 0.25% on an annual basis for firms receiving a payment based on gross sales of the Columbia Funds attributable to the intermediary.

These payments for shareholder servicing support vary by financial intermediary but generally are not expected, with certain limited exceptions, to exceed 0.40% of the average aggregate value of the Fund’s shares in any financial intermediary’s program on an annual basis for those classes of shares that pay a service fee pursuant to a plan under Rule 12b-1 under the 1940 Act, and 0.45% of the average aggregate value of the Fund’s shares in any financial intermediary’s program on an annual basis for those classes of shares that do not pay a service fee pursuant to a plan under Rule 12b-1 under the 1940 Act.

Amounts paid by the Distributor and the Adviser and their affiliates are paid out of the Distributor’s and the Adviser’s own resources and do not increase the amount paid by you or the Fund. You can find further details about the payments made by the Distributor and the Adviser and their affiliates and the services provided by financial intermediaries as well as a list of the intermediaries to which the Distributor and the Adviser have agreed to make marketing support payments in the SAI. Your financial intermediary may charge you fees and commissions in addition to those described in this prospectus. You should consult with your financial intermediary and review carefully any disclosure your financial intermediary provides regarding its services and compensation. Depending on the financial arrangement in place at any particular time, a financial intermediary and its financial consultants may have a financial incentive for recommending the Fund or a particular share class over others. See Management of the Fund – Other Roles and Relationships of Ameriprise Financial and its Affiliates – Certain Conflicts of Interest for more information.

Buying, Selling and Exchanging Shares

Share Price Determination

FUNDamentals ^TM

NAV Calculation

Each of the Fund’s share classes calculates its NAV as follows:


		(Value of assets of the share class)
NAV	=	—(Liabilities of the share class)
		Number of outstanding shares of the class

Transaction Rules and Policies

Also remember that the Fund may refuse any order to buy or exchange shares. If this happens, we’ll return any money we’ve received, but no interest will be paid on that money.

Order Processing

FUNDamentals ^TM

Business Days

A business day is any day that the New York Stock Exchange (NYSE) is open. A business day ends at the close of regular trading on the NYSE, usually at 4:00 p.m. Eastern time. If the NYSE closes early, the business day ends as of the time the NYSE closes. On holidays and other days when the NYSE is closed, the Fund’s net asset value is not calculated and the Fund does not accept buy or sell orders. However, the value of the Fund’s assets may still be affected on such days to the extent that the Fund holds foreign securities that trade on days that foreign securities markets are open.

“Good Form”

An order is in “good form” if the Transfer Agent or your selling and/or servicing agent has all of the information and documentation it deems necessary to effect your order. For example, when you sell shares by letter of instruction, “good form” means that your letter has (i) complete instructions and the signatures of all account owners, (ii) a Medallion signature guarantee for amounts equal to or greater than $100,000 and (iii) any other required documents completed and attached. For the documents required for sales by corporations, agents, fiduciaries, surviving joint owners and other legal entities, call 800.345.6611.

Medallion Signature Guarantees

Written Transactions

Telephone Transactions

Telephone orders may not be as secure as written orders. Columbia Funds will take reasonable steps to confirm that telephone instructions are genuine. For example, we require proof of your identification before we will act on instructions received by telephone and may record telephone conversations. However, the Fund and its agents will not be responsible for any losses, costs or expenses resulting from an unauthorized telephone instruction when reasonable steps have been taken to confirm that telephone instructions are

genuine. Telephone orders may be difficult to complete during periods of significant economic or market change or business interruption.

Online Transactions

Once you have an account, contact Columbia Funds at 800.345.6611 for more information on account trading restrictions and the special sign-up procedures required for online transactions. The Transfer Agent has procedures in place to authenticate electronic orders you deliver through the internet. You will be required to accept the terms of an online agreement and to establish and utilize a password in order to access online account services.

You can sell up to an aggregate of $100,000 of shares through the internet in any 30-day period if you qualify for internet orders.

Customer Identification Program

Small Account Policy—Accounts Below $250

Small Account Policy—Minimum Balance Fee

Exceptions to the Above Small Account Policy (Accounts Below $250 and Minimum Balance Fee)

Small Account Policy—Broker/Dealer and Wrap Fee Accounts

Columbia Funds may automatically redeem shares at any time from broker/dealer networked accounts and wrap fee accounts that have account balances of $20 or less or that have less than one share.

Cash Flows

Information Sharing Agreements

As required by Rule 22c-2 under the 1940 Act, the Columbia Funds or certain of their service providers will enter into information sharing agreements with financial intermediaries, including participating life insurance companies and financial intermediaries that sponsor or offer retirement plans through which shares of the Columbia Funds are made available for purchase. Pursuant to Rule 22c-2, financial intermediaries are required, upon request, to: (i) provide shareholder account and transaction information and (ii) execute instructions from the Fund to restrict or prohibit further purchases of Fund shares by shareholders who have been identified by the Fund as having engaged in transactions that violate the Fund’s excessive trading policies and procedures. See Buying, Selling and Exchanging Shares – Excessive Trading Practices for more information.

Excessive Trading Practices

Some financial intermediaries apply their own restrictions or policies to underlying investor accounts, which may be more or less restrictive than those described here. This may impact the Fund’s ability to curtail excessive trading, even where it is identified. For these and other reasons, it is possible that excessive trading may occur despite the Fund’s efforts to detect and prevent it.

Risks of Excessive Trading – Excessive trading creates certain risks to the Fund’s long-term shareholders and may create the following adverse effects:

•

negative impact on the Fund’s performance;

•

potential dilution of the value of the Fund’s shares;

•

losses on the sale of investments resulting from the need to sell securities at less favorable prices;

•

increased taxable gains to the Fund’s remaining shareholders resulting from the need to sell securities to meet sell orders; and

•

increased brokerage and administrative costs.

Opening an Account and Placing Orders

Columbia Funds encourages you to consult with a financial advisor who can help you with your investment decisions and who can help you open an account. Once you have an account, you can buy, sell and exchange shares by contacting your financial advisor who will send your order to the Transfer Agent or your selling and/or servicing agent. As described in Buying, Selling and Exchanging Shares – Transaction Rules and Policies , once you have an account you can also communicate your orders directly to the Transfer Agent by mail, by telephone or online.

Buying Shares

Minimum Initial Investments

There is no minimum initial investment in Class Z shares for the following categories of eligible investors:

•

The minimum initial investment in Class Z shares for the following categories of eligible investors is $1,000 :

•

The minimum initial investment in Class Z shares for the following categories of eligible investors is $2,500:

•

Any investor buying shares through a Columbia Management state tuition plan organized under Section 529 of the Internal Revenue Code.

•

Any trustee or director (or family member of a trustee or director) of a fund distributed by the Distributor.

•

Any employee (or family member of an employee) of Bank of America or one of its subsidiaries.

•

Any institutional investor who is a corporation, partnership, trust, foundation, endowment, institution, government

entity, or similar organization, which meets the respective qualifications for an accredited investor, as defined under the Securities Act of 1933.

•

For investors establishing a Systematic Investment Plan, the minimum initial investment is $50.

Minimum Additional Investments

There is no minimum additional investment for Class Z shares.

Systematic Investment Plan

Dividend Diversification

Wire Purchases

You may buy Class Z shares of the Fund by wiring money from your bank account to your Fund account by calling the Transfer Agent at 800.422.3737.

Electronic Funds Transfer

Other Purchase Rules You Should Know

•

Once the Transfer Agent or your selling and/or servicing agent receives your buy order in “good form,” your purchase will be made at the next calculated net asset value per share.

•

You generally buy Class Z shares at net asset value because no front-end sales charge applies to purchases of this share class.

•

Selling and/or servicing agents are responsible for sending your buy orders to the Transfer Agent and ensuring that we receive your money on time.

•

Shares bought are recorded on the books of the Fund. The Fund doesn’t issue certificates.

Selling Shares

When you sell your shares, the Fund is effectively buying them back from you. This is called a redemption.

Wire Redemptions

Electronic Funds Transfer

Systematic Withdrawal Plan

In-Kind Distributions

Other Redemption Rules You Should Know

•

Once the Transfer Agent or your selling and/or servicing agent receives your sell order in “good form,” your shares will be sold at the next calculated net asset value per share.

•

No interest will be paid on uncashed redemption checks.

•

Other restrictions may apply to retirement accounts. For information about these restrictions, contact your retirement plan administrator.

•

Also keep in mind Columbia Funds’ Small Account Policy, which is described above in Buying, Selling and Exchanging Shares – Transaction Rules and Policies .

Exchanging Shares

Systematic Exchanges

The rules described below for making exchanges apply to systematic exchanges.

Other Exchange Rules You Should Know

•

Exchanges are made at net asset value.

•

You can generally make exchanges between like share classes of any Columbia Fund. Some exceptions apply.

•

The rules for buying shares of a Columbia Fund generally apply to exchanges into that Fund.

•

You may make exchanges only into a Columbia Fund that is legally offered and sold in your state of residence.

•

You generally may make an exchange only into a Columbia Fund that is accepting investments.

•

The Fund may change or cancel your right to make an exchange by giving the amount of notice required by regulatory authorities (generally 60 days for a material change or cancellation).

•

Unless your account is part of a tax-advantaged arrangement, an exchange for shares of another fund is a taxable event, and you may recognize a gain or loss for tax purposes.

Distributions and Taxes

Distributions to Shareholders

A mutual fund can make money two ways:

•

It can earn income on its investments. Examples of fund income are interest paid on money market instruments and bonds, and dividends paid on common stocks.

•

FUNDamentals ^TM

Distributions

Declaration and Distribution Schedule


Declarations		daily
Distributions		monthly

The Fund may, however, pay distributions of net investment income more frequently.

If you buy shares of the Fund when it holds securities with unrealized capital gain, you may, in effect, receive part of your purchase price back if and when the Fund sells those

Taxes and Your Investment

•

To the extent distributions are taxable, such distributions generally are taxable to you when paid, whether they are paid in cash or automatically reinvested in additional shares of the Fund.

•

backup withholding.

FUNDamentals ^TM

Taxes

Financial Highlights

Columbia Short Term Municipal Bond Fund—Class Z Shares


	Year Ended March 31, 2010			Year Ended March 31, 2009			Year Ended March 31, 2008			Year Ended March 31, 2007			Year Ended March 31, 2006 ^(a)
Net Asset Value, Beginning of Period	$	[	]	$	10.32		$	10.17		$	10.14		$	10.21
Income from Investment Operations:
Net investment income ^(b)		[	]		0.30			0.34			0.32			0.25
Net realized and unrealized gain (loss) on investments		[	]		0.15			0.15			0.04			(0.04	)
Total from investment operations		[	]		0.45			0.49			0.36			0.21
Less Distributions to Shareholders:
From net investment income		[	]		(0.31	)		(0.34	)		(0.33	)		(0.28	)
Net Asset Value, End of Period	$	[	]	$	10.46		$	10.32		$	10.17		$	10.14
Total return ^(c)(d)		[	]%		4.41	%		4.92	%		3.56	%		2.05	%
Ratios to Average Net Assets/Supplemental Data:
Net expenses before interest expense		[	]%		0.40	% ^(e)		0.40	% ^(e)		0.40	% ^(e)		0.40	% ^(e)
Interest expense ^(f)		[	]%		—	%		—	%		—	%		—	%
Net expenses		[	]%		0.40	% ^(e)		0.40	% ^(e)		0.40	% ^(e)		0.40	% ^(e)
Waiver/Reimbursement		[	]%		0.07	%		0.11	%		0.11	%		0.08	%
Net investment income		[	]%		2.94	% ^(e)		3.34	% ^(e)		3.20	% ^(e)		2.72	% ^(e)
Portfolio turnover rate		[	]%		94	%		73	%		98	%		13	%
Net assets, end of period (000’s)	$	[	]	$	1,044,788		$	519,786		$	380,532		$	529,770

^(a)	On August 22, 2005, the Fund’s Primary A shares were renamed Class Z shares.

^(b)	Per share data was calculated using the average shares outstanding during the period.

^(c)	Total return at net asset value assuming all distributions reinvested.

^(d)	Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

^(e)	The benefits derived from expense reductions had an impact of less than 0.01%.

^(f)	Rounds to less than 0.01%.

Hypothetical Fees and Expenses

The following supplemental hypothetical investment information provides additional information about the effect of the fees and expenses of the Fund, including investment advisory fees and other Fund costs, on the Fund’s returns over a 10-year period. The chart shows the estimated fees and expenses that would be charged on a hypothetical investment of $10,000 in Class Z shares of the Fund, assuming a 5% return each year, the cumulative return after fees and expenses and the hypothetical year-end balance after fees and expenses. The chart also assumes that all dividends and distributions are reinvested. The annual expense ratio used for the share class, which is the same as that stated in the Annual Fund Operating Expenses table, is presented in the chart and is net of any contractual fee waivers or expense reimbursements for the period of contractual commitment. Your actual costs may be higher or lower.

Columbia Short Term Municipal Bond Fund—Class Z Shares

Maximum Initial Sales Charge 0.00%

Initial Hypothetical Investment Amount
$10,000.00

Assumed Rate of Return 5%

Year

Cumulative Return
Before Fees and
Expenses

Annual Expense
Ratio

Cumulative Return
After Fees and
Expenses

Hypothetical Year-
End Balance After
Fees and Expenses

Annual Fees and
Expenses ^(a)

5.00

[

]

[

]

10.25

[

]

[

]

15.76

[

]

[

]

21.55

[

]

[

]

27.63

[

]

[

]

34.01

[

]

[

]

40.71

[

]

[

]

47.75

[

]

[

]

55.13

[

]

[

]

62.89

[

]

[

]

Total Gain After Fees and Expenses

[

]

Total Annual Fees and Expenses Paid

[

]

^(a)	Annual Fees and Expenses are calculated based on the average between the beginning and ending balance for each year. All information is calculated on an annual compounding basis.

LOGO

Columbia Short Term Municipal Bond Fund

Class Z Shares

Prospectus, August 1, 2010

For More Information


By Mail:		Columbia Funds c/o Columbia Management Investment Services Corp. P.O. Box 8081 Boston, MA 02266-8081

By Telephone:		800.345.6611

Online:		www.columbiafunds.com

Annual and Semi-Annual Reports to Shareholders

Shareholder Communications with the Board

Statement of Additional Information

The SAI provides more detailed information about the Fund and its policies. The SAI is legally part of this prospectus (incorporated by reference). A copy has been filed with the SEC.

Information Provided by the SEC

FUNDamentals™ is a trademark of Ameriprise Financial.

The investment company registration number of Columbia Funds Series Trust, of which the Fund is a series, is 811-09645.

One Financial Center, Boston, MA 02111-2621

800.345.6611 www.columbiafunds.com

INT-36/[ ]-0810

LOGO

Prospectus

August 1, 2010

Columbia Funds

Columbia High Income Fund


Ticker symbols
Class A Shares NAHAX
Class B Shares NHYBX
Class C Shares NYICX

Table of Contents



Columbia High Income Fund		3

Investment Objective		3

Fees and Expenses of the Fund		3

Principal Investment Strategies		5

Principal Risks		5

Performance Information		7

Investment Adviser and Portfolio Manager(s)		8

Purchase and Sale of Fund Shares		8

Tax Information		8

Payments to Broker-Dealers and Other Financial Intermediaries		8

Additional Investment Strategies and Policies		9

Management of the Fund		11

Primary Service Providers		11

Other Roles and Relationships of Ameriprise Financial and its Affiliates—Certain Conflicts of Interest		13

Certain Legal Matters		14

Choosing a Share Class		15

Comparison of the Share Classes		15

Sales Charges and Commissions		16

Reductions/Waivers of Sales Charges		20

Distribution and Service Fees		22

Financial Intermediary Compensation		23

Buying, Selling and Exchanging Shares		24

Share Price Determination		24

Transaction Rules and Policies		25

Opening an Account and Placing Orders		29

Distributions and Taxes		33

Financial Highlights		36

Hypothetical Fees and Expenses		39

Icons Guide

Investment Objective

LOGO Fees and Expenses of the Fund

LOGO Principal Investment Strategies

LOGO Principal Risks

LOGO Performance Information

LOGO Other Roles and Relationships of Ameriprise Financial and its Affiliates - Certain Conflicts of Interest

Columbia High Income Fund

Investment Objective

The Fund seeks total return, consisting of a high level of income and capital appreciation.

Fees and Expenses of the Fund

This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $50,000 in Class A shares of eligible Columbia Funds. More information about these and other discounts is available from your financial advisor, in the Choosing a Share Class section beginning on page 15 of this prospectus and in the Purchase, Redemption and Pricing of Shares section of the Statement of Additional Information.

Shareholder Fees (fees paid directly from your investment)


	Class A Shares		Class B Shares		Class C Shares
Maximum sales charge (load) imposed on purchases, as a % of offering price	4.75	%	N/A		N/A
Maximum deferred sales charge (load) imposed on redemptions, as a % of the lower of the original purchase price or net asset value	1.00	% ^(a)	5.00	% ^(b)	1.00	% ^(c)

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)


	Class A Shares		Class B Shares		Class C Shares
Management fees	0.77	%	0.77	%	0.77	%
Distribution and/or service (Rule 12b-1) fees	0.25	%	1.00	%	1.00	%
Other expenses	[	]%	[	]%	[	]%
Total annual Fund operating expenses	[	]%	[	]%	[	]%

^(a)	This charge applies to investors who buy $1 million or more of Class A shares and redeem them within one year of purchase, with certain limited exceptions.

^(b)	This charge decreases over time.

^(c)	This charge applies to investors who buy Class C shares and redeem them within one year of purchase, with certain limited exceptions.

Example

The following example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds.

The example illustrates the hypothetical expenses that you would incur over the time periods indicated, and assumes that:

•

you invest $10,000 in Class A, Class B or Class C shares of the Fund for the periods indicated,

•

your investment has a 5% return each year, and

•

the Fund’s total annual operating expenses remain the same as shown in the table above.

Based on the assumptions listed above, your costs would be:

1 year

3 years

5 years

10 years

Class A Shares

[

]

[

]

[

]

[

]

Class B Shares

Assuming no redemption of shares

[

]

[

]

[

]

[

]

Assuming complete redemption of shares at the end of the period

[

]

[

]

[

]

[

]

Class C Shares

Assuming no redemption of shares

[

]

[

]

[

]

[

]

Assuming complete redemption of shares at the end of the period

[

]

[

]

[

]

[

]

Remember this is an example only. Your actual costs may be higher or lower.

Portfolio Turnover

Principal Investment Strategies

Under normal circumstances, the Fund invests at least 80% of its net assets in domestic and foreign corporate below investment grade debt securities. These securities generally will be, at the time of purchase, rated “BB” or below by Standard & Poor’s Corporation (S&P) or Fitch, rated “Ba” or below by Moody’s, or unrated but determined by Columbia Management Investment Advisers, LLC, the Fund’s investment adviser (the Adviser), to be of comparable quality. The Fund invests primarily in domestic corporate below investment grade securities (including private placements), U.S. dollar-denominated foreign corporate below investment grade securities (including private placements), zero-coupon bonds and U.S. Government obligations. The Fund may invest up to 20% of its net assets in equity securities that may include convertible securities. The Fund is not managed to a specific duration.

The Adviser has engaged an investment subadviser - MacKay Shields LLC (MacKay Shields) - which manages the Fund on a day-to-day basis, although the Adviser retains general investment management responsibility for the management of the Fund. MacKay Shields evaluates a security’s potential to generate income and price appreciation in identifying investment opportunities and constructing the Fund’s portfolio.

When selecting investments for the Fund, MacKay Shields:

•

focuses on individual security selection (“bottom-up” analysis).

•

uses fundamental credit analysis.

•

emphasizes current income while attempting to minimize risk to principal.

•

seeks to identify a catalyst for capital appreciation such as an operational or financial restructuring.

•

attempts to manage risk by diversifying the Fund’s investments across securities of many different issuers.

MacKay Shields may sell a security when its price reaches a target set by MacKay Shields; if MacKay Shields believes there is deterioration in the issuer’s financial circumstances, or that other investments are more attractive; or for other reasons.

Principal Risks

•

Credit Risk – Credit risk applies to most debt securities, but is generally not a factor for obligations backed by the “full faith and credit” of the U.S. Government. The Fund could

lose money if the issuer of a debt security is unable or perceived to be unable to pay interest or repay principal when it becomes due. Various factors could affect the issuer’s actual or perceived willingness or ability to make timely interest or principal payments, including changes in the issuer’s financial condition or in general economic conditions. Debt securities backed by an issuer’s taxing authority may be subject to legal limits on the issuer’s power to increase taxes or otherwise to raise revenue, or may be dependent on legislative appropriation or government aid. Certain debt securities are backed only by revenues derived from a particular project or source, rather than by an issuer’s taxing authority, and thus may have a greater risk of default.

•

Interest Rate Risk – Debt securities are subject to interest rate risk. In general, if prevailing interest rates rise, the values of debt securities will tend to fall, and if interest rates fall, the values of debt securities will tend to rise. Changes in the value of a debt security usually will not affect the amount of income the Fund receives from it but may affect the value of the Fund’s shares. Interest rate risk is generally greater for debt securities with longer maturities/durations.

•

Foreign Securities Risk – Foreign securities are subject to special risks as compared to securities of U.S. issuers. For example, foreign markets can be extremely volatile. Fluctuations in currency exchange rates may impact the value of foreign securities denominated in foreign currencies, or in U.S. dollars, without a change in the intrinsic value of those securities. Foreign securities may be less liquid than domestic securities so that the Fund may, at times, be unable to sell foreign securities at desirable times or prices. Brokerage commissions, custodial fees and other fees are also generally higher for foreign securities. The Fund may have limited or no legal recourse in the event of default with respect to certain foreign securities, including those issued by foreign governments. In addition, foreign governments may impose potentially confiscatory withholding or other taxes, which could reduce the amount of income and capital gains available to distribute to shareholders. Other risks include possible delays in the settlement of transactions or in the payment of income; generally less publicly available information about companies; the impact of political, social or diplomatic events; possible seizure, expropriation or nationalization of a company or its assets; possible imposition of currency exchange controls; and accounting, auditing and financial reporting standards that may be less comprehensive and stringent than those applicable to domestic companies.

•

Zero-Coupon Bonds Risk – Zero-coupon bonds are bonds that do not pay interest in cash on a current basis, but instead accrue interest over the life of the bond. As a result, these securities are issued at a discount and their values may fluctuate more than the values of similar securities that pay interest periodically. Although these securities pay no interest to holders prior to maturity, interest accrued on these securities is reported as income to the Fund and distributed to its shareholders.

•

Convertible Securities Risk – Convertible securities are subject to the usual risks associated with debt securities, such as interest rate risk and credit risk. Convertible securities also react to changes in the value of the common stock into which they convert, and are thus subject to market risk. Because the value of a convertible security can be influenced by both interest rates and market movements, a convertible security generally is not as sensitive to interest rates as a similar debt security, and generally will not vary in value in response to other factors to the same extent as the underlying common stock. In the event of a liquidation of the issuing company, holders of convertible securities would typically be paid before the company’s common stockholders but after holders of any senior debt obligations of the company. The Fund may be forced to convert a convertible security before it otherwise would choose to do so, which may decrease the Fund’s return.

Performance Information

Year by Year Total Return (%) as of December 31 Each Year ^*

LOGO

*	Year-to-date return as of June 30, 2010: [ ]%

Best and Worst Quarterly Returns During this Period


Best:	[ ] quarter [ ]:	[ ]%
Worst:	[ ] quarter [ ]:	[ ]%

Average Annual Total Return as of December 31, 2009

The table compares the Fund’s returns for each period with those of the Credit Suisse High Yield Index, which is a broad-based index that tracks the performance of high-yield bonds.


	1 year		5 years		Life of Fund
Class A shares returns before taxes (February 14, 2000 inception)	[	]%	[	]%	[	]%
Class A shares returns after taxes on distributions	[	]%	[	]%	[	]%
Class A shares returns after taxes on distributions and sale of Fund shares	[	]%	[	]%	[	]%
Class B shares returns before taxes (February 17, 2000 inception)	[	]%	[	]%	[	]%
Class C shares returns before taxes (March 8, 2000 inception)	[	]%	[	]%	[	]%
Credit Suisse High Yield Index (reflects no deductions for fees, expenses or taxes; returns shown from January 31, 2000)	[	]%	[	]%	[	]%

Investment Adviser and Portfolio Manager(s)

Investment Adviser

Columbia Management Investment Advisers, LLC

Investment Subadviser

MacKay Shields LLC

Portfolio Manager

J. Matthew Philo, CFA

Manager. Service with the Fund since inception.

Purchase and Sale of Fund Shares

Tax Information

Payments to Broker-Dealers and Other Financial Intermediaries

Additional Investment Strategies and Policies

Changing the Fund’s Investment Objective and Policies

Investment Guidelines

Holding Other Kinds of Investments

Investing in Money Market Funds

Lending Securities

Portfolio Holdings Disclosure

The Fund’s complete portfolio holdings as of a fiscal quarter-end are disclosed approximately 30 calendar days after such quarter-end and the Fund’s largest 10 holdings as a percent of the Fund’s portfolio as of a month-end are disclosed approximately 15 calendar days after such month-end.

In addition, more current information concerning the Fund’s portfolio holdings as of specified dates also may be disclosed on the Columbia Funds’ website.

Investing Defensively

Mailings to Households

Additional Information on Portfolio Turnover

A mutual fund that replaces, or turns over, more than 100% of its investments in a year is considered to have a high portfolio turnover rate. A high portfolio turnover rate can generate larger distributions of short-term capital gains to shareholders, which for individuals are generally taxable at higher rates than long-term capital gains for U.S. federal income tax purposes. A high portfolio turnover rate can also mean higher brokerage and other transaction costs, which could reduce a fund’s returns. In general, the greater the volume of buying and selling by a fund, the greater the impact that brokerage commissions will have on its returns. The Fund generally buys securities for capital appreciation, investment income or both. However, the Fund may sell securities regardless of how long they’ve been held. You’ll find the Fund’s portfolio turnover rate for its most recent fiscal year in the Fees and Expenses of the Fund — Portfolio Turnover section of this prospectus and portfolio turnover rates for prior fiscal years in the Financial Highlights section of this prospectus.

Management of the Fund

Primary Service Providers

The Adviser

Subadviser(s)

The Adviser has engaged an investment subadviser to make the day-to-day investment decisions for the Fund. The Adviser retains ultimate responsibility (subject to Board oversight) for overseeing any subadviser it engages and for evaluating the Fund’s needs and the subadviser’s skills and abilities on an ongoing basis. Based on its evaluations, the Adviser may at times recommend to the Board that the Fund change, add or terminate one or more subadvisers; continue to retain a subadviser even though the subadviser’s ownership or corporate structure has changed; or materially change a subadvisory agreement with a subadviser.

The SEC has issued an order that permits the Adviser, subject to the approval of the Board, to appoint an unaffiliated subadviser or to change the terms of a subadvisory agreement for the Fund without first obtaining shareholder approval. The order permits the Fund to add or to change unaffiliated subadvisers or to change the fees paid to subadvisers from time to time without the expense and delays associated with obtaining shareholder approval of the change. The Adviser and its affiliates may have other relationships, including significant financial relationships, with current or potential subadvisers or their affiliates, which may create certain conflicts of interest. When making recommendations to the Board to appoint or to change a subadviser, or to change the terms of a subadvisory agreement, the Adviser discloses to the Board the nature of any material relationships it has with a subadviser or its affiliates.

A discussion regarding the basis for the Board’s approval of the investment subadvisory agreement with the Fund’s subadviser is available in the Fund’s annual report to shareholders for the fiscal year ended March 31, 2010.

MacKay Shields LLC

MacKay Shields is the Fund’s investment subadviser. Located at 9 West 57th Street, New York, New York 10019, MacKay Shields was organized in 1938 as an economic consulting firm. The firm is an independently wholly owned subsidiary of New York Life Insurance Company. MacKay Shields had approximately $[ ] billion in assets under management as of June 30, 2010.

MacKay Shields Portfolio Managers

MacKay Shields’ High Yield Portfolio Management Team is responsible for making the day-to-day decisions for the Fund. J. Matthew Philo is the lead portfolio manager responsible for making the day-to-day investment decisions for the Fund. Information about the lead portfolio manager is shown in the table below. The SAI provides more information about the portfolio manager’s compensation, other accounts managed by the portfolio manager and the portfolio manager’s ownership of securities in the Fund.

J. Matthew Philo, CFA

Service with the Fund since inception.

Mr. Philo is a Senior Managing Director and a Co-Head of Fixed Income and Head of High Yield Division. He joined MacKay Shields in 1996 from Thorsell, Parker Partners Inc. where he was an analyst and Portfolio Manager focusing on mid-cap companies. He was previously with Moran Asset Management as an equity portfolio manager and analyst. Mr. Philo became a holder of the Chartered Financial Analyst designation in 1993. He has been in the investment management and research industry since 1984.

The Administrator

Annual Administration Fee,

as a % of Average Daily Net Assets


Columbia High Income Fund		0.23	%

The Distributor

The Transfer Agent

The Transfer Agent is a registered transfer agent and a wholly-owned subsidiary of Ameriprise Financial. The Transfer Agent’s responsibilities include processing purchases, sales and exchanges, calculating and paying distributions, keeping shareholder records, preparing account statements and providing customer service. The Fund pays the Transfer Agent monthly fees on a per-account basis. Fees paid to the Transfer Agent include reimbursements for certain out-of-pocket expenses and sub-transfer agency fees, subject to certain limitations, paid by the Transfer Agent on the Fund’s behalf.

Expense Reimbursement Arrangements

The Adviser has voluntarily agreed to reimburse a portion of the Fund’s expenses so that the Fund’s ordinary operating expenses (excluding any distribution and service fees, brokerage commissions, interest, taxes and extraordinary expenses, but including custodian charges relating to overdrafts, if any), after giving effect to any balance credits from the Fund’s custodian, do not exceed 1.00% of the Fund’s average daily net assets on an annualized basis. The Adviser, in its discretion, may revise or discontinue this arrangement at any time.

Other Roles and Relationships of Ameriprise Financial and its Affiliates—Certain Conflicts of Interest

Conflicts of interest and limitations that could affect a Columbia Fund may arise from, for example, the following:

•

compensation and other benefits received by the Adviser and other Ameriprise Financial affiliates related to the management/administration of a Columbia Fund and the sale of its shares;

•

separate and potentially divergent management of a Columbia Fund and other funds and accounts advised/managed by the Adviser and other Ameriprise Financial affiliates;

•

regulatory and other investment restrictions on investment activities of the Adviser and other Ameriprise Financial affiliates and accounts advised/managed by them;

•

insurance and other relationships of Ameriprise Financial affiliates with companies and other entities in which a Columbia Fund invests; and

•

regulatory and other restrictions relating to the sharing of information between Ameriprise Financial and its affiliates, including the Adviser, and a Columbia Fund.

Certain Legal Matters

Ameriprise Financial and certain of its affiliates have historically been involved in a number of legal, arbitration and regulatory proceedings, including routine litigation, class actions and governmental actions, concerning matters arising in connection with the conduct of their business activities. Ameriprise Financial believes that the Fund is not currently the subject of, and that neither Ameriprise Financial nor any of its affiliates is the subject of, any pending legal, arbitration or regulatory proceedings that are likely to have a material adverse effect on the Fund or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Fund. Information regarding certain pending and settled legal proceedings may be found in the Fund’s shareholder reports and in the SAI. Additionally, Ameriprise Financial is required to make 10-Q, 10-K and, as necessary, 8-K filings with the SEC on legal and regulatory matters that relate to Ameriprise Financial and its affiliates. Copies of these filings may be obtained by accessing the SEC website at www.sec.gov.

Choosing a Share Class

Comparison of the Share Classes

Share Class Features


	Class A Shares	Class B Shares	Class C Shares
Eligible Investors and Minimum Initial Investments ^(a)	Minimum initial investments range from $0 to $2,500; the share class is available to the general public for investment.	The Fund no longer accepts investments from new or existing investors in Class B shares, except through a reinvestment of a dividend or capital gain distribution, or a permitted exchange as described in more detail under Buying, Selling and Exchanging Shares – Opening an Account and Placing Orders – Buying Shares – Class B Shares Closing.	Minimum initial investments range from $0 to $2,500; the share class is available to the general public for investment.

Investment Limits	none	up to $49,999 (based on aggregate account value) ^(b)	up to $999,999

Conversion Features	none	convert to Class A shares eight years after purchase	none

Front-End Sales Charges ^(c)	4.75% maximum, declining to 0.00% on investments of $1 million or more	none	none

Contingent Deferred Sales Charges (CDSCs) ^(c)	none, except a 1.00% CDSC applies to certain investments of between $1 million and $50 million sold within one year of purchase	5.00% maximum, gradually declining to 0.00% after six years	1.00% on investments sold within one year of purchase

Maximum Distribution and Service Fees	0.25% combined distribution and service fee	0.75% distribution fee 0.25% service fee	0.75% distribution fee 0.25% service fee

^(a)	See Buying, Selling and Exchanging Shares – Opening an Account and Placing Orders for more details on the eligible investors and investment minimums of these share classes.

^(b)

^(c)	See Choosing a Share Class – Reductions/Waivers of Sales Charges for information about certain exceptions to these sales charges.

FUNDamentals ^TM

Selling and/or Servicing Agents

The terms “selling agent” and “servicing agent” refer to the financial intermediary that employs your financial advisor. Selling and/or servicing agents include, for example, brokerage firms, banks, investment advisors, third party administrators and other financial intermediaries, including Ameriprise Financial and its affiliates.

Sales Charges and Commissions

Class A Shares—Front-End Sales Charge

FUNDamentals ^TM

Front-End Sales Charge Calculation

The following table presents the front-end sales charge as a percentage of both the offering price and the net amount invested.

•

The offering price per share is the net asset value per share plus any front-end sales charge that applies.

•

The net asset value (or NAV) per share is the price of a share calculated by the Fund every business day.

The dollar amount of the sales charge is the difference between the offering price of the shares you buy (based on the applicable sales charge in the table) and the net asset value of those shares.

The front-end sales charge you’ll pay on Class A shares:

•

depends on the amount you’re investing (generally, the larger the investment, the smaller the percentage sales charge), and

•

is based on the total amount of your purchase and the value of your account.

Class A Shares—Front-End Sales Charge—Breakpoint Schedule


Dollar amount of shares bought ^(a)	Sales charge as a % of the offering price ^(b)		Sales charge as a % of the net amount invested ^(b)		Amount retained by or paid to selling and/or servicing agents as a % of the offering price
$0 – $49,999	4.75	%	4.99	%	4.25	%
$50,000 – $99,999	4.50	%	4.71	%	4.00	%
$100,000 – $249,999	3.50	%	3.63	%	3.00	%
$250,000 – $499,999	2.50	%	2.56	%	2.25	%
$500,000 – $999,999	2.00	%	2.04	%	1.75	%
$1,000,000 or more	0.00	%	0.00	%	1.00	% ^(c)(d)

^(a)	Purchase amounts and account values are aggregated among all eligible Columbia Fund accounts for the purposes of this table.

^(b)

^(c)

^(d)	For certain group retirement plans, selling and/or servicing agents are eligible to receive a 1.00% commission from the Distributor on all purchases up to $3 million, including those in amounts of less than $1 million that are coded as commission-eligible trades.

Class A Shares—CDSC and Commissions

In some cases, you’ll pay a CDSC if you sell Class A shares that you bought without an initial sales charge.

•

The CDSC on Class A shares:

•

is applied to the net asset value at the time of your purchase or sale, whichever is lower, and

•

will not be applied to any shares you receive through reinvested distributions.

The Distributor may pay your selling and/or servicing agent an up-front commission of up to 4.25% of the offering price per share when you buy Class A shares. The Distributor funds the commission through the applicable sales charge.

The Distributor may also pay your selling and/or servicing agent a cumulative commission when you buy $1 million or more of Class A shares, according to the following schedule:

Class A Shares—Commission Schedule


Purchase Amount	Commission Level (as a % of net asset value per share)
$1 million – $2,999,999	1.00	%
$3 million – $49,999,999	0.50	%
$50 million or more	0.25	%

FUNDamentals ^TM

Contingent Deferred Sales Charge

Class B and Class C Shares—Sales Charges

You don’t pay a front-end sales charge when you buy Class B or Class C shares, but you may pay a CDSC when you sell Class B or Class C shares.

The CDSC on Class B and Class C shares:

•

is applied to the net asset value at the time of your purchase or sale, whichever is lower,

•

will not be applied to any shares you receive through reinvested distributions, and

•

generally declines each year until there is no sales charge for selling shares.

Class B Shares—CDSC and Commissions

Class B Shares—CDSC Schedule


Number of Years Class B Shares Held		Applicable CDSC
One		5.00%
Two		4.00%
Three		3.00%
Four		3.00%
Five		2.00%
Six		1.00%
Seven		none
Eight		none
Nine		Conversion to Class A Shares

If you are an investor who purchased Class B shares prior to their closing (except for certain limited transactions), the Distributor paid an up-front commission directly to your selling and/or servicing agent of up to 4.00% of the net asset value per share when you bought the Class B shares. The Distributor continues to seek to recover this commission through distribution fees it receives under the Fund’s distribution plan and any applicable CDSC paid when you sell your shares. See Choosing a Share Class – Distribution and Service Fees for details.

The following rules apply to the conversion of Class B shares to Class A shares:

•

Class B shares are converted on or about the 15th day of the month that they become eligible for conversion.

•

Any shares you received from reinvested distributions on these shares generally will convert to Class A shares at the same time.

•

No sales charge or other charges apply, and conversions are free from U.S. federal income tax.

Class C Shares—CDSC and Commissions

Reductions/Waivers of Sales Charges

Front-End Sales Charge Reductions

FUNDamentals ^TM

Your “Immediate Family” and Account Value Aggregation

Eligible Accounts

The types of accounts that are eligible for the account value aggregation purposes described above are:

•

individual accounts,

•

joint accounts,

•

certain IRA accounts,

•

certain health savings accounts,

•

certain trust accounts, and

•

Uniform Gifts to Minors Act (UGMA)/Uniform Transfers to Minors Act (UTMA) accounts.

Eligible accounts do not include Class R share accounts or accounts holding shares of money market funds that used the Columbia brand before May 1, 2010.

Front-End Sales Charge Waivers

CDSC Waivers

The Fund may change or cancel these terms at any time. Any change or cancellation applies only to future purchases.

For more information about the sales charge reductions and waivers described here, consult the SAI.

Distribution and Service Fees

The table below shows the maximum annual distribution and service fees (as an annual % of average daily net assets) and the combined amount of such fees applicable to each share class:

Distribution and Service (Rule 12b-1) Fees


	Distribution Fee		Service Fee		Combined Total
Class A	—	^(a)	—	^(a)	0.25	% ^(a)
Class B	0.75	%	0.25	%	1.00	%
Class C	0.75	%	0.25	%	1.00	%

^(a)	The Fund’s Class A shares pay a combined distribution and service fee pursuant to the Fund’s combined distribution and shareholder servicing plan for Class A shares.

Financial Intermediary Compensation

The Distributor and the Adviser make payments, from their own resources, to certain financial intermediaries, including other Ameriprise Financial affiliates, for marketing/sales support services relating to the Columbia Funds. Such payments are generally based upon one or more of the following factors: average net assets of the Columbia Funds sold by the Distributor attributable to that intermediary, gross sales of the Columbia Funds distributed by the Distributor attributable to that intermediary, reimbursement of ticket charges (fees that an intermediary firm charges its representatives for effecting transactions in Fund shares) or a negotiated lump sum payment. While the financial arrangements may vary for each intermediary, the support payments to any one intermediary are generally between 0.05% and 0.50% on an annual basis for payments based on average net assets of the Fund attributable to the intermediary, and between 0.05% and 0.25% on an annual basis for firms receiving a payment based on gross sales of the Columbia Funds attributable to the intermediary.

These payments for shareholder servicing support vary by financial intermediary but generally are not expected, with certain limited exceptions, to exceed 0.40% of the average aggregate value of the Fund’s shares in any financial intermediary’s program on an annual basis for those classes of shares that pay a service fee pursuant to a plan under Rule 12b-1 under the 1940 Act, and 0.45% of the average aggregate value of the Fund’s shares in any financial intermediary’s program on an annual basis for those classes of shares that do not pay a service fee pursuant to a plan under Rule 12b-1 under the 1940 Act.

Amounts paid by the Distributor and the Adviser and their affiliates are paid out of the Distributor’s and the Adviser’s own resources and do not increase the amount paid by you or the Fund. You can find further details about the payments made by the Distributor and the Adviser and their affiliates and the services provided by financial intermediaries as well as a list of the intermediaries to which the Distributor and the Adviser have agreed to make marketing support payments in the SAI. Your financial intermediary may charge you fees and commissions in addition to those described in this prospectus. You should consult with your financial intermediary and review carefully any disclosure your financial intermediary provides regarding its services and compensation. Depending on the financial arrangement in place at any particular time, a financial intermediary and its financial consultants may have a financial incentive for recommending the Fund or a particular share class over others. See Management of the Fund – Other Roles and Relationships of Ameriprise Financial and its Affiliates – Certain Conflicts of Interest for more information.

Buying, Selling and Exchanging Shares

Share Price Determination

FUNDamentals ^TM

NAV Calculation

Each of the Fund’s share classes calculates its NAV as follows:


		(Value of assets of the share class)
NAV =		—(Liabilities of the share class)
		Number of outstanding shares of the class

Transaction Rules and Policies

Also remember that the Fund may refuse any order to buy or exchange shares. If this happens, we’ll return any money we’ve received, but no interest will be paid on that money.

Order Processing

FUNDamentals ^TM

Business Days

A business day is any day that the New York Stock Exchange (NYSE) is open. A business day ends at the close of regular trading on the NYSE, usually at 4:00 p.m. Eastern time. If the NYSE closes early, the business day ends as of the time the NYSE closes. On holidays and other days when the NYSE is closed, the Fund’s net asset value is not calculated and the Fund does not accept buy or sell orders. However, the value of the Fund’s assets may still be affected on such days to the extent that the Fund holds foreign securities that trade on days that foreign securities markets are open.

“Good Form”

An order is in “good form” if the Transfer Agent or your selling and/or servicing agent has all of the information and documentation it deems necessary to effect your order. For example, when you sell shares by letter of instruction, “good form” means that your letter has (i) complete instructions and the signatures of all account owners, (ii) a Medallion signature guarantee for amounts equal to or greater than $100,000 and (iii) any other required documents completed and attached. For the documents required for sales by corporations, agents, fiduciaries, surviving joint owners and other legal entities, call 800.345.6611.

Medallion Signature Guarantees

Written Transactions

Telephone Transactions

Telephone orders may not be as secure as written orders. Columbia Funds will take reasonable steps to confirm that telephone instructions are

genuine. For example, we require proof of your identification before we will act on instructions received by telephone and may record telephone conversations. However, the Fund and its agents will not be responsible for any losses, costs or expenses resulting from an unauthorized telephone instruction when reasonable steps have been taken to confirm that telephone instructions are genuine. Telephone orders may be difficult to complete during periods of significant economic or market change or business interruption.

Online Transactions

Once you have an account, contact Columbia Funds at 800.345.6611 for more information on account trading restrictions and the special sign-up procedures required for online transactions. The Transfer Agent has procedures in place to authenticate electronic orders you deliver through the internet. You will be required to accept the terms of an online agreement and to establish and utilize a password in order to access online account services.

You can sell up to an aggregate of $100,000 of shares through the internet in any 30-day period if you qualify for internet orders.

Customer Identification Program

Small Account Policy—Accounts Below $250

Small Account Policy—Minimum Balance Fee

Exceptions to the Above Small Account Policy (Accounts Below $250 and Minimum Balance Fee)

Small Account Policy—Broker/Dealer and Wrap Fee Accounts

Columbia Funds may automatically redeem shares at any time from broker/dealer networked accounts and wrap fee accounts that have account balances of $20 or less or that have less than one share.

Cash Flows

Information Sharing Agreements

As required by Rule 22c-2 under the 1940 Act, the Columbia Funds or certain of their service providers will enter into information sharing agreements with financial intermediaries, including participating life insurance companies and financial intermediaries that sponsor or offer retirement plans through which shares of the Columbia Funds are made available for purchase. Pursuant to Rule 22c-2, financial intermediaries are required, upon request, to: (i) provide shareholder account and transaction information and (ii) execute instructions from the Fund to restrict or prohibit further purchases of Fund shares by shareholders who have been identified by the Fund as having engaged in transactions that violate the Fund’s excessive trading policies and procedures. See Buying, Selling and Exchanging Shares – Excessive Trading Practices for more information.

Excessive Trading Practices

Some financial intermediaries apply their own restrictions or policies to underlying investor accounts, which may be more or less restrictive than those described here. This may impact the Fund’s ability to curtail excessive trading, even where it is identified. For these and other reasons, it is possible that excessive trading may occur despite the Fund’s efforts to detect and prevent it.

Risks of Excessive Trading – Excessive trading creates certain risks to the Fund’s long-term shareholders and may create the following adverse effects:

•

negative impact on the Fund’s performance;

•

potential dilution of the value of the Fund’s shares;

•

losses on the sale of investments resulting from the need to sell securities at less favorable prices;

•

increased taxable gains to the Fund’s remaining shareholders resulting from the need to sell securities to meet sell orders; and

•

increased brokerage and administrative costs.

Opening an Account and Placing Orders

Columbia Funds encourages you to consult with a financial advisor who can help you with your investment decisions and who can help you open an account. Once you have an account, you can buy, sell and exchange shares by contacting your financial advisor who will send your order to the Transfer Agent or your selling and/or servicing agent. As described in Buying, Selling and Exchanging Shares – Transaction Rules and Policies , once you have an account you can also communicate your orders directly to the Transfer Agent by mail, by telephone or online.

Buying Shares

Eligible Investors

Class B Shares Closing

Additional Class B shares will be issued only to existing investors in Class B shares and only through the following two types of transactions (Qualifying Transactions):

•

Dividends and/or capital gain distributions may continue to be reinvested in Class B shares of the Fund.

•

Shareholders invested in Class B shares of the Fund may exchange those shares for Class B shares of other Columbia Funds offering such shares.

Any initial purchase orders for the Fund’s Class B shares will be rejected (other than through a Qualifying Transaction that is an exchange transaction).

Minimum Initial Investments

Minimum Additional Investments

There is no minimum additional investment for Class A or Class C shares.

Systematic Investment Plan

Dividend Diversification

Wire Purchases

You may buy Class A or Class C shares of the Fund by wiring money from your bank account to your Fund account by calling the Transfer Agent at 800.422.3737.

Electronic Funds Transfer

Other Purchase Rules You Should Know

•

You generally buy Class A shares at the public offering price per share because purchases of Class A shares are generally subject to a front-end sales charge.

•

You buy Class B and Class C shares at net asset value per share because no front-end sales charge applies to purchases of these share classes.

•

Selling and/or servicing agents are responsible for sending your buy orders to the Transfer Agent and ensuring that we receive your money on time.

•

Shares bought are recorded on the books of the Fund. The Fund doesn’t issue certificates.

Selling Shares

When you sell your shares, the Fund is effectively buying them back from you. This is called a redemption.

Wire Redemptions

Electronic Funds Transfer

Systematic Withdrawal Plan

guaranteed.

In-Kind Distributions

Other Redemption Rules You Should Know

•

No interest will be paid on uncashed redemption checks.

•

Other restrictions may apply to retirement accounts. For information about these restrictions, contact your retirement plan administrator.

•

Also keep in mind Columbia Funds’ Small Account Policy, which is described above in Buying, Selling and Exchanging Shares – Transaction Rules and Policies .

Exchanging Shares

Systematic Exchanges

The rules described below for making exchanges apply to systematic exchanges.

Other Exchange Rules You Should Know

•

Exchanges are made at net asset value.

•

You can generally make exchanges between like share classes of any Columbia Fund. Some exceptions apply.

•

A sales charge may apply when you exchange shares of a Columbia Fund that were not assessed a sales charge at the time of your initial purchase.

•

The rules for buying shares of a Columbia Fund generally apply to exchanges into that Fund.

•

You may make exchanges only into a Columbia Fund that is legally offered and sold in your state of residence.

•

You generally may make an exchange only into a Columbia Fund that is accepting investments.

•

The Fund may change or cancel your right to make an exchange by giving the amount of notice required by regulatory authorities (generally 60 days for a material change or cancellation).

•

Unless your account is part of a tax-advantaged arrangement, an exchange for shares of another fund is a taxable event, and you may recognize a gain or loss for tax purposes.

Same-Fund Exchange Privilege for Class Z Shares

Distributions and Taxes

Distributions to Shareholders

A mutual fund can make money two ways:

•

It can earn income on its investments. Examples of fund income are interest paid on money market instruments and bonds, and dividends paid on common stocks.

•

FUNDamentals ^TM

Distributions

Declaration and Distribution Schedule


Declarations		monthly
Distributions		monthly

The Fund may, however, declare and pay distributions of net investment income more frequently.

The Fund generally pays cash distributions within five business days after the distribution was declared. If you sell all of your shares after the record date, but before the payment date, for a distribution, you’ll normally receive that distribution in cash within five business days after the sale was made.

Unless you are a tax-exempt investor or holding Fund shares through a tax-advantaged account (such as a 401(k) plan or IRA), you should consider avoiding buying Fund shares shortly before the Fund makes a distribution of net investment income or net realized capital gain, because doing so can cost you money in taxes. This is because you will, in effect, receive part of your purchase price back in the distribution. This is known as “buying a dividend.” To avoid “buying a dividend,” check the Fund’s distribution schedule online at www.columbiafunds.com, or by calling us at 800.345.6611, before you invest.

Taxes and Your Investment

The Fund will send you a statement each year showing how much you’ve received in distributions in the prior year and the distributions’ character for federal income tax purposes. The Fund expects that distributions will consist primarily of ordinary income. In addition, you should be aware of the following:

•

Distributions generally are taxable to you when paid, whether they are paid in cash or automatically reinvested in additional shares of the Fund.

•

FUNDamentals ^TM

Taxes

Financial Highlights

Columbia High Income Fund—Class A Shares ^(a)


	Year Ended March 31, 2010			Year Ended March 31, 2009			Year Ended March 31, 2008 ^(b)			Year Ended March 31, 2007			Year Ended March 31, 2006 ^(c)
Net Asset Value, Beginning of Period	$	[	]	$	8.03		$	9.11		$	8.91		$	9.31
Income from Investment Operations:
Net investment income ^(d)		[	]		0.57			0.64			0.62			0.63
Net realized and unrealized gain (loss) on investments and foreign currency		[	]		(2.05	)		(1.00	)		0.32			(0.10	)
Total from investment operations		[	]		(1.48	)		(0.36	)		0.94			0.53
Less Distributions to Shareholders:
From net investment income		[	]		(0.57	)		(0.65	)		(0.62	)		(0.66	)
From net realized gains		[	]		(0.06	)		(0.07	)		(0.12	)		(0.27	)
Total distributions to shareholders		[	]		(0.63	)		(0.72	)		(0.74	)		(0.93	)
Net Asset Value, End of Period	$	[	]	$	5.92		$	8.03		$	9.11		$	8.91
Total return ^(e)		[	]%		(19.17	)% ^(f)		(4.22	)% ^(g)		11.10	%		6.03	%
Ratios to Average Net Assets/Supplemental Data:
Net expenses before interest expense ^(h)		[	]%		1.18	%		1.16	%		1.13	%		1.08	%
Interest expense		[	]		—			—	% ⁽ⁱ⁾		—			—
Net expenses ^(h)		[	]%		1.18	%		1.16	%		1.13	%		1.08	%
Waiver/Reimbursement		[	]%		—	% ⁽ⁱ⁾		—			—			—
Net investment income ^(h)		[	]%		8.06	%		7.28	%		6.88	%		6.90	%
Portfolio turnover rate		[	]%		25	%		2	% ^(j) (k)		—			—
Turnover of Columbia High Income Master Portfolio		[	]		—			32	% ^(j)		44	%		34	%
Net assets, end of period (000’s)	$	[	]	$	70,836		$	98,973		$	123,071		$	109,029

^(a)	Through February 27, 2008, the per share amounts and percentages reflect income and expenses assuming inclusion of the Fund’s proportionate share of income and expense of the Columbia High Income Master Portfolio.

^(b)	Effective February 28, 2008, the Fund converted to a stand-alone fund. Prior to February 28, 2008, the Fund operated in a master-feeder structure.

^(c)	On August 22, 2005, the Fund’s Investor A shares were renamed Class A shares.

^(d)	Per share data was calculated using the average shares outstanding during the period.

^(e)	Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge.

^(f)	Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

^(g)	Includes a reimbursement by the investment sub-advisor for a realized investment loss on disposal of an investment not meeting the Fund’s investment restrictions. This reimbursement increased total return and net asset value per share by less than 0.01% and $0.01, respectively.

^(h)	The benefits derived from expense reductions had an impact of less than 0.01%.

⁽ⁱ⁾	Rounds to less than 0.01%.

^(j)	Not annualized.

^(k)	Amount represents results after the Fund’s conversion to a stand-alone structure on February 28, 2008.

Columbia High Income Fund—Class B Shares ^(a)


	Year Ended March 31, 2010			Year Ended March 31, 2009			Year Ended March 31, 2008 ^(b)			Year Ended March 31, 2007			Year Ended March 31, 2006 ^(c)
Net Asset Value, Beginning of Period	$	[	]	$	8.01		$	9.09		$	8.89		$	9.29
Income from Investment Operations:
Net investment income ^(d)		[	]		0.52			0.57			0.55			0.56
Net realized and unrealized gain (loss) on investments and foreign currency		[	]		(2.05	)		(1.00	)		0.32			(0.10	)
Total from investment operations		[	]		(1.53	)		(0.43	)		0.87			0.46
Less Distributions to Shareholders:
From net investment income		[	]		(0.52	)		(0.58	)		(0.55	)		(0.59	)
From net realized gains		[	]		(0.06	)		(0.07	)		(0.12	)		(0.27	)
Total distributions to shareholders		[	]		(0.58	)		(0.65	)		(0.67	)		(0.86	)
Net Asset Value, End of Period	$	[	]	$	5.90		$	8.01		$	9.09		$	8.89
Total return ^(e)		[	]%		(19.84	)% ^(f)		(4.95	)% ^(g)		10.29	%		5.25	%
Ratios to Average Net Assets/Supplemental Data:
Net expenses before interest expense ^(h)		[	]%		1.93	%		1.91	%		1.88	%		1.83	%
Interest expense		[	]%		—			—	% ⁽ⁱ⁾		—			—
Net expenses ^(h)		[	]%		1.93	%		1.91	%		1.88	%		1.83	%
Waiver/Reimbursement		[	]%		—	% ⁽ⁱ⁾		—			—			—
Net investment income ^(h)		[	]%		7.29	%		6.54	%		6.16	%		6.22	%
Portfolio turnover rate		[	]%		25	%		2	% ^(j) (k)		—			—
Turnover of Columbia High Income Master Portfolio		[	]%		—			32	% ^(j)		44	%		34	%
Net assets, end of period (000’s)	$	[	]	$	36,667		$	64,786		$	93,413		$	102,085

^(a)	Through February 27, 2008, the per share amounts and percentages reflect income and expenses assuming inclusion of the Fund’s proportionate share of income and expense of the Columbia High Income Master Portfolio.

^(b)	Effective February 28, 2008, the Fund converted to a stand-alone fund. Prior to February 28, 2008, the Fund operated in a master-feeder structure.

^(c)	On August 22, 2005, the Fund’s Investor B shares were renamed Class B shares.

^(d)	Per share data was calculated using the average shares outstanding during the period.

^(e)	Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge.

^(f)	Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

^(g)	Includes a reimbursement by the investment sub-advisor for a realized investment loss on disposal of an investment not meeting the Fund’s investment restrictions. This reimbursement increased total return and net asset value per share by less than 0.01% and $0.01, respectively.

^(h)	The benefits derived from expense reductions had an impact of less than 0.01%.

⁽ⁱ⁾	Rounds to less than 0.01%.

^(j)	Not annualized.

^(k)	Amount represents results after the Fund’s conversion to a stand-alone structure on February 28, 2008.

Columbia High Income Fund—Class C Shares ^(a)


	Year Ended March 31, 2010			Year Ended March 31, 2009			Year Ended March 31, 2008 ^(b)			Year Ended March 31, 2007			Year Ended March 31, 2006 ^(c)
Net Asset Value, Beginning of Period	$	[	]	$	7.97		$	9.05		$	8.86		$	9.25
Income from Investment Operations:
Net investment income ^(d)		[	]		0.52			0.57			0.55			0.56
Net realized and unrealized gain (loss) on investments and foreign currency		[	]		(2.04	)		(1.00	)		0.31			(0.09	)
Total from investment operations		[	]		(1.52	)		(0.43	)		0.86			0.47
Less Distributions to Shareholders:
From net investment income		[	]		(0.52	)		(0.58	)		(0.55	)		(0.59	)
From net realized gains		[	]		(0.06	)		(0.07	)		(0.12	)		(0.27	)
Total distributions to shareholders		[	]		(0.58	)		(0.65	)		(0.67	)		(0.86	)
Net Asset Value, End of Period	$	[	]	$	5.87		$	7.97		$	9.05		$	8.86
Total return ^(e)		[	]		(19.81	)% ^(f)		(4.98	)% ^(g)		10.21	%		5.39	%
Ratios to Average Net Assets/Supplemental Data:
Net expenses before interest expense ^(h)		[	]%		1.93	%		1.91	%		1.88	%		1.83	%
Interest expense		[	]		—			—	% ⁽ⁱ⁾		—			—
Net expenses ^(h)		[	]%		1.93	%		1.91	%		1.88	%		1.83	%
Waiver/Reimbursement		[	]%		—	% ⁽ⁱ⁾		—			—			—
Net investment income ^(h)		[	]%		7.32	%		6.54	%		6.16	%		6.23	%
Portfolio turnover rate		[	]%		25	%		2	% ^(j) (k)		—			—
Turnover of Columbia High Income Master Portfolio		[	]%		—			32	% ^(j)		44	%		34	%
Net assets, end of period (000’s)	$	[	]	$	17,991		$	26,976		$	35,639		$	39,547

^(a)	Through February 27, 2008, the per share amounts and percentages reflect income and expenses assuming inclusion of the Fund’s proportionate share of income and expense of the Columbia High Income Master Portfolio.

^(b)	Effective February 28, 2008, the Fund converted to a stand-alone fund. Prior to February 28, 2008, the Fund operated in a master-feeder structure.

^(c)	On August 22, 2005, the Fund’s Investor C shares were renamed Class C shares.

^(d)	Per share data was calculated using the average shares outstanding during the period.

^(e)	Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge.

^(f)	Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

^(g)	Includes a reimbursement by the investment sub-advisor for a realized investment loss on disposal of an investment not meeting the Fund’s investment restrictions. This reimbursement increased total return and net asset value per share by less than 0.01% and $0.01, respectively.

^(h)	The benefits derived from expense reductions had an impact of less than 0.01%.

⁽ⁱ⁾	Rounds to less than 0.01%.

^(j)	Not annualized.

^(k)	Amount represents results after the Fund’s conversion to a stand-alone structure on February 28, 2008.

Hypothetical Fees and Expenses

Columbia High Income Fund—Class A Shares

Maximum Initial Sales Charge 4.75%

Initial Hypothetical Investment Amount
$10,000.00

Assumed Rate of Return 5%

Year

Cumulative Return
Before Fees and
Expenses

Annual Expense
Ratio

Cumulative Return
After Fees and
Expenses

Hypothetical Year-
End Balance After
Fees and Expenses

Annual Fees and
Expenses ^(a)

5.00

[

]% ^(b)

[

]

[

]

10.25

[

]

[

]

15.76

[

]

[

]

21.55

[

]

[

]

27.63

[

]

[

]

34.01

[

]

[

]

40.71

[

]

[

]

47.75

[

]

[

]

55.13

[

]

[

]

62.89

[

]

[

]

Total Gain After Fees and Expenses

[

]

Total Annual Fees and Expenses Paid

[

]

^(a)	Annual Fees and Expenses are calculated based on the average between the beginning and ending balance for each year. All information is calculated on an annual compounding basis.

^(b)	Reflects deduction of the maximum initial sales charge.

Columbia High Income Fund—Class B Shares

Maximum Initial Sales Charge 0.00%

Initial Hypothetical Investment Amount
$10,000.00

Assumed Rate of Return 5%

Year

Cumulative Return
Before Fees and
Expenses

Annual Expense
Ratio

Cumulative Return
After Fees and
Expenses

Hypothetical Year-
End Balance After
Fees and Expenses

Annual Fees and
Expenses ^(a)

5.00

[

]

[

]

10.25

[

]

[

]

15.76

[

]

[

]

21.55

[

]

[

]

27.63

[

]

[

]

34.01

[

]

[

]

40.71

[

]

[

]

47.75

[

]

[

]

55.13

[

]

[

]

62.89

[

]

[

]

Total Gain After Fees and Expenses

[

]

Total Annual Fees and Expenses Paid

[

]

^(a)	Annual Fees and Expenses are calculated based on the average between the beginning and ending balance for each year. All information is calculated on an annual compounding basis.

Columbia High Income Fund—Class C Shares

Maximum Initial Sales Charge 0.00%

Initial Hypothetical Investment Amount
$10,000.00

Assumed Rate of Return 5%

Year

Cumulative Return
Before Fees and
Expenses

Annual Expense
Ratio

Cumulative Return
After Fees and
Expenses

Hypothetical Year-
End Balance After
Fees and Expenses

Annual Fees and
Expenses ^(a)

5.00

[

]

[

]

10.25

[

]

[

]

15.76

[

]

[

]

21.55

[

]

[

]

27.63

[

]

[

]

34.01

[

]

[

]

40.71

[

]

[

]

47.75

[

]

[

]

55.13

[

]

[

]

62.89

[

]

[

]

Total Gain After Fees and Expenses

[

]

Total Annual Fees and Expenses Paid

[

]

^(a)	Annual Fees and Expenses are calculated based on the average between the beginning and ending balance for each year. All information is calculated on an annual compounding basis.

LOGO

Columbia High Income Fund

Class A, Class B and Class C Shares

Prospectus, August 1, 2010

For More Information


By Mail:		Columbia Funds c/o Columbia Management Investment Services Corp. P.O. Box 8081 Boston, MA 02266-8081

By Telephone:		800.345.6611

Online:		www.columbiafunds.com

Annual and Semi-Annual Reports to Shareholders

Shareholder Communications with the Board

Statement of Additional Information

The SAI provides more detailed information about the Fund and its policies. The SAI is legally part of this prospectus (incorporated by reference). A copy has been filed with the SEC.

Information Provided by the SEC

FUNDamentals™ is a trademark of Ameriprise Financial.

The investment company registration number of Columbia Funds Series Trust, of which the Fund is a series, is 811-09645.

One Financial Center, Boston, MA 02111-2621

800.345.6611 www.columbiafunds.com

INT-36/[ ]-0810

LOGO

Prospectus

August 1, 2010

Columbia Funds

Columbia High Income Fund

Ticker symbol

Class Z Shares NYPAX

Table of Contents


Columbia High Income Fund		3

Investment Objective		3

Fees and Expenses of the Fund		3

Principal Investment Strategies		5

Principal Risks		5

Performance Information		7

Investment Adviser and Portfolio Manager(s)		8

Purchase and Sale of Fund Shares		8

Tax Information		8

Payments to Broker-Dealers and Other Financial Intermediaries		8

Additional Investment Strategies and Policies		9

Management of the Fund		11

Primary Service Providers		11

Other Roles and Relationships of Ameriprise Financial and its Affiliates—Certain Conflicts of Interest		13

Certain Legal Matters		14

About Class Z Shares		15

Description of the Share Class		15

Financial Intermediary Compensation		16

Buying, Selling and Exchanging Shares		17

Share Price Determination		17

Transaction Rules and Policies		18

Opening an Account and Placing Orders		22

Distributions and Taxes		26

Financial Highlights		29

Hypothetical Fees and Expenses		30

Icons Guide

Investment Objective

Fees and Expenses of the Fund

Principal Investment Strategies

Principal Risks

Performance Information

Other Roles and Relationships of Ameriprise Financial and its Affiliates - Certain Conflicts of Interest

Columbia High Income Fund

Investment Objective

The Fund seeks total return, consisting of a high level of income and capital appreciation.

Fees and Expenses of the Fund

This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.

Shareholder Fees (fees paid directly from your investment)


		Class Z Shares
Maximum sales charge (load) imposed on purchases, as a % of offering price		N/A
Maximum deferred sales charge (load) imposed on redemptions, as a % of the lower of the original purchase price or net asset value		N/A

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)


	Class Z Shares
Management fees	0.77	%
Distribution and/or service (Rule 12b-1) fees	0.00	%
Other expenses	[ ]	%
Total annual Fund operating expenses	[ ]	%

Example

The following example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds.

The example illustrates the hypothetical expenses that you would incur over the time periods indicated, and assumes that:

•

you invest $10,000 in Class Z shares of the Fund for the periods indicated,

•

your investment has a 5% return each year, and

•

the Fund’s total annual operating expenses remain the same as shown in the table above.

Based on the assumptions listed above, your costs would be:

1 year

3 years

5 years

10 years

Class Z Shares

[ ]

Remember this is an example only. Your actual costs may be higher or lower.

Portfolio Turnover

Principal Investment Strategies

When selecting investments for the Fund, MacKay Shields:

•

focuses on individual security selection (“bottom-up” analysis).

•

uses fundamental credit analysis.

•

emphasizes current income while attempting to minimize risk to principal.

•

seeks to identify a catalyst for capital appreciation such as an operational or financial restructuring.

•

attempts to manage risk by diversifying the Fund’s investments across securities of many different issuers.

Principal Risks

•

Credit Risk – Credit risk applies to most debt securities, but is generally not a factor for obligations backed by the “full faith and credit” of the U.S. Government. The Fund could

•

Interest Rate Risk – Debt securities are subject to interest rate risk. In general, if prevailing interest rates rise, the values of debt securities will tend to fall, and if interest rates fall, the values of debt securities will tend to rise. Changes in the value of a debt security usually will not affect the amount of income the Fund receives from it but may affect the value of the Fund’s shares. Interest rate risk is generally greater for debt securities with longer maturities/durations.

•

Foreign Securities Risk – Foreign securities are subject to special risks as compared to securities of U.S. issuers. For example, foreign markets can be extremely volatile. Fluctuations in currency exchange rates may impact the value of foreign securities denominated in foreign currencies, or in U.S. dollars, without a change in the intrinsic value of those securities. Foreign securities may be less liquid than domestic securities so that the Fund may, at times, be unable to sell foreign securities at desirable times or prices. Brokerage commissions, custodial fees and other fees are also generally higher for foreign securities. The Fund may have limited or no legal recourse in the event of default with respect to certain foreign securities, including those issued by foreign governments. In addition, foreign governments may impose potentially confiscatory withholding or other taxes, which could reduce the amount of income and capital gains available to distribute to shareholders. Other risks include possible delays in the settlement of transactions or in the payment of income; generally less publicly available information about companies; the impact of political, social or diplomatic events; possible seizure, expropriation or nationalization of a company or its assets; possible imposition of currency exchange controls; and accounting, auditing and financial reporting standards that may be less comprehensive and stringent than those applicable to domestic companies.

•

Convertible Securities Risk – Convertible securities are subject to the usual risks associated with debt securities, such as interest rate risk and credit risk. Convertible securities also react to changes in the value of the common stock into which they convert, and are thus subject to market risk. Because the value of a convertible security can be influenced by both interest rates and market movements, a convertible security generally is not as sensitive to interest rates as a similar debt security, and generally will not vary in value in response to other factors to the same extent as the underlying common stock. In the event of a liquidation of the issuing company, holders of convertible securities would typically be paid before the company’s common stockholders but after holders of any senior debt obligations of the company. The Fund may be forced to convert a convertible security before it otherwise would choose to do so, which may decrease the Fund’s return.

Performance Information

Year by Year Total Return (%)as of December 31 Each Year*

The bar chart below shows you how the performance of the Fund’s Class Z shares has varied from year to year.

LOGO

*	Year-to-date return as of June 30, 2010: [ ]%

Best and Worst Quarterly Returns During this Period


Best:	[ ] quarter [ ]:	[ ]%
Worst:	[ ] quarter [ ]:	[ ]%

Average Annual Total Return as of December 31, 2009

The table compares the Fund’s returns for each period with those of the Credit Suisse High Yield Index, which is a broad-based index that tracks the performance of high-yield bonds.


	1 year		5 years		Life of Fund
Class Z shares returns before taxes (February 14, 2000 inception)	[ ]	%	[ ]	%	[ ]	%
Class Z shares returns after taxes on distributions	[ ]	%	[ ]	%	[ ]	%
Class Z shares returns after taxes on distributions and sale of Fund shares	[ ]	%	[ ]	%	[ ]	%
Credit Suisse High Yield Index (reflects no deductions for fees, expenses or taxes; returns shown from January 31, 2000)	[ ]	%	[ ]	%	[ ]	%

Investment Adviser and Portfolio Manager(s)

Investment Adviser

Columbia Management Investment Advisers, LLC

Portfolio Manager

J. Matthew Philo, CFA

Manager. Service with the Fund since inception.

Investment Subadviser

MacKay Shields LLC

Purchase and Sale of Fund Shares

Tax Information

Payments to Broker-Dealers and Other Financial Intermediaries

Additional Investment Strategies and Policies

Changing the Fund’s Investment Objective and Policies

Investment Guidelines

Holding Other Kinds of Investments

Investing in Money Market Funds

Lending Securities

Portfolio Holdings Disclosure

In addition, more current information concerning the Fund’s portfolio holdings as of specified dates also may be disclosed on the Columbia Funds’ website.

Investing Defensively

Mailings to Households

Additional Information on Portfolio Turnover

A mutual fund that replaces, or turns over, more than 100% of its investments in a year is considered to have a high portfolio turnover rate. A high portfolio turnover rate can generate larger distributions of short-term capital gains to shareholders, which for individuals are generally taxable at higher rates than long-term capital gains for U.S. federal income tax purposes. A high portfolio turnover rate can also mean higher brokerage and other transaction costs, which could reduce a fund’s returns. In general, the greater the volume of buying and selling by a fund, the greater the impact that brokerage commissions will have on its returns. The Fund generally buys securities for capital appreciation, investment income or both. However, the Fund may sell securities regardless of how long they’ve been held. You’ll find the Fund’s portfolio turnover rate for its most recent fiscal year in the Fees and Expenses of the Fund — Portfolio Turnover section of this prospectus and portfolio turnover rates for prior fiscal years in the Financial Highlights section of this prospectus.

Management of the Fund

Primary Service Providers

The Adviser

Subadviser(s)

The Adviser has engaged an investment subadviser to make the day-to-day investment decisions for the Fund. The Adviser retains ultimate responsibility (subject to Board oversight) for overseeing any subadviser it engages and for evaluating the Fund’s needs and the subadvisers’ skills and abilities on an ongoing basis. Based on its evaluations, the Adviser may at times recommend to the Board that the Fund change, add or terminate one or more subadvisers; continue to retain a subadviser even though the subadviser’s ownership or corporate structure has changed; or materially change a subadvisory agreement with a subadviser.

The SEC has issued an order that permits the Adviser, subject to the approval of the Board, to appoint an unaffiliated subadviser or to change the terms of a subadvisory agreement for the Fund without first obtaining shareholder approval. The order permits the Fund to add or to change unaffiliated subadvisers or to change the fees paid to subadvisers from time to time without the expense and delays associated with obtaining shareholder approval of the change. The Adviser and its affiliates may have other relationships, including significant financial relationships, with current or potential subadvisers or their affiliates, which may create certain conflicts of interest. When making recommendations to the Board to appoint or to change a subadviser, or to change the terms of a subadvisory agreement, the Adviser discloses to the Board the nature of any material relationships it has with a subadviser or its affiliates.

MacKay Shields LLC

MacKay Shields Portfolio Managers

J. Matthew Philo, CFA

Service with the Fund since inception.

The Administrator

Annual Administration Fee,

as a % of Average Daily Net Assets


Columbia High Income Fund		0.23	%

The Distributor

The Transfer Agent

The Transfer Agent is a registered transfer agent and a wholly-owned subsidiary of Ameriprise Financial. The Transfer Agent’s responsibilities include processing purchases, sales and exchanges, calculating and paying distributions, keeping shareholder records, preparing account statements and providing customer service. The Fund pays the Transfer Agent monthly fees on a per-account basis. Fees paid to the Transfer Agent include reimbursements for certain out-of-pocket expenses and sub-transfer agency fees, subject to certain limitations, paid by the Transfer Agent on the Fund’s behalf.

Expense Reimbursement Arrangements

The Adviser has voluntarily agreed to reimburse a portion of the Fund’s expenses so that the Fund’s ordinary operating expenses (excluding any distribution and service fees, brokerage commissions, interest, taxes and extraordinary expenses, but including custodian charges relating to overdrafts, if any), after giving effect to any balance credits from the Fund’s custodian, do not exceed 1.00% of the Fund’s average daily net assets on an annualized basis. The Adviser, in its discretion, may revise or discontinue this arrangement at any time.

Other Roles and Relationships of Ameriprise Financial and its Affiliates—Certain Conflicts of Interest

Conflicts of interest and limitations that could affect a Columbia Fund may arise from, for example, the following:

•

compensation and other benefits received by the Adviser and other Ameriprise Financial affiliates related to the management/administration of a Columbia Fund and the sale of its shares;

•

separate and potentially divergent management of a Columbia Fund and other funds and accounts advised/managed by the Adviser and other Ameriprise Financial affiliates;

•

regulatory and other investment restrictions on investment activities of the Adviser and other Ameriprise Financial affiliates and accounts advised/managed by them;

•

insurance and other relationships of Ameriprise Financial affiliates with companies and other entities in which a Columbia Fund invests; and

•

regulatory and other restrictions relating to the sharing of information between Ameriprise Financial and its affiliates, including the Adviser, and a Columbia Fund.

Certain Legal Matters

Ameriprise Financial and certain of its affiliates have historically been involved in a number of legal, arbitration and regulatory proceedings, including routine litigation, class actions and governmental actions, concerning matters arising in connection with the conduct of their business activities. Ameriprise Financial believes that the Fund is not currently the subject of, and that neither Ameriprise Financial nor any of its affiliates is the subject of, any pending legal, arbitration or regulatory proceedings that are likely to have a material adverse effect on the Fund or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Fund. Information regarding certain pending and settled legal proceedings may be found in the Fund’s shareholder reports and in the SAI. Additionally, Ameriprise Financial is required to make 10-Q, 10-K and, as necessary, 8-K filings with the SEC on legal and regulatory matters that relate to Ameriprise Financial and its affiliates. Copies of these filings may be obtained by accessing the SEC website at www.sec.gov.

About Class Z Shares

Description of the Share Class

Share Class Features


		Class Z Shares
Eligible Investors and Minimum Initial Investments		Class Z shares are available only to certain eligible investors, which are subject to different minimum initial investment requirements. These minimum initial investment amounts range from $0 to $2,500. See Buying, Selling and Exchanging Shares – Opening an Account and Placing Orders for details.

Investment Limits		none

Conversion Features		none

Front-End Sales Charges		none

Contingent Deferred Sales Charges (CDSCs)		none

Maximum Distribution and Service Fees		none

FUNDamentals ^TM

Selling and/or Servicing Agents

The terms “selling agent” and “servicing agent” refer to the financial intermediary that employs your financial advisor. Selling and/or servicing agents include, for example, brokerage firms, banks, investment advisors, third party administrators and other financial intermediaries, including Ameriprise Financial and its affiliates.

Financial Intermediary Compensation

The Distributor and the Adviser make payments, from their own resources, to certain financial intermediaries, including other Ameriprise Financial affiliates, for marketing/sales support services relating to the Columbia Funds. Such payments are generally based upon one or more of the following factors: average net assets of the Columbia Funds sold by the Distributor attributable to that intermediary, gross sales of the Columbia Funds distributed by the Distributor attributable to that intermediary, reimbursement of ticket charges (fees that an intermediary firm charges its representatives for effecting transactions in Fund shares) or a negotiated lump sum payment. While the financial arrangements may vary for each intermediary, the support payments to any one intermediary are generally between 0.05% and 0.50% on an annual basis for payments based on average net assets of the Fund attributable to the intermediary, and between 0.05% and 0.25% on an annual basis for firms receiving a payment based on gross sales of the Columbia Funds attributable to the intermediary.

These payments for shareholder servicing support vary by financial intermediary but generally are not expected, with certain limited exceptions, to exceed 0.40% of the average aggregate value of the Fund’s shares in any financial intermediary’s program on an annual basis for those classes of shares that pay a service fee pursuant to a plan under Rule 12b-1 under the 1940 Act, and 0.45% of the average aggregate value of the Fund’s shares in any financial intermediary’s program on an annual basis for those classes of shares that do not pay a service fee pursuant to a plan under Rule 12b-1 under the 1940 Act.

Amounts paid by the Distributor and the Adviser and their affiliates are paid out of the Distributor’s and the Adviser’s own resources and do not increase the amount paid by you or the Fund. You can find further details about the payments made by the Distributor and the Adviser and their affiliates and the services provided by financial intermediaries as well as a list of the intermediaries to which the Distributor and the Adviser have agreed to make marketing support payments in the SAI. Your financial intermediary may charge you fees and commissions in addition to those described in this prospectus. You should consult with your financial intermediary and review carefully any disclosure your financial intermediary provides regarding its services and compensation. Depending on the financial arrangement in place at any particular time, a financial intermediary and its financial consultants may have a financial incentive for recommending the Fund or a particular share class over others. See Management of the Fund – Other Roles and Relationships of Ameriprise Financial and its Affiliates – Certain Conflicts of Interest for more information.

Buying, Selling and Exchanging Shares

Share Price Determination

FUNDamentals ^TM

NAV Calculation

Each of the Fund’s share classes calculates its NAV as follows:


		(Value of assets of the share class)
NAV	=	—(Liabilities of the share class)
		Number of outstanding shares of the class

Transaction Rules and Policies

Also remember that the Fund may refuse any order to buy or exchange shares. If this happens, we’ll return any money we’ve received, but no interest will be paid on that money.

Order Processing

FUNDamentals ^TM

Business Days

A business day is any day that the New York Stock Exchange (NYSE) is open. A business day ends at the close of regular trading on the NYSE, usually at 4:00 p.m. Eastern time. If the NYSE closes early, the business day ends as of the time the NYSE closes. On holidays and other days when the NYSE is closed, the Fund’s net asset value is not calculated and the Fund does not accept buy or sell orders. However, the value of the Fund’s assets may still be affected on such days to the extent that the Fund holds foreign securities that trade on days that foreign securities markets are open.

“Good Form”

An order is in “good form” if the Transfer Agent or your selling and/or servicing agent has all of the information and documentation it deems necessary to effect your order. For example, when you sell shares by letter of instruction, “good form” means that your letter has (i) complete instructions and the signatures of all account owners, (ii) a Medallion signature guarantee for amounts equal to or greater than $100,000 and (iii) any other required documents completed and attached. For the documents required for sales by corporations, agents, fiduciaries, surviving joint owners and other legal entities, call 800.345.6611.

Medallion Signature Guarantees

Written Transactions

Telephone Transactions

Telephone orders may not be as secure as written orders. Columbia Funds will take reasonable steps to confirm that telephone instructions are genuine. For example, we require proof of your identification before we will act on instructions received by telephone and may record telephone conversations. However, the Fund and its agents will not be responsible for any losses, costs or expenses resulting from an unauthorized telephone instruction when reasonable steps have been taken to confirm that telephone instructions are

genuine. Telephone orders may be difficult to complete during periods of significant economic or market change or business interruption.

Online Transactions

Once you have an account, contact Columbia Funds at 800.345.6611 for more information on account trading restrictions and the special sign-up procedures required for online transactions. The Transfer Agent has procedures in place to authenticate electronic orders you deliver through the internet. You will be required to accept the terms of an online agreement and to establish and utilize a password in order to access online account services.

You can sell up to an aggregate of $100,000 of shares through the internet in any 30-day period if you qualify for internet orders.

Customer Identification Program

Small Account Policy—Accounts Below $250

Small Account Policy—Minimum Balance Fee

Exceptions to the Above Small Account Policy (Accounts Below $250 and Minimum Balance Fee)

Small Account Policy—Broker/Dealer and Wrap Fee Accounts

Columbia Funds may automatically redeem shares at any time from broker/dealer networked accounts and wrap fee accounts that have account balances of $20 or less or that have less than one share.

Cash Flows

Information Sharing Agreements

As required by Rule 22c-2 under the 1940 Act, the Columbia Funds or certain of their service providers will enter into information sharing agreements with financial intermediaries, including participating life insurance companies and financial intermediaries that sponsor or offer retirement plans through which shares of the Columbia Funds are made available for purchase. Pursuant to Rule 22c-2, financial intermediaries are required, upon request, to: (i) provide shareholder account and transaction information and (ii) execute instructions from the Fund to restrict or prohibit further purchases of Fund shares by shareholders who have been identified by the Fund as having engaged in transactions that violate the Fund’s excessive trading policies and procedures. See Buying, Selling and Exchanging Shares – Excessive Trading Practices for more information.

Excessive Trading Practices

Some financial intermediaries apply their own restrictions or policies to underlying investor accounts, which may be more or less restrictive than those described here. This may impact the Fund’s ability to curtail excessive trading, even where it is identified. For these and other reasons, it is possible that excessive trading may occur despite the Fund’s efforts to detect and prevent it.

Risks of Excessive Trading – Excessive trading creates certain risks to the Fund’s long-term shareholders and may create the following adverse effects:

•

negative impact on the Fund’s performance;

•

potential dilution of the value of the Fund’s shares;

•

losses on the sale of investments resulting from the need to sell securities at less favorable prices;

•

increased taxable gains to the Fund’s remaining shareholders resulting from the need to sell securities to meet sell orders; and

•

increased brokerage and administrative costs.

Opening an Account and Placing Orders

Columbia Funds encourages you to consult with a financial advisor who can help you with your investment decisions and who can help you open an account. Once you have an account, you can buy, sell and exchange shares by contacting your financial advisor who will send your order to the Transfer Agent or your selling and/or servicing agent. As described in Buying, Selling and Exchanging Shares – Transaction Rules and Policies , once you have an account you can also communicate your orders directly to the Transfer Agent by mail, by telephone or online.

Buying Shares

Minimum Initial Investments

There is no minimum initial investment in Class Z shares for the following categories of eligible investors:

•

The minimum initial investment in Class Z shares for the following categories of eligible investors is $1,000 :

•

The minimum initial investment in Class Z shares for the following categories of eligible investors is $2,500:

•

Any investor buying shares through a Columbia Management state tuition plan organized under Section 529 of the Internal Revenue Code.

•

Any trustee or director (or family member of a trustee or director) of a fund distributed by the Distributor.

•

Any employee (or family member of an employee) of Bank of America or one of its subsidiaries.

•

Any institutional investor who is a corporation, partnership, trust, foundation, endowment, institution, government

entity, or similar organization, which meets the respective qualifications for an accredited investor, as defined under the Securities Act of 1933.

•

For investors establishing a Systematic Investment Plan, the minimum initial investment is $50.

Minimum Additional Investments

There is no minimum additional investment for Class Z shares.

Systematic Investment Plan

Dividend Diversification

Wire Purchases

You may buy Class Z shares of the Fund by wiring money from your bank account to your Fund account by calling the Transfer Agent at 800.422.3737.

Electronic Funds Transfer

Other Purchase Rules You Should Know

•

Once the Transfer Agent or your selling and/or servicing agent receives your buy order in “good form,” your purchase will be made at the next calculated net asset value per share.

•

You generally buy Class Z shares at net asset value because no front-end sales charge applies to purchases of this share class.

•

Selling and/or servicing agents are responsible for sending your buy orders to the Transfer Agent and ensuring that we receive your money on time.

•

Shares bought are recorded on the books of the Fund. The Fund doesn’t issue certificates.

Selling Shares

When you sell your shares, the Fund is effectively buying them back from you. This is called a redemption.

Wire Redemptions

Electronic Funds Transfer

Systematic Withdrawal Plan

In-Kind Distributions

Other Redemption Rules You Should Know

•

Once the Transfer Agent or your selling and/or servicing agent receives your sell order in “good form,” your shares will be sold at the next calculated net asset value per share.

•

No interest will be paid on uncashed redemption checks.

•

Other restrictions may apply to retirement accounts. For information about these restrictions, contact your retirement plan administrator.

•

Also keep in mind Columbia Funds’ Small Account Policy, which is described above in Buying, Selling and Exchanging Shares – Transaction Rules and Policies .

Exchanging Shares

Systematic Exchanges

The rules described below for making exchanges apply to systematic exchanges.

Other Exchange Rules You Should Know

•

Exchanges are made at net asset value.

•

You can generally make exchanges between like share classes of any Columbia Fund. Some exceptions apply.

•

The rules for buying shares of a Columbia Fund generally apply to exchanges into that Fund.

•

You may make exchanges only into a Columbia Fund that is legally offered and sold in your state of residence.

•

You generally may make an exchange only into a Columbia Fund that is accepting investments.

•

The Fund may change or cancel your right to make an exchange by giving the amount of notice required by regulatory authorities (generally 60 days for a material change or cancellation).

•

Unless your account is part of a tax-advantaged arrangement, an exchange for shares of another fund is a taxable event, and you may recognize a gain or loss for tax purposes.

Distributions and Taxes

Distributions to Shareholders

A mutual fund can make money two ways:

•

It can earn income on its investments. Examples of fund income are interest paid on money market instruments and bonds, and dividends paid on common stocks.

•

FUNDamentals ^TM

Distributions

Declaration and Distribution Schedule


Declarations		monthly
Distributions		monthly

The Fund may, however, declare and pay distributions of net investment income more frequently.

Unless you are a tax-exempt investor or holding Fund shares through a tax-advantaged account (such as a 401(k) plan or IRA), you should consider avoiding buying Fund shares shortly before the Fund makes a distribution of net investment income or net realized capital gain, because doing so can cost you money in taxes. This is because you will, in effect, receive part of your purchase price back in the distribution. This is known as “buying a dividend.” To avoid “buying a dividend,” check the Fund’s distribution schedule online at www.columbiafunds.com, or by calling us at 800.345.6611, before you invest.

Taxes and Your Investment

The Fund will send you a statement each year showing how much you’ve received in distributions in the prior year and the distributions’ character for federal income tax purposes. The Fund expects that distributions will consist primarily of ordinary income. In addition, you should be aware of the following:

•

Distributions generally are taxable to you when paid, whether they are paid in cash or automatically reinvested in additional shares of the Fund.

•

FUNDamentals ^TM

Taxes

Financial Highlights

Columbia High Income Fund—Class Z Shares ^(a)


	Year Ended March 31, 2010			Year Ended March 31, 2009			Year Ended March 31, 2008 ^(b)			Year Ended March 31, 2007			Year Ended March 31, 2006 ^(c)
Net Asset Value, Beginning of Period	$	[ ]		$	8.10		$	9.19		$	8.98		$	9.37
Income from Investment Operations:
Net investment income ^(d)		[ ]			0.60			0.66			0.64			0.66
Net realized and unrealized gain (loss) on investments and foreign currency		[ ]			(2.07	)		(1.01	)		0.33			(0.10	)
Total from investment operations		[ ]			(1.47	)		(0.35	)		0.97			0.56
Less Distributions to Shareholders:
From net investment income		[ ]			(0.59	)		(0.67	)		(0.64	)		(0.68	)
From net realized gains		[ ]			(0.06	)		(0.07	)		(0.12	)		(0.27	)
Total distributions to shareholders		[ ]			(0.65	)		(0.74	)		(0.76	)		(0.95	)
Net Asset Value, End of Period	$	[ ]		$	5.98		$	8.10		$	9.19		$	8.98
Total return ^(e)		[ ]	%		(18.92	)% ^(f)		(4.05	)% ^(g)		11.41	%		6.37	%
Ratios to Average Net Assets/Supplemental Data:
Net expenses before interest expense ^(h)		[ ]	%		0.93	%		0.91	%		0.88	%		0.83	%
Interest expense		[ ]			—			—	% ⁽ ⁱ ⁾		—			—
Net expenses ^(h)		[ ]	%		0.93	%		0.91	%		0.88	%		0.83	%
Waiver/Reimbursement		[ ]	%		—	% ⁽ ⁱ ⁾		—			—			—
Net investment income ^(h)		[ ]	%		8.41	%		7.54	%		7.14	%		7.19	%
Portfolio turnover rate		[ ]	%		25	%		2	% ^(j) (k)		—			—
Turnover of Columbia High Income Master Portfolio		[ ]	%		—			32	% ^(j)		44	%		34	%
Net assets, end of period (000’s)	$	[ ]		$	486,116		$	545,228		$	739,921		$	681,752

^(a)	Through February 27, 2008, the per share amounts and percentages reflect income and expenses assuming inclusion of the Fund’s proportionate share of income and expense of the Columbia High Income Master Portfolio.

^(b)	Effective February 28, 2008, the Fund converted to a stand-alone fund. Prior to February 28, 2008, the Fund operated in a master-feeder structure.

^(c)	On August 22, 2005, the Fund’s Primary A shares were renamed Class Z shares.

^(d)	Per share data was calculated using the average shares outstanding during the period.

^(e)	Total return at net asset value assuming all distributions reinvested.

^(f)	Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

^(g)	Includes a reimbursement by the investment sub-advisor for a realized investment loss on disposal of an investment not meeting the Fund’s investment restrictions. This reimbursement increased total return and net asset value per share by less than 0.01% and $0.01, respectively.

^(h)	The benefits derived from expense reductions had an impact of less than 0.01%.

⁽ⁱ⁾	Rounds to less than 0.01%.

^(j)	Not annualized.

^(k)	Amount represents results after the Fund’s conversion to a stand-alone structure on February 28, 2008.

Hypothetical Fees and Expenses

The following supplemental hypothetical investment information provides additional information about the effect of the fees and expenses of the Fund, including investment advisory fees and other Fund costs, on the Fund’s returns over a 10-year period. The chart shows the estimated fees and expenses that would be charged on a hypothetical investment of $10,000 in Class Z shares of the Fund, assuming a 5% return each year, the cumulative return after fees and expenses and the hypothetical year-end balance after fees and expenses. The chart also assumes that all dividends and distributions are reinvested. The annual expense ratio used for the share class, which is the same as that stated in the Annual Fund Operating Expenses table, is presented in the chart and is net of any contractual fee waivers or expense reimbursements for the period of contractual commitment. Your actual costs may be higher or lower.

Columbia High Income Fund—Class Z Shares


Maximum Initial Sales Charge 0.00%			Initial Hypothetical Investment Amount $10,000.00				Assumed Rate of Return 5%
Year	Cumulative Return Before Fees and Expenses		Annual Expense Ratio		Cumulative Return After Fees and Expenses		Hypothetical Year- End Balance After Fees and Expenses		Annual Fees and Expenses ^(a)
1	5.00	%	[ ]	%	[ ]	%	$	[ ]	$	[ ]
2	10.25	%	[ ]	%	[ ]	%	$	[ ]	$	[ ]
3	15.76	%	[ ]	%	[ ]	%	$	[ ]	$	[ ]
4	21.55	%	[ ]	%	[ ]	%	$	[ ]	$	[ ]
5	27.63	%	[ ]	%	[ ]	%	$	[ ]	$	[ ]
6	34.01	%	[ ]	%	[ ]	%	$	[ ]	$	[ ]
7	40.71	%	[ ]	%	[ ]	%	$	[ ]	$	[ ]
8	47.75	%	[ ]	%	[ ]	%	$	[ ]	$	[ ]
9	55.13	%	[ ]	%	[ ]	%	$	[ ]	$	[ ]
10	62.89	%	[ ]	%	[ ]	%	$	[ ]	$	[ ]
Total Gain After Fees and Expenses							$	[ ]
Total Annual Fees and Expenses Paid									$	[ ]

^(a)	Annual Fees and Expenses are calculated based on the average between the beginning and ending balance for each year. All information is calculated on an annual compounding basis.

LOGO

Columbia High Income Fund

Class Z Shares

Prospectus, August 1, 2010

For More Information


By Mail:		Columbia Funds c/o Columbia Management Investment Services Corp. P.O. Box 8081 Boston, MA 02266-8081

By Telephone:		800.345.6611

Online:		www.columbiafunds.com

Annual and Semi-Annual Reports to Shareholders

Shareholder Communications with the Board

Statement of Additional Information

The SAI provides more detailed information about the Fund and its policies. The SAI is legally part of this prospectus (incorporated by reference). A copy has been filed with the SEC.

Information Provided by the SEC

FUNDamentals™ is a trademark of Ameriprise Financial.

The investment company registration number of Columbia Funds Series Trust, of which the Fund is a series, is 811-09645.

One Financial Center, Boston, MA 02111-2621

800.345.6611 www.columbiafunds.com

INT-36/[ ]-0810

Columbia Management ^®


		COLUMBIA FUNDS SERIES TRUST

		Shares, Class A Shares, Class B Shares, Class C Shares and Class Z Shares

		STATEMENT OF ADDITIONAL INFORMATION

		August 1, 2010


Fixed Income Funds

Fund	Shares	Class A Shares	Class B Shares	Class C Shares	Class Z Shares
Corporate Bond Portfolio	NCOBX	—	—	—	—
Mortgage- and Asset-Backed Portfolio	NMTGX	—	—	—	—
Columbia Short Term Bond Fund	—	NSTRX	NSTFX	NSTIX	NSTMX
Columbia Total Return Bond Fund	—	NSFAX	NSFNX	NSFCX	NSFIX
Columbia Short Term Municipal Bond Fund	—	NSMMX	NSMNX	NSMUX	NSMIX
Columbia High Income Fund	—	NAHAX	NHYBX	NYICX	NYPAX

This Statement of Additional Information (SAI) is not a prospectus, is not a substitute for reading any prospectus and is intended to be read in conjunction with the Funds’ prospectuses dated August 1, 2010. The most recent annual reports for the Funds, which include the Funds’ audited financial statements dated March 31, 2010, are incorporated by reference into this SAI.

Copies of any Fund’s current prospectuses and annual and semi-annual reports may be obtained without charge by writing Columbia Management Investment Services Corp., P.O. Box 8081, Boston, MA 02266-8081, by calling Columbia Funds at 800.345.6611 or by visiting the Columbia Funds’ website at www.columbiafunds.com.

INT-[ ]

TABLE OF CONTENTS


		Page
SAI PRIMER		3
ABOUT THE TRUST		6
ABOUT THE FUNDS’ INVESTMENTS		7
Certain Investment Activity Limits		7
Fundamental and Non-Fundamental Investment Policies		7
Exemptive Orders		8
Permissible Investments and Related Risks		9
Borrowings		43
Short Sales		43
Lending Securities		45
Portfolio Turnover		45
Disclosure of Portfolio Information		45
INVESTMENT ADVISORY AND OTHER SERVICES		51
The Adviser and Investment Advisory Services		51
The Subadviser(s) and Investment Subadvisory Services		58
The Administrator		63
Pricing and Bookkeeping Services		64
The Principal Underwriter/Distributor		66
Other Roles and Relationships of Ameriprise Financial and its Affiliates – Certain Conflicts of Interest		68
Other Services Provided		72
Distribution and Servicing Plans		73
Expense Limitations		75
Codes of Ethics		75
Proxy Voting Policies and Procedures		75
Expenses Paid by Third Parties		76
FUND GOVERNANCE		78
The Board		78
The Officers		87
BROKERAGE ALLOCATION AND OTHER PRACTICES		91
General Brokerage Policy, Brokerage Transactions and Broker Selection		91
Brokerage Commissions		93
Directed Brokerage		94
Securities of Regular Broker/Dealers		94
Additional Shareholder Servicing Payments		94
Additional Financial Intermediary Payments		96
CAPITAL STOCK AND OTHER SECURITIES		99
Description of the Trust’s Shares		99
PURCHASE, REDEMPTION AND PRICING OF SHARES		102
Purchase and Redemption		102
Offering Price		105
TAXATION		107
CONTROL PERSONS AND PRINCIPAL SHAREHOLDERS		122
LEGAL PROCEEDINGS		124
APPENDIX A — DESCRIPTIONS OF SECURITIES RATINGS		A-1
APPENDIX B — PROXY VOTING POLICIES AND PROCEDURES		B-1

SAI PRIMER

The SAI is a part of the Funds’ registration statement that is filed with the SEC. The registration statement includes the Funds’ prospectuses, the SAI and certain exhibits. The SAI, and any supplements to it, can be found online at www.columbiafunds.com, or by accessing the SEC’s website at www.sec.gov.

The SAI generally provides additional information about the Funds that is not required to be in the Funds’ prospectuses. The SAI expands discussions of certain matters described in the Funds’ prospectuses and provides certain additional information about the Funds that may be of interest to some investors. Among other things, the SAI provides information about:

•

the organization of the Trust;

•

the Funds’ investments;

•

the Funds’ investment adviser, investment subadviser(s) (if any) and other service providers, including roles and relationships of Ameriprise Financial and its affiliates, and conflicts of interest;

•

the governance of the Funds;

•

the Funds’ brokerage practices;

•

the share classes offered by the Funds;

•

the purchase, redemption and pricing of Fund shares; and

•

the application of U.S. federal income tax laws.

Investors may find this information important and helpful. If you have any questions about the Funds, please call Columbia Funds at 800.345.6611 or contact your financial adviser.

Before reading the SAI, you should consult the Glossary below, which defines certain of the terms used in the SAI.

Glossary


1933 Act		Securities Act of 1933, as amended

1934 Act		Securities Exchange Act of 1934, as amended

1940 Act		Investment Company Act of 1940, as amended

Administrative Services Agreement		The administrative services agreement between the Trust, on behalf of the Funds, and the Administrator

Administrator		Columbia Management Investment Advisers, LLC

Adviser		Columbia Management Investment Advisers, LLC

Ameriprise Financial		Ameriprise Financial, Inc.

BANA		Bank of America, National Association

Bank of America		Bank of America Corporation

BFDS/DST		Boston Financial Data Services, Inc./DST Systems, Inc.

Board		The Trust’s Board of Trustees

Brandes		Brandes Investment Partners, L.P.

CMOs		Collateralized mortgage obligations


Code		Internal Revenue Code of 1986, as amended

Codes of Ethics		The codes of ethics adopted by the Board pursuant to Rule 17j-1 under the 1940 Act

Columbia Funds Complex		The mutual fund complex that is comprised of the open-end investment management companies advised by the Adviser or its affiliates and principally underwritten by Columbia Management Investment Distributors, Inc., including funds using the RiverSource, Threadneedle and Seligman brands and funds using the Columbia brand

Columbia Funds or Columbia Funds Family		The funds within the Columbia Funds Complex using the Columbia brand

Custodian or State Street		State Street Bank and Trust Company

Distribution Agreement		The distribution agreement between the Trust, on behalf of the Funds, and the Distributor

Distribution Plan(s)		One or more of the plans adopted by the Board pursuant to Rule 12b-1 under the 1940 Act for the distribution of the Funds’ shares

Distributor		Columbia Management Investment Distributors, Inc.

FHLMC		The Federal Home Loan Mortgage Corporation

FDIC		Federal Deposit Insurance Corporation

Fitch		Fitch, Inc.

FNMA		Federal National Mortgage Association

The Fund(s) or a Fund		One or more of the open-end management investment companies listed on the front cover of this SAI that are series of the Trust

GNMA		Government National Mortgage Association

High Income Fund		Columbia High Income Fund

Independent Trustees		The Trustees of the Board who are not “interested persons” (as defined in the 1940 Act) of the Funds

Interested Trustee		A Trustee of the Board who is an “interested person” (as defined in the 1940 Act) of the Funds

Investment Management Services Agreement		The investment management services agreement between the Trust, on behalf of the Funds, and the Adviser

IRS		United States Internal Revenue Service

LIBOR		London Interbank Offered Rate

MacKay Shields		MacKay Shields LLC, the investment subadviser to High Income Fund

Marsico		Marsico Capital Management, LLC

Moody’s		Moody’s Investors Service, Inc.

NASDAQ		National Association of Securities Dealers Automated Quotations system

NRSRO		Nationally recognized statistical ratings organization (such as Moody’s, Fitch or S&P)

NSCC		National Securities Clearing Corporation


NYSE		New York Stock Exchange

Previous Administrator		Columbia Management Advisors, LLC

Previous Adviser		Columbia Management Advisors, LLC

Previous Distributor		Columbia Management Distributors, LLC

Previous Transfer Agent		Columbia Management Services, Inc.

REIT		Real estate investment trust

REMIC		Real estate mortgage investment conduit

RIC		A “regulated investment company,” as such term is used in the Internal Revenue Code of 1986, as amended

S&P		Standard & Poor’s, a division of McGraw-Hill Companies (“Standard & Poor’s” and “S&P” are trademarks of The McGraw-Hill Companies, Inc. and have been licensed for use by the Adviser. The Columbia Funds are not sponsored, endorsed, sold or promoted by Standard & Poor’s and Standard & Poor’s makes no representation regarding the advisability of investing in the Columbia Funds)

SAI		This Statement of Additional Information

SEC		United States Securities and Exchange Commission

Selling Agent(s)		One or more of the banks, broker/dealers or other financial institutions that have entered into a sales support agreement with the Distributor

Servicing Agent(s)		One or more of the banks, broker/dealers or other financial institutions that have entered into a shareholder servicing agreement with the Distributor

Short Term Bond Fund		Columbia Short Term Bond Fund

Short Term Municipal Bond Fund		Columbia Short Term Municipal Bond Fund

Total Return Bond Fund		Columbia Total Return Bond Fund

Transfer Agency Agreement		The transfer agency agreement between the Trust, on behalf of the Funds, and Columbia Management Investment Services Corp.



Transfer Agent		Columbia Management Investment Services Corp.

The Trust or CFST		Columbia Funds Series Trust, the registered investment company in the Columbia Funds Family to which this SAI relates

Trustee(s)		One or more of the Board’s Trustees

ABOUT THE TRUST

The Trust is a registered investment company under the 1940 Act within the Columbia Funds Family. Columbia Funds currently include more than 100 Columbia Fund mutual funds in major asset classes, and the Adviser had approximate assets under management of $[ ] billion as of June 30, 2010.

The Trust was organized as a Delaware business trust, a form of entity now known as a statutory trust, on October 22, 1999. On September 26, 2005, the Trust changed its name from Nations Funds Trust to Columbia Funds Series Trust.

On September 26, 2005, the names of certain of the Funds were changed as follows: Nations Short-Term Income Fund to Columbia Short Term Bond Fund, Nations Short-Term Municipal Income Fund to Columbia Short Term Municipal Bond Fund, Nations Bond Fund to Columbia Total Return Bond Fund and Nations High Yield Bond Fund to Columbia High Income Fund.

On February 28, 2008, High Income Fund converted from a feeder fund in a master/feeder structure to a stand-alone fund.

Each of the Funds represents a separate series of the Trust and is an open-end diversified management investment company. Each of the Funds has a fiscal year end of March 31 ^st .

ABOUT THE FUNDS’ INVESTMENTS

The investment objective, principal investment strategies (i.e., as used in this SAI and the corresponding prospectuses, a strategy which generally involves the ability to invest 10% or more of a Fund’s total assets) and related principal risks for each Fund are discussed in each Fund’s prospectuses.

Certain Investment Activity Limits

The overall investment and other activities of the Adviser and its affiliates may limit the investment opportunities for each Fund in certain markets where limitations are imposed by regulators upon the amount of investment by affiliated investors, in the aggregate or in individual issuers. From time to time, each Fund’s activities also may be restricted because of regulatory restrictions applicable to the Adviser and its affiliates and/or because of their internal policies. See Investment Advisory and Other Services – Other Roles and Relationships of Ameriprise Financial and its Affiliates – Certain Conflicts of Interest .

Fundamental and Non-Fundamental Investment Policies

The following discussion of “fundamental” and “non-fundamental” investment policies and limitations for each Fund supplements the discussion of investment policies in the Funds’ prospectuses. A fundamental policy may be changed only with Board and shareholder approval. A non-fundamental policy may be changed by the Board and does not require shareholder approval, but may require notice to shareholders in certain instances.

Unless otherwise noted, whenever an investment policy or limitation states a maximum percentage of a Fund’s assets that may be invested in any security or other asset, or sets forth a policy regarding an investment standard, compliance with such percentage limitation or standard will be determined solely at the time of the Fund’s acquisition of such security or asset. Borrowings and other instruments that may give rise to leverage and the restriction on investing in illiquid securities are monitored on an ongoing basis.

Fundamental Investment Policies

The 1940 Act provides that a “vote of a majority of the outstanding voting securities” of a Fund means the affirmative vote of the lesser of (1) more than 50% of the outstanding shares of a Fund, or (2) 67% or more of the shares present at a meeting if more than 50% of the outstanding shares are represented at the meeting in person or by proxy. The following fundamental investment policies cannot be changed without such a vote.

A Fund may not, as a matter of fundamental policy:

Underwrite any issue of securities within the meaning of the 1933 Act except when it might technically be deemed to be an underwriter either: (i) in connection with the disposition of a portfolio security; or (ii) in connection with the purchase of securities directly from the issuer thereof in accordance with its investment objective. This restriction shall not limit the Fund’s ability to invest in securities issued by other registered management investment companies;

2.	Purchase or sell real estate, except each Fund may purchase securities of issuers which deal or invest in real estate and may purchase securities which are secured by real estate or interests in real estate;

Purchase or sell commodities, except that each Fund may, to the extent consistent with its investment objective, invest in securities of companies that purchase or sell commodities or which invest in such programs, and purchase and sell options, forward contracts, futures contracts, and options on futures contracts. This limitation does not apply to foreign currency transactions, including, without limitation, forward currency contracts;

4.	Purchase any securities which would cause 25% or more of the value of its total assets at the time of purchase to be invested in the securities of one or more issuers conducting their principal business activities

in the same industry, provided that: (i) there is no limitation with respect to obligations issued or guaranteed by the U.S. Government, any state or territory of the United States, or any of their agencies, instrumentalities or political subdivisions; and (ii) notwithstanding this limitation or any other fundamental investment limitation, assets may be invested in the securities of one or more management investment companies to the extent permitted by the 1940 Act, the rules and regulations thereunder and any exemptive relief obtained by the Funds;

5.	Make loans, except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any exemptive relief obtained by the Funds;

6.	Borrow money or issue senior securities except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any exemptive relief obtained by the Funds; and

Purchase securities (except securities issued or guaranteed by the U.S. Government, its agencies or instrumentalities) of any one issuer if, as a result, more than 5% of its total assets will be invested in the securities of such issuer or it would own more than 10% of the voting securities of such issuer, except that: (i) up to 25% of its total assets may be invested without regard to these limitations; and (ii) a Fund’s assets may be invested in the securities of one or more management investment companies to the extent permitted by the 1940 Act, the rules and regulations thereunder and any exemptive relief obtained by the Funds.

Under normal circumstances, Short Term Municipal Bond Fund will invest at least 80% of its assets in securities that pay interest exempt from federal income tax, other than the federal alternative minimum tax.

Non-Fundamental Investment Policies

The Funds may not purchase securities of other investment companies except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief. If shares of a Fund are purchased by another fund in reliance on Section 12(d)(1)(G) of the 1940 Act, for so long as shares of the Fund are held by such fund, the Fund will not purchase securities of a registered open-end investment company or registered unit investment trust in reliance on Section 12(d)(1)(F) or Section 12(d)(1)(G) of the 1940 Act.

Each Fund may not invest more than 15% of its net assets in illiquid securities.

The Funds may not sell securities short, except as permitted by the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief.

To the extent a Fund is subject to Rule 35d-1 under the 1940 Act (the Names Rule), and does not otherwise have a fundamental investment policy in place to comply with the Names Rule, it has adopted the following non-fundamental policy: Shareholders will receive at least 60 days’ notice of any change to a Fund’s investment objective or principal investment strategies made in order to comply with the Names Rule. The notice will be provided in plain English in a separate written document, and will contain the following prominent statement or similar statement in bold-face type: “Important Notice Regarding Change in Investment Policy.” This statement will appear on both the notice and the envelope in which it is delivered, unless it is delivered separately from other communications to investors, in which case the statement will appear either on the notice or the envelope in which the notice is delivered.

Exemptive Orders

In addition to the policies outlined above, the Columbia Funds Family has received the following exemptive orders from the SEC which enable the Funds to participate in certain transactions beyond the investment limitations described above or described in otherwise applicable restrictions:

1.	Pursuant to an exemptive order dated October 5, 1993, all current and future Funds advised by the Adviser may, subject to certain conditions, pool their uninvested cash balances in one or more joint accounts and use

the daily balance of such accounts to enter into repurchase agreements, including the condition that such agreements have a maturity of not more than seven days.

Pursuant to an exemptive order dated September 5, 2003, each Fund may, subject to certain conditions, borrow money from other Funds in the Columbia Funds Family for temporary emergency purposes in order to facilitate redemption requests, or for other purposes consistent with Fund investment policies and restrictions. All loans are set at an interest rate between the rates charged on overnight repurchase agreements and short-term bank loans.

Permissible Investments and Related Risks

Each Fund’s prospectuses identify and summarize the individual types of securities in which the Fund invests as part of its principal investment strategies and the principal risks associated with such investments.

The table below identifies for each Fund certain types of securities in which it is permitted to invest, including certain types of securities that are described in each Fund’s prospectuses. A Fund generally has the ability to invest 10% or more of its total assets in each type of security described in its prospectuses (and in each sub-category of such security type described in this SAI). To the extent that a type of security identified below for a Fund is not described in a Fund’s prospectuses (or as a sub-category of such security type in this SAI), the Fund generally invests less than 10% of the Fund’s total assets in such security type.

Information about individual types of securities (including certain of their associated risks) in which some or all of the Funds may invest is set forth below. Each Fund’s investment in these types of securities is subject to its investment objective and fundamental and non-fundamental investment policies.

Temporary Defensive Positions. A Fund may temporarily invest in money market instruments or hold cash. It may do so without limit, when the Adviser or a Fund’s subadviser, if applicable: (i) believes that the market conditions are not favorable for profitable investing; (ii) is unable to locate favorable investment opportunities; or (iii) determines that a temporary defensive position is advisable or necessary in order to meet anticipated redemption requests, or for other reasons. While a Fund engages in such strategies, it may not achieve its investment objective. See also About the Funds’ Investments – Permissible Investments and Related Risks – Money Market Instruments .

Permissible Fund Investments

Investment Type

Corporate Bond
Portfolio

Mortgage-
and Asset-
Backed
Portfolio

Short Term
Bond Fund

Total
Return
Bond Fund

Short Term
Municipal
Bond Fund

High
Income
Fund

Asset-Backed Securities

Bank Obligations (Domestic and Foreign)

Common Stock

Convertible Securities

Corporate Debt Securities

Derivatives

Index or Linked Securities (Structured Products)

Futures Contracts and Options on Futures Contracts

Stock Options and Stock Index Options

Swap Agreements

Dollar Rolls

Foreign Currency Transactions

Foreign Securities

Guaranteed Investment Contracts (Funding Agreements)

Illiquid Securities

Initial Public Offerings

Investments in Other Investment Companies

Low and Below Investment Grade Securities

Money Market Instruments

Mortgage-Backed Securities

Municipal Securities

Participation Interests

Preferred Stock

Private Placement and Other Restricted Securities

Real Estate Investment Trusts and Master Limited Partnerships

Repurchase Agreements

Reverse Repurchase Agreements

Stripped Securities

U.S. Government and Related Obligations

Variable- and Floating-Rate Obligations

Warrants and Rights

When-Issued, Delayed Delivery and Forward Commitment Transactions

Zero-Coupon, Pay-in-Kind and Step-Coupon Securities

Asset-Backed Securities

Asset-backed securities represent interests in, or debt instruments that are backed by, pools of various types of assets that generate cash payments generally over fixed periods of time. Such securities entitle the security holders to receive distributions that are tied to the payments made on the underlying assets (less fees paid to the originator, servicer, or other parties, and fees paid for credit enhancement), so that the payments made on the underlying assets effectively pass through to such security holders. Asset-backed securities typically are created by an originator of loans or owner of accounts receivable that sells such underlying assets to a special purpose entity in a process called a securitization. The special purpose entity issues securities that are backed by the payments on the underlying assets, and have a minimum denomination and specific term. Asset-backed securities may be structured as fixed-, variable- or floating-rate obligations or as zero-coupon, pay-in-kind and step-coupon securities and may be privately placed or publicly offered. See Permissible Fund Investments – Variable- and Floating-Rate Obligations, Permissible Fund Investments – Zero-Coupon, Pay-in-Kind and Step-Coupon Securities and Permissible Fund Investments – Private Placement and Other Restricted Securities for more information.

Investing in asset-backed securities is subject to certain risks. For example, the value of asset-backed securities may be affected by, among other factors, changes in: interest rates, the market’s assessment of the quality of underlying assets, the creditworthiness of the servicer for the underlying assets, information concerning the originator of the underlying assets, or the creditworthiness or rating of the entities that provide any supporting letters of credit, surety bonds, derivative instruments, or other credit enhancement. The value of asset-backed securities also will be affected by the exhaustion, termination or expiration of any credit enhancement.

Declining or low interest rates may lead to a more rapid rate of repayment on the underlying assets, resulting in accelerated payments on asset-backed securities that then would be reinvested at a lesser rate of interest. Rising or high interest rates tend to lead to a slower rate of repayment on the underlying assets, resulting in slower than expected payments on asset-backed securities that can, in turn, lead to a decline in value. The impact of changing interest rates on the value of asset-backed securities may be difficult to predict and result in greater volatility. Holders of asset-backed securities generally have no recourse against the originator of the underlying assets in the event of a default on the underlying assets. Credit risk reflects the risk that a holder of asset-backed securities, backed by pools of receivables such as mortgage loans, may not receive all or part of its principal because the issuer, any credit enhancer and/or an underlying obligor has defaulted on its obligations. Credit risk is increased for asset-backed securities that are subordinated to another security (i.e., if the holder of an asset-backed security is entitled to receive payments only after payment obligations to holders of the other security are satisfied). The more deeply subordinated the security, the greater the credit risk associated with the security will be.

Bank Obligations (Domestic and Foreign)

Bank obligations include certificates of deposit, bankers’ acceptances, time deposits and promissory notes that earn a specified rate of return and may be issued by (i) a domestic branch of a domestic bank, (ii) a foreign branch of a domestic bank, (iii) a domestic branch of a foreign bank or (iv) a foreign branch of a foreign bank. Bank obligations may be structured as fixed-, variable- or floating-rate obligations. See Permissible Fund Investments – Variable- and Floating-Rate Obligations for more information.

Rate or LIBOR. A time deposit can be either a savings account or CD that is an obligation of a financial institution for a fixed term. Typically, there are penalties for early withdrawals of time deposits. Promissory notes are written commitments of the maker to pay the payee a specified sum of money either on demand or at a fixed or determinable future date, with or without interest.

Bank investment contracts are issued by banks. Pursuant to such contracts, a Fund may make cash contributions to a deposit fund of a bank. The bank then credits to the Fund payments at floating or fixed interest rates. A Fund also may hold funds on deposit with its custodian for temporary purposes.

Investing in bank obligations is subject to certain risks. Certain bank obligations, such as some CDs, are insured by the FDIC up to certain specified limits. Many other bank obligations, however, are neither guaranteed nor insured by the FDIC or the U.S. Government. These bank obligations are “backed” only by the creditworthiness of the issuing bank or parent financial institution. Domestic and foreign banks are subject to different governmental regulation. Accordingly, certain obligations of foreign banks, including Eurodollar and Yankee dollar obligations, involve different investment risks than those affecting obligations of domestic banks, including, among others, the possibilities that: (i) their liquidity could be impaired because of political or economic developments; (ii) the obligations may be less marketable than comparable obligations of domestic banks; (iii) a foreign jurisdiction might impose withholding and other taxes at high levels on interest income; (iv) foreign deposits may be seized or nationalized; (v) foreign governmental restrictions such as exchange controls may be imposed, which could adversely affect the payment of principal or interest on those obligations; (vi) there may be less publicly available information concerning foreign banks issuing the obligations; and (vii) the reserve requirements and accounting, auditing and financial reporting standards, practices and requirements applicable to foreign banks may differ from those applicable to domestic banks. Foreign banks generally are not subject to examination by any U.S. Government agency or instrumentality.

Common Stock

Common stock represents a unit of equity ownership of a corporation. Owners typically are entitled to vote on the selection of directors and other important corporate governance matters, and to receive dividend payments, if any, on their holdings. However, ownership of common stock does not entitle owners to participate in the day-to-day operations of the corporation. Common stocks of domestic and foreign public corporations can be listed, and their shares traded, on domestic stock exchanges, such as the NYSE or the NASDAQ Stock Market. Domestic and foreign corporations also may have their shares traded on foreign exchanges, such as the London Stock Exchange or Tokyo Stock Exchange. Common stock may be privately placed or publicly offered. See Permissible Fund Investments – Private Placement and Other Restricted Securities for more information.

Investing in common stocks is subject to certain risks. Stock market risk, for example, is the risk that the value of such stocks, like the broader stock markets, may decline over short or even extended periods of time, perhaps substantially or unexpectedly. Domestic and foreign stock markets tend to be cyclical, with periods when stock prices generally rise and periods when stock prices generally decline. The value of individual stocks will rise and fall based on factors specific to each company, such as changes in earnings or management, as well as general economic and market factors.

If a corporation is liquidated, the claims of secured and unsecured creditors and owners of debt securities and “preferred” stock take priority over the claims of those who own common stock.

Investing in common stocks also poses risks applicable to the particular type of company issuing the common stock. For example, stocks of smaller companies tend to have greater price swings than stocks of larger companies because, among other things, they trade less frequently and in lower volumes, are more susceptible to changes in economic conditions, may be more reliant on singular products or services and are more vulnerable to larger competitors. Common stocks of these types of companies may have a higher potential for gains, but also may be subject to greater risk of loss.

Investing in common stocks also poses risks applicable to a particular industry, such as technology, financial services, consumer goods or natural resources (e.g., oil and gas). To some extent, the prices of common stocks tend to move by industry sector. When market conditions favorably affect, or are expected to favorably affect, an industry, the share prices of the common stocks of companies in that industry tend to rise. Conversely, negative news or a poor outlook for a particular industry can cause the share prices of the common stocks of companies in that industry to decline quickly.

Convertible Securities

Convertible securities include bonds, debentures, notes, preferred stocks or other securities that may be converted or exchanged (by the holder or by the issuer) into shares of the underlying common stock (or cash or securities of equivalent value) at a stated exchange ratio or predetermined price (the conversion price). As such, convertible securities combine the investment characteristics of debt securities and equity securities. A holder of convertible securities is entitled to receive the income of a bond, debenture or note or the dividend of a preferred stock until the conversion privilege is exercised. The market value of convertible securities generally is a function of, among other factors, interest rates, the rates of return of similar nonconvertible securities and the financial strength of the issuer. The market value of convertible securities tends to decline as interest rates rise and, conversely, to rise as interest rates decline. However, a convertible security’s market value tends to reflect the market price of the common stock of the issuing company when that stock price approaches or is greater than its conversion price. As the market price of the underlying common stock declines, the price of the convertible security tends to be influenced more by the rate of return of the convertible security. Because both interest rate and market movements can influence their value, convertible securities generally are not as sensitive to changes in interest rates as similar debt securities nor generally are they as sensitive to changes in share price as their underlying common stock. Convertible securities may be structured as fixed-, variable- or floating-rate obligations or as zero-coupon, pay-in-kind and step-coupon securities and may be privately placed or publicly offered. See Permissible Fund Investments – Variable- and Floating-Rate Obligations, Permissible Fund Investments – Zero-Coupon, Pay-in-Kind and Step-Coupon Securities and Permissible Fund Investments – Private Placement and Other Restricted Securities for more information.

Investing in convertible securities is subject to certain risks. Certain convertible securities, particularly securities that are convertible into securities of an issuer other than the issuer of the convertible security, may be illiquid and, therefore, may be more difficult to resell in a timely fashion or for a fair price, which could result in investment losses. Certain convertible securities may have a mandatory conversion feature, pursuant to which the securities convert automatically into common stock or other equity securities (of the same or a different issuer) at a specified date and a specified exchange ratio. Certain convertible securities may be convertible at the option of the issuer, which may require a holder to convert the security into the underlying common stock, even at times when the value of the underlying common stock or other equity security has declined substantially.

In addition, some convertible securities may be rated below investment grade or may not be rated and, therefore, may be considered speculative investments. Companies that issue convertible securities frequently are small- and mid-capitalization companies and, accordingly, carry the risks associated with such companies. In addition, the credit rating of a company’s convertible securities generally is lower than that of its conventional debt securities. Convertible securities are senior to equity securities and have a claim to the assets of an issuer prior to the holders of the issuer’s common stock in the event of liquidation but generally are subordinate to similar non-convertible debt securities of the same issuer. Some convertible securities are particularly sensitive to changes in interest rates when their predetermined conversion price is much higher than the price for the issuing company’s common stock.

Corporate Debt Securities

primary difference being their interest rates, maturity dates and secured or unsecured status. Commercial paper has the shortest term and usually is unsecured. The broad category of corporate debt securities includes debt issued by domestic or foreign companies of all kinds, including those with small-, mid- and large-capitalizations. The category also includes bank loans, as well as assignments, participations and other interests in bank loans. Corporate debt securities may be rated investment grade or below investment grade and may be structured as fixed-, variable - or floating-rate obligations or as zero-coupon, pay-in-kind and step-coupon securities and may be privately placed or publicly offered. See Permissible Fund Investments – Variable- and Floating-Rate Obligations, Permissible Fund Investments – Zero-Coupon, Pay-in-Kind and Step-Coupon Securities and Permissible Fund Investments – Private Placement and Other Restricted Securities for more information.

Extendible commercial notes (ECNs) are very similar to commercial paper except that with ECNs, the issuer has the option to extend the notes’ maturity. ECNs are issued at a discount rate, with an initial redemption of not more than 90 days from the date of issue. If ECNs are not redeemed by the issuer on the initial redemption date, the issuer will pay a premium (step-up) rate based on the ECN’s credit rating at the time.

Because of the wide range of types and maturities of corporate debt securities, as well as the range of creditworthiness of issuers, corporate debt securities can have widely varying risk/return profiles. For example, commercial paper issued by a large established domestic corporation that is rated by an NRSRO as investment grade may have a relatively modest return on principal but present relatively limited risk. On the other hand, a long-term corporate note issued, for example, by a small foreign corporation from an emerging market country that has not been rated by an NRSRO may have the potential for relatively large returns on principal but carries a relatively high degree of risk.

Investing in corporate debt securities is subject to certain risks including, among others, credit and interest rate risk. Credit risk is the risk that a Fund could lose money if the issuer of a corporate debt security is unable to pay interest or repay principal when it becomes due. Some corporate debt securities that are rated below investment grade by an NRSRO generally are considered speculative because they present a greater risk of loss, including default, than higher quality debt securities. The credit risk of a particular issuer’s debt security may vary based on its priority for repayment. For example, higher ranking (senior) debt securities have a higher priority than and, therefore, may be paid in full before, lower ranking (subordinated) securities. In addition, in the event of bankruptcy, holders of higher-ranking senior securities may receive amounts otherwise payable to the holders of more junior securities. Interest rate risk is the risk that the value of certain corporate debt securities will tend to fall when interest rates rise. In general, corporate debt securities with longer terms tend to fall more in value when interest rates rise than do corporate debt securities with shorter terms.

Derivatives

General

Derivatives are financial instruments whose values are based on (or “derived” from) traditional securities (such as a stock or a bond), assets (such as a commodity, like gold), reference rates (such as LIBOR) or market indices (such as the S&P 500 ^® Index). Some forms of derivatives, such as exchange-traded futures and options on securities, commodities, or indices, are traded on regulated exchanges. These types of derivatives are standardized contracts that can easily be bought and sold, and whose market values are determined and published daily. Non-standardized derivatives, on the other hand, tend to be more specialized or complex, and may be harder to value. Derivatives afford leverage and, when used properly, can enhance returns and be useful in hedging portfolios. Some common types of derivatives include futures; options; options on futures; forward foreign currency exchange contracts; forward contracts on securities and securities indices; linked securities and structured products; CMOs; stripped securities; warrants; swap agreements and swaptions.

its unrealized gains reflected in the value of its portfolio securities; (iv) to facilitate the sale of such securities for investment purposes; (v) to reduce transaction costs; and/or (vi) to manage the effective maturity or duration of its portfolio.

A Fund’s use of derivatives presents risks different from, and possibly greater than, the risks associated with investing directly in traditional securities. The use of derivatives can lead to losses because of adverse movements in the price or value of the underlying security, asset, index or reference rate, which may be magnified by certain features of the derivatives. These risks are heightened when a Fund uses derivatives to enhance its return or as a substitute for a position or security, rather than solely to hedge or offset the risk of a position or security held by a Fund. There is also a risk that the derivative will not correlate well with the security for which it is substituting. A Fund’s use of derivatives to leverage risk also may exaggerate a loss, potentially causing a Fund to lose more money than if it had invested in the underlying security, or limit a potential gain. The success of management’s derivative strategies will depend on its ability to assess and predict the impact of market or economic developments on the underlying security, asset, index or reference rate and the derivative itself, without necessarily the benefit of observing the performance of the derivative under all possible market conditions. Other risks arise from a Fund’s potential inability to terminate or sell its derivative positions as a liquid secondary market for such positions may not exist at times when a Fund may wish to terminate or sell them. Over-the-counter instruments (investments not traded on an exchange) may be illiquid. Derivatives traded in the over-the-counter market are subject to the risk that the other party will not meet its obligations. Also, with some derivative strategies there is the risk that a Fund may not be able to find a suitable derivative transaction counterparty, and thus may be unable to invest in derivatives altogether. The use of derivatives may also increase the amount and accelerate the timing of taxes payable by shareholders.

A Fund may use any or all of the above investment techniques and may purchase different types of derivative instruments at any time and in any combination. There is no particular strategy that dictates the use of one technique over another, as the use of derivatives is a function of numerous variables, including market conditions.

Index or Linked Securities (Structured Products)

General. Indexed or linked securities, also often referred to as “structured products,” are instruments that may have varying combinations of equity and debt characteristics. These instruments are structured to recast the investment characteristics of the underlying security or reference asset. If the issuer is a unit investment trust or other special purpose vehicle, the structuring will typically involve the deposit with or purchase by such issuer of specified instruments (such as commercial bank loans or securities) and/or the execution of various derivative transactions, and the issuance by that entity of one or more classes of securities (structured securities) backed by, or representing interests in, the underlying instruments. The cash flow on the underlying instruments may be apportioned among the newly issued structured securities to create securities with different investment characteristics, such as varying maturities, payment priorities and interest rate provisions, and the extent of such payments made with respect to structured securities is dependent on the extent of the cash flow on the underlying instruments.

Indexed and Inverse Floating Rate Securities . A Fund may invest in securities that provide a potential return based on a particular index of value or interest rates. For example, a Fund may invest in securities that pay interest based on an index of interest rates. The principal amount payable upon maturity of certain securities also may be based on the value of the index. To the extent a Fund invests in these types of securities, a Fund’s return on such securities will rise and fall with the value of the particular index: that is, if the value of the index falls, the value of the indexed securities owned by a Fund will fall. Interest and principal payable on certain securities may also be based on relative changes among particular indices.

or by reference to a short-term tax-exempt interest rate index). A Fund may purchase synthetically-created inverse floating rate bonds evidenced by custodial or trust receipts. Generally, income on inverse floating rate bonds will decrease when interest rates increase, and will increase when interest rates decrease. Such securities have the effect of providing a degree of investment leverage, since they may increase or decrease in value in response to changes, as an illustration, in market interest rates at a rate that is a multiple of the rate at which fixed-rate securities increase or decrease in response to such changes. As a result, the market values of such securities will generally be more volatile than the market values of fixed-rate securities. To seek to limit the volatility of these securities, a Fund may purchase inverse floating obligations that have shorter-term maturities or that contain limitations on the extent to which the interest rate may vary. Certain investments in such obligations may be illiquid. A Fund may invest in indexed and inverse securities for hedging purposes or to seek to increase returns. When used for hedging purposes, indexed and inverse securities involve correlation risk. Furthermore, where such a security includes a contingent liability, in the event of an adverse movement in the underlying index or interest rate, a Fund may be required to pay substantial additional margin to maintain the position.

Credit Linked Securities . Among the income producing securities in which a Fund may invest are credit linked securities. The issuers of these securities frequently are limited purpose trusts or other special purpose vehicles that, in turn, invest in a derivative instrument or basket of derivative instruments, such as credit default swaps, interest rate swaps and other securities, in order to provide exposure to certain fixed income markets. For instance, a Fund may invest in credit linked securities as a cash management tool in order to gain exposure to a certain market and/or to remain fully invested when more traditional income producing securities are not available.

Like an investment in a bond, investments in these credit linked securities represent the right to receive periodic income payments (in the form of distributions) and payment of principal at the end of the term of the security. However, these payments are conditioned on or linked to the issuer’s receipt of payments from, and the issuer’s potential obligations to, the counterparties to the derivative instruments and other securities in which the issuer invests. For instance, the issuer may sell one or more credit default swaps, under which the issuer would receive a stream of payments over the term of the swap agreements provided that no event of default has occurred with respect to the referenced debt obligation upon which the swap is based. If a default occurs, the stream of payments may stop and the issuer would be obligated to pay the counterparty the par (or other agreed upon value) of the referenced debt obligation. This, in turn, would reduce the amount of income and/or principal that a Fund would receive. A Fund’s investments in these instruments are indirectly subject to the risks associated with derivative instruments, including, among others, credit risk, default or similar event risk, counterparty risk, interest rate risk, leverage risk and management risk. These securities generally are exempt from registration under the 1933 Act. Accordingly, there may be no established trading market for the securities and they may constitute illiquid investments.

Index-, Commodity-, Currency- and Equity-Linked Securities . “Index-linked” or “commodity-linked” notes are debt securities of companies that call for interest payments and/or payment at maturity in different terms than the typical note where the borrower agrees to make fixed interest payments and to pay a fixed sum at maturity. Principal and/or interest payments on an index-linked or commodity-linked note depend on the performance of one or more market indices, such as the S&P 500 ^® Index, a weighted index of commodity futures such as crude oil, gasoline and natural gas or the market prices of a particular commodity or basket of commodities. Equity-linked securities are short-term or intermediate term instruments having a value at maturity, and /or an interest rate, determined by reference to the market prices of one or more equity securities. At maturity, the principal amount of an equity-linked debt security is often exchanged for common stock of the issuer or is payable in an amount based on the issuer’s common stock price at the time of maturity. Currency-linked debt securities are short-term or intermediate-term instruments having a value at maturity, and/or an interest rate, determined by reference to one or more foreign currencies. Payment of principal or periodic interest may be calculated as a multiple of the movement of one currency against another currency, or against an index.

Index, commodity, currency and equity-linked securities may entail substantial risks. Such instruments may be subject to significant price volatility. The company issuing the instrument may fail to pay the amount due on maturity. The underlying investment or security may not perform as expected by the Adviser. Markets, underlying securities and indexes may move in a direction that was not anticipated by the Adviser. Performance of the derivatives may be influenced by interest rate and other market changes in the United States and abroad, and certain derivative instruments may be illiquid.

Linked securities are often issued by unit investment trusts. Examples of this include such index-linked securities as S&P Depositary Receipts (SPDRs), which is an interest in a unit investment trust holding a portfolio of securities linked to the S&P 500 ^® Index, and a type of exchange-traded fund (ETF). Because a unit investment trust is an investment company under the 1940 Act, a Fund’s investments in SPDRs are subject to the limitations set forth in Section 12(d)(1)(A) of the 1940 Act. SPDRs closely track the underlying portfolio of securities, trade like a share of common stock and pay periodic dividends proportionate to those paid by the portfolio of stocks that comprise the S&P 500 ^® Index. As a holder of interests in a unit investment trust, a Fund would indirectly bear its ratable share of that unit investment trust’s expenses. At the same time, a Fund would continue to pay its own management and advisory fees and other expenses, as a result of which a Fund and its shareholders in effect would be absorbing levels of fees with respect to investments in such unit investment trusts.

Equity-linked securities include issues such as Structured Yield Product Exchangeable for Stock (STRYPES), Trust Automatic Common Exchange Securities (TRACES), Trust Issued Mandatory Exchange Securities (TIMES), and Trust Enhanced Dividend Securities (TRENDS). The issuers of these equity-linked securities generally purchase and hold a portfolio of stripped U.S. Treasury securities maturing on a quarterly basis through the conversion date, and a forward purchase contract with an existing shareholder of the company relating to the common stock. Quarterly distributions on such equity-linked securities generally consist of the cash received from the U.S. Treasury securities and such equity-linked securities generally are not entitled to any dividends that may be declared on the common stock.

Investing in structured products and linked securities is subject to certain risks. Because structured products typically involve no credit enhancement, their credit risk generally will be equivalent to that of the underlying instruments. Investments in structured products may be structured as a class that is either subordinated or unsubordinated to the right of payment of another class. Subordinated structured products typically have higher rates of return and present greater risks than unsubordinated structured products. Structured products sometimes are sold in private placement transactions and often have a limited trading market.

Investments in “linked” securities have the potential to lead to significant losses because of unexpected movements in the underlying financial asset, index, currency or other investment. The ability of a Fund to utilize linked-securities successfully will depend on its ability correctly to predict pertinent market movements, which cannot be assured. Because currency-linked securities usually relate to foreign currencies, some of which may be currency from emerging market countries, there are certain additional risks associated with such investments.

SPDRs are subject to the risks of an investment in a broadly based portfolio of common stocks, including the risk that the general level of stock prices may decline, thereby adversely affecting the value of such investment. In addition, because individual investments in SPDRs are not redeemable, except upon termination of the unit investment trust, the liquidity of small holdings of SPDRs will depend upon the existence of a secondary market. Large holdings of SPDRs are called “creation unit size” and are redeemable in-kind only and are not redeemable for cash from the unit investment trust. The price of a SPDR is derived from and based upon the securities held by the unit investment trust. Accordingly, the level of risk involved in the purchase or sale of a SPDR is similar to the risk involved in the purchase or sale of traditional common stock, with the exception that the pricing mechanism for SPDRs is based on a basket of stocks. Disruptions in the markets for the securities underlying SPDRs purchased or sold by a Fund could result in losses on SPDRs.

Futures Contracts and Options on Futures Contracts

Futures Contracts. A futures contract sale creates an obligation by the seller to deliver the type of security or other asset called for in the contract at a specified delivery time for a stated price. A futures contract purchase creates an obligation by the purchaser to take delivery of the type of security or other asset called for in the contract at a specified delivery time for a stated price. The specific security or other asset delivered or taken at the settlement date is not determined until on or near that date. The determination is made in accordance with the rules of the exchange on which the futures contract was made. A Fund may enter into futures contracts which are traded on national or foreign futures exchanges and are standardized as to maturity date and underlying security or other asset. Futures exchanges and trading in the United States are regulated under the Commodity Exchange Act (CEA) by the Commodity Futures Trading Commission (CFTC), a U.S. Government agency.

Traders in futures contracts may be broadly classified as either “hedgers” or “speculators.” Hedgers use the futures markets primarily to offset unfavorable changes (anticipated or potential) in the value of securities or other assets currently owned or expected to be acquired by them. Speculators less often own the securities or other assets underlying the futures contracts which they trade, and generally use futures contracts with the expectation of realizing profits from fluctuations in the value of the underlying securities or other assets. Pursuant to a notice of eligibility claiming exclusion from the definition of commodity pool operator filed with the CFTC and the National Futures Association on behalf of the Funds, neither the Trust nor any of the individual Funds is deemed to be a “commodity pool operator” under the CEA, and, accordingly, they are not subject to registration or regulation as such under the CEA.

Upon entering into futures contracts, in compliance with the SEC’s requirements, cash or liquid securities, equal in value to the amount of a Fund’s obligation under the contract (less any applicable margin deposits and any assets that constitute “cover” for such obligation), will be segregated with a Fund’s custodian.

Unlike when a Fund purchases or sells a security, no price is paid or received by a Fund upon the purchase or sale of a futures contract, although a Fund is required to deposit with its custodian in a segregated account in the name of the futures broker an amount of cash and/or U.S. Government securities in order to initiate and maintain open positions in futures contracts. This amount is known as “initial margin.” The nature of initial margin in futures transactions is different from that of margin in security transactions, in that futures contract margin does not involve the borrowing of funds by a Fund to finance the transactions. Rather, initial margin is in the nature of a performance bond or good faith deposit intended to assure completion of the contract (delivery or acceptance of the underlying security or other asset) that is returned to a Fund upon termination of the futures contract, assuming all contractual obligations have been satisfied. Minimum initial margin requirements are established by the relevant futures exchange and may be changed. Brokers may establish deposit requirements which are higher than the exchange minimums. Futures contracts are customarily purchased and sold on margin which may range upward from less than 5% of the value of the contract being traded. Subsequent payments, called “variation margin,” to and from the broker (or the custodian) are made on a daily basis as the price of the underlying security or other asset fluctuates, a process known as “marking to market.” If the futures contract price changes to the extent that the margin on deposit does not satisfy margin requirements, payment of additional variation margin will be required. Conversely, a change in the contract value may reduce the required margin, resulting in a repayment of excess margin to the contract holder. Variation margin payments are made for as long as the contract remains open. A Fund expects to earn interest income on its margin deposits.

aggregate amount of the specific type of security or other asset with the same delivery date) to terminate the position. Final determinations are made as to whether the price of the initial sale of the futures contract exceeds or is below the price of the offsetting purchase, or whether the purchase price exceeds or is below the offsetting sale price. Final determinations of variation margin are then made, additional cash is required to be paid by or released to a Fund, and a Fund realizes a loss or a gain. Brokerage commissions are incurred when a futures contract is bought or sold.

Successful use of futures contracts by a Fund is subject to the Adviser’s ability to predict correctly movements in the direction of interest rates and other factors affecting securities and commodities markets. This requires different skills and techniques than those required to predict changes in the prices of individual securities. A Fund, therefore, bears the risk that future market trends will be incorrectly predicted.

The risk of loss in trading futures contracts in some strategies can be substantial, due both to the relatively low margin deposits required and the potential for an extremely high degree of leverage involved in futures contracts. As a result, a relatively small price movement in a futures contract may result in an immediate and substantial loss to the investor. For example, if at the time of purchase, 10% of the value of the futures contract is deposited as margin, a subsequent 10% decrease in the value of the futures contract would result in a total loss of the margin deposit, before any deduction for the transaction costs, if the account were then closed out. A 15% decrease would result in a loss equal to 150% of the original margin deposit if the contract were closed out. Thus, a purchase or sale of a futures contract may result in losses in excess of the amount posted as initial margin for the contract.

In the event of adverse price movements, a Fund would continue to be required to make daily cash payments in order to maintain its required margin. In such a situation, if a Fund has insufficient cash, it may have to sell portfolio securities in order to meet daily margin requirements at a time when it may be disadvantageous to do so. The inability to close the futures position also could have an adverse impact on the ability to hedge effectively.

To reduce or eliminate a hedge position held by a Fund, a Fund may seek to close out a position. The ability to establish and close out positions will be subject to the development and maintenance of a liquid secondary market. It is not certain that this market will develop or continue to exist for a particular futures contract, which may limit a Fund’s ability to realize its profits or limit its losses. Reasons for the absence of a liquid secondary market on an exchange include the following: (i) there may be insufficient trading interest in certain contracts; (ii) restrictions may be imposed by an exchange on opening transactions, closing transactions or both; (iii) trading halts, suspensions or other restrictions may be imposed with respect to particular classes or series of contracts, or underlying securities; (iv) unusual or unforeseen circumstances, such as volume in excess of trading or clearing capability, may interrupt normal operations on an exchange; (v) the facilities of an exchange or a clearing corporation may not at all times be adequate to handle current trading volume; or (vi) one or more exchanges could, for economic or other reasons, decide or be compelled at some future date to discontinue the trading of contracts (or a particular class or series of contracts), in which event the secondary market on that exchange (or in the class or series of contracts) would cease to exist, although outstanding contracts on the exchange that had been issued by a clearing corporation as a result of trades on that exchange would continue to be exercisable in accordance with their terms.

Interest Rate Futures Contracts. Bond prices are established in both the cash market and the futures market. In the cash market, bonds are purchased and sold with payment for the full purchase price of the bond being made in cash, generally within five business days after the trade. In the futures market, a contract is made to purchase or sell a bond in the future for a set price on a certain date. Historically, the prices for bonds established in the futures markets have tended to move generally in the aggregate in concert with the cash market prices and have maintained fairly predictable relationships. Accordingly, the Fund may use interest rate futures contracts as a defense, or hedge, against anticipated interest rate changes. The Fund presently could accomplish a similar result to that which it hopes to achieve through the use of interest rate futures contracts by selling bonds with

long maturities and investing in bonds with short maturities when interest rates are expected to increase, or conversely, selling bonds with short maturities and investing in bonds with long maturities when interest rates are expected to decline. However, because of the liquidity that is often available in the futures market, the protection is more likely to be achieved, perhaps at a lower cost and without changing the rate of interest being earned by the Fund, through using futures contracts.

Interest rate futures contracts are traded in an auction environment on the floors of several exchanges – principally, the Chicago Board of Trade, the Chicago Mercantile Exchange and the New York Futures Exchange. Each exchange guarantees performance under contract provisions through a clearing corporation, a nonprofit organization managed by the exchange membership. A public market exists in futures contracts covering various financial instruments including long-term U.S. Treasury Bonds and Notes; GNMA modified pass-through mortgage backed securities; three-month U.S. Treasury Bills; and ninety-day commercial paper. A Fund may also invest in exchange-traded Eurodollar contracts, which are interest rate futures on the forward level of LIBOR. These contracts are generally considered liquid securities and trade on the Chicago Mercantile Exchange. Such Eurodollar contracts are generally used to “lock-in” or hedge the future level of short-term rates. A Fund may trade in any interest rate futures contracts for which there exists a public market, including, without limitation, the foregoing instruments.

Index Futures Contracts . An index futures contract is a contract to buy or sell units of an index at a specified future date at a price agreed upon when the contract is made. Entering into a contract to buy units of an index is commonly referred to as buying or purchasing a contract or holding a long position in the index. Entering into a contract to sell units of an index is commonly referred to as selling a contract or holding a short position in the index. A unit is the current value of the index. A Fund may enter into stock index futures contracts, debt index futures contracts, or other index futures contracts appropriate to its objective(s).

There are several risks in connection with the use by a Fund of index futures as a hedging device. One risk arises because of the imperfect correlation between movements in the prices of the index futures and movements in the prices of securities which are the subject of the hedges. The Adviser will attempt to reduce this risk by selling, to the extent possible, futures on indices the movements of which will, in its judgment, have a significant correlation with movements in the prices of a Fund’s portfolio securities sought to be hedged.

Municipal Bond Index Futures Contracts . Municipal bond index futures contracts may act as a hedge against changes in market conditions. A municipal bond index assigns values daily to the municipal bonds included in the index based on the independent assessment of dealer-to-dealer municipal bond brokers. A municipal bond index futures contract represents a firm commitment by which two parties agree to take or make delivery of an amount equal to a specified dollar amount multiplied by the difference between the municipal bond index value on the last trading date of the contract and the price at which the futures contract is originally struck. No physical delivery of the underlying securities in the index is made.

Options on Futures Contracts. A Fund may purchase and write call and put options on those futures contracts that it is permitted to buy or sell. A Fund may use such options on futures contracts in lieu of writing options directly on the underlying securities or other assets or purchasing and selling the underlying futures contracts. Such options generally operate in the same manner as options purchased or written directly on the underlying investments. A futures option gives the holder, in return for the premium paid, the right to buy from (call) or sell to (put) the writer of the option a futures contract at a specified price at any time during the period of the option. Upon exercise, the writer of the option is obligated to pay the difference between the cash value of the futures contract and the exercise price. Like the buyer or seller of a futures contract, the holder or writer of an option has the right to terminate its position prior to the scheduled expiration of the option by selling or purchasing an option of the same series, at which time the person entering into the closing purchase transaction will realize a gain or loss. There is no guarantee that such closing purchase transactions can be effected.

A Fund will enter into written options on futures contracts only when, in compliance with the SEC’s requirements, cash or liquid securities equal in value to the underlying security’s or other asset’s value (less any applicable margin deposits) have been deposited in a segregated account. A Fund will be required to deposit initial margin and maintenance margin with respect to put and call options on futures contracts written by it pursuant to brokers’ requirements similar to those described above.

Investments in futures options involve some of the same risks that are involved in connection with investments in futures contracts (for example, the existence of a liquid secondary market). In addition, the purchase of an option also entails the risk that changes in the value of the underlying futures contract will not be fully reflected in the value of the option purchased. There may be circumstances when the purchase of a call or put option on a futures contract would result in a loss to a Fund when the purchase or sale of a futures contract would not, such as when there is no movement in the prices of the hedged investments. In general, the market prices of options can be expected to be more volatile than the market prices on the underlying futures contracts. Compared to the purchase or sale of futures contracts, however, the purchase of call or put options on futures contracts may frequently involve less potential risk to a Fund because the maximum amount at risk is the premium paid for the options (plus transaction costs).

Successful use of index futures by a Fund is also subject to the Adviser’s ability to predict correctly movements in the direction of the market. It is possible that, for example, where a Fund has sold futures to hedge its portfolio against a decline in the market, the index on which the futures are written may advance and the value of securities held in a Fund’s portfolio may decline. If this occurred, a Fund would lose money on the futures and also experience a decline in the value of its portfolio securities, as a Fund’s ability to effectively hedge all or a portion of the securities in its portfolio, in anticipation of or during a market decline, through transactions in futures or put options on stock indices, depends on the degree to which price movements in the underlying index correlate with the price movements of the securities held by a Fund. Inasmuch as a Fund’s securities will not duplicate the components of an index, the correlation will not be perfect. Consequently, a Fund bears the risk that the prices of its securities being hedged will not move to the same extent as do the prices of its put options on the stock indices. It is also possible that, if a Fund has hedged against the possibility of a decline in the market adversely affecting securities held in its portfolio and securities prices increase instead, a Fund will lose part or all of the benefit of the increased values of those securities that it has hedged, because it will have offsetting losses in its futures positions. In addition, in such situations, if a Fund has insufficient cash, it may have to sell securities to meet daily variation margin requirements.

In addition to the possibility that there may be an imperfect correlation, or no correlation at all, between movements in the index futures and the securities of the portfolio being hedged, the prices of index futures may not correlate perfectly with movements in the underlying index due to certain market distortions. First, all participants in the futures markets are subject to margin deposit and maintenance requirements. Rather than meeting additional margin deposit requirements, investors may close futures contracts through offsetting transactions, which would distort the normal relationship between the index and futures markets. Second, margin requirements in the futures market are less onerous than margin requirements in the securities market, and as a result, the futures market may attract more speculators than the securities market. Increased participation by speculators in the futures market may also cause temporary price distortions. Due to the possibility of price distortions in the futures market, and also because of the imperfect correlation between movements in an index and movements in the prices of index futures, even a correct forecast of general market trends by the Adviser may still not result in a successful hedging transaction.

There is also the risk of loss by a Fund of margin deposits in the event of bankruptcy of a broker with whom a Fund has an open position in a futures contract or related option. Most futures exchanges limit the amount of fluctuation permitted in some contract prices during a single trading day. The daily limit establishes the maximum amount that the price of a futures contract may vary either up or down from the previous day’s settlement price at the end of a trading session. Once the daily limit has been reached in a particular type of contract, no trades may be made on that day at a price beyond that limit. The daily limit governs only price

movement during a particular trading day and, therefore, does not limit potential losses, because the limit may prevent the liquidation of unfavorable positions. Futures contract prices have occasionally moved to the daily limit for several consecutive trading days with little or no trading, thereby preventing prompt liquidation of futures positions and subjecting some futures traders to substantial losses.

Options on Index Futures Contracts . A Fund may also purchase and sell options on index futures contracts. Options on index futures give the purchaser the right, in return for the premium paid, to assume a position in an index futures contract (a long position if the option is a call and a short position if the option is a put), at a specified exercise price at any time during the period of the option. Upon exercise of the option, the delivery of the futures position by the writer of the option to the holder of the option will be accompanied by delivery of the accumulated balance in the writer’s futures margin account, which represents the amount by which the market price of the index futures contract, at exercise, exceeds (in the case of a call) or is less than (in the case of a put) the exercise price of the option on the index future. If an option is exercised on the last trading day prior to the expiration date of the option, the settlement will be made entirely in cash equal to the difference between the exercise price of the option and the closing level of the index on which the future is based on the expiration date. Purchasers of options who fail to exercise their options prior to the exercise date suffer a loss of the premium paid.

There are various risks in connection with the use by a Fund of index futures as a hedging device. For example, a risk arises because of the imperfect correlation between movements in the prices of the index futures and movements in the prices of securities which are the subject of the hedges. The Adviser will attempt to reduce this risk by selling, to the extent possible, futures on indices the movements of which will, in its judgment, have a significant correlation with movements in the prices of a Fund’s portfolio securities sought to be hedged; there can be no assurance that the Adviser will be successful in doing so.

Use by Tax-Exempt Funds of Interest Rate and U.S. Treasury Security Futures Contracts and Options . If a Fund invests in tax-exempt securities, it may purchase and sell futures contracts and related options on interest rate and U.S. Treasury securities when, in the opinion of the Adviser, price movements in these security futures and related options will correlate closely with price movements in the tax-exempt securities which are the subject of the hedge. Interest rate and U.S. Treasury securities futures contracts require the seller to deliver, or the purchaser to take delivery of, the type of security called for in the contract at a specified date and price. Options on interest rate and U.S. Treasury security futures contracts give the purchaser the right in return for the premium paid to assume a position in a futures contract at the specified option exercise price at any time during the period of the option.

In addition to the risks generally involved in using futures contracts, there is also a risk that price movements in interest rate and U.S. Treasury security futures contracts and related options will not correlate closely with price movements in markets for tax-exempt securities.

Stock Options and Stock Index Options

A Fund may purchase and write (i.e., sell) put and call options. Such options may relate to particular stocks or stock indices, and may or may not be listed on a domestic or foreign securities exchange and may or may not be issued by the Options Clearing Corporation (OCC). Stock index options are put options and call options on various stock indices. In most respects, they are identical to listed options on common stocks.

exercise price of the option expressed in dollars times a specified multiple. A stock index fluctuates with changes in the market value of the securities included in the index. For example, some stock index options are based on a broad market index, such as the S&P 500 ^® Index or a narrower market index, such as the S&P 100 ^® Index. Indices may also be based on an industry or market segment.

The successful use of a Fund’s options strategies depends on the ability of the Adviser to forecast interest rate and market movements correctly. When it purchases an option, a Fund runs the risk that it will lose its entire investment in the option in a relatively short period of time, unless a Fund exercises the option or enters into a closing sale transaction for such option during the life of the option. If the price of the underlying security does not rise (in the case of a call) or fall (in the case of a put) to an extent sufficient to cover the option premium and transaction costs, a Fund will lose part or all of its investment in the option. This contrasts with an investment by a Fund in the underlying securities, since a Fund may continue to hold its investment in those securities notwithstanding the lack of a change in price of those securities.

The effective use of options also depends on a Fund’s ability to terminate option positions at times when the Adviser deems it desirable to do so. Although a Fund will take an option position only if the Adviser believes there is a liquid secondary market for the option, there is no assurance that a Fund will be able to effect closing transactions at any particular time or at an acceptable price.

If a secondary trading market in options were to become unavailable, a Fund could no longer engage in closing transactions. The writer in such circumstances would be subject to the risk of market decline or appreciation in the instrument during such period. If an option purchased by a Fund expires unexercised, a Fund will realize a loss equal to the premium paid. Reasons for the absence of a liquid secondary market on an exchange include the following: (i) there may be insufficient trading interest in certain options; (ii) restrictions may be imposed by an exchange on opening transactions or closing transactions or both; (iii) trading halts, suspensions or other restrictions may be imposed with respect to particular classes or series of options, or underlying securities; (iv) unusual or unforeseen circumstances, such as volume in excess of trading or clearing capability, may interrupt normal operations on an exchange; (v) the facilities of an exchange or a clearing corporation may not at all times be adequate to handle current trading volume; or (vi) one or more exchanges could, for economic or other reasons, decide or be compelled at some future date to discontinue the trading of options (or a particular class or series of options), in which event the secondary market on that exchange (or in the class or series of options) would cease to exist, although outstanding options on the exchange that had been issued by a clearing corporation as a result of trades on that exchange would continue to be exercisable in accordance with their terms.

Disruptions in the markets for the securities underlying options purchased or sold by a Fund could result in losses on the options. If trading is interrupted in an underlying security, the trading of options on that security is normally halted as well. As a result, a Fund as purchaser or writer of an option will be unable to close out its positions until options trading resumes, and it may be faced with losses if trading in the security reopens at a substantially different price. In addition, the OCC or other options markets may impose exercise restrictions. If a prohibition on exercise is imposed at a time when trading in the option has also been halted, a Fund as purchaser or writer of an option will be locked into its position until one of the two restrictions has been lifted. If a prohibition on exercise remains in effect until an option owned by a Fund has expired, a Fund could lose the entire value of its option.

Special risks are presented by internationally traded options. Because of time differences between the United States and various foreign countries, and because different holidays are observed in different countries, foreign options markets may be open for trading during hours or on days when U.S. markets are closed. As a result, option premiums may not reflect the current prices of the underlying interest in the United States.

clearing corporation to exercise exchange-traded options, if a Fund purchases a dealer option it must rely on the selling dealer to perform if a Fund exercises the option. Failure by the dealer to do so would result in the loss of the premium paid by a Fund as well as loss of the expected benefit of the transaction. Exchange-traded options generally have a continuous liquid market while dealer options more often may not. Consequently, a Fund can realize the value of a dealer option it has purchased only by exercising or reselling the option to the issuing dealer. Similarly, when a Fund writes a dealer option, a Fund can close out the option prior to its expiration only by entering into a closing purchase transaction with the dealer. While each Fund seeks to enter into dealer options only with dealers who will agree to and can enter into closing transactions with a Fund, no assurance exists that a Fund will at any time be able to liquidate a dealer option at a favorable price at any time prior to expiration. Unless a Fund, as a covered dealer call option writer, can effect a closing purchase transaction, it will not be able to liquidate securities (or other assets) used as cover until the option expires or is exercised. In the event of insolvency of the other party, a Fund may be unable to liquidate a dealer option. With respect to options written by a Fund, the inability to enter into a closing transaction may result in material losses to a Fund. For example, because a Fund must maintain a secured position with respect to any call option on a security it writes, a Fund may not sell the assets, which it has segregated to secure the position while it is obligated under the option. This requirement may impair a Fund’s ability to sell portfolio securities at a time when such sale might be advantageous.

A Fund generally will treat purchased dealer options as illiquid securities. A Fund may treat the cover used for written dealer options as liquid if the dealer agrees that a Fund may repurchase the dealer option it has written for a maximum price to be calculated by a predetermined formula. In such cases, the dealer option would be considered illiquid only to the extent the maximum purchase price under the formula exceeds the intrinsic value of the option.

Writing Covered Options . A Fund may write covered call options and covered put options on securities held in its portfolio when, in the opinion of the Adviser, such transactions are consistent with a Fund’s investment goal and policies. Call options written by a Fund give the purchaser the right to buy the underlying securities from a Fund at the stated exercise price at any time prior to the expiration date of the option, regardless of the security’s market price; put options give the purchaser the right to sell the underlying securities to a Fund at the stated exercise price at any time prior to the expiration date of the option, regardless of the security’s market price.

A Fund may write only covered options, which means that, so long as a Fund is obligated as the writer of a call option, it will own the underlying securities subject to the option (or comparable securities satisfying the cover requirements of securities exchanges). In the case of put options, a Fund will hold cash and/or high-grade short-term debt obligations equal to the price to be paid if the option is exercised. In addition, a Fund will be considered to have covered a put or call option if and to the extent that it holds an option that offsets some or all of the risk of the option it has written. A Fund may write combinations of covered puts and calls (straddles) on the same underlying security.

A Fund will receive a premium from writing a put or call option, which increases a Fund’s return on the underlying security if the option expires unexercised or is closed out at a profit. The amount of the premium reflects, among other things, the relationship between the exercise price and the current market value of the underlying security, the volatility of the underlying security, the amount of time remaining until expiration, current interest rates, and the effect of supply and demand in the options market and in the market for the underlying security. By writing a call option, a Fund limits its opportunity to profit from any increase in the market value of the underlying security above the exercise price of the option but continues to bear the risk of a decline in the value of the underlying security. By writing a put option, a Fund assumes the risk that it may be required to purchase the underlying security for an exercise price higher than the security’s then-current market value, resulting in a potential capital loss unless the security subsequently appreciates in value.

execution of a closing purchase transaction, which is effected by purchasing on an exchange an offsetting option of the same series (i.e., same underlying instrument, exercise price and expiration date) as the option previously written. A closing purchase transaction will ordinarily be effected in order to realize a profit on an outstanding option, to prevent an underlying instrument from being called, to permit the sale of the underlying instrument or to permit the writing of a new option containing different terms on such underlying instrument. A Fund realizes a profit or loss from a closing purchase transaction if the cost of the transaction (option premium plus transaction costs) is less or more than the premium received from writing the option. Because increases in the market price of a call option generally reflect increases in the market price of the security underlying the option, any loss resulting from a closing purchase transaction may be offset in whole or in part by unrealized appreciation of the underlying security.

If a Fund writes a call option but does not own the underlying security, and when it writes a put option, a Fund may be required to deposit cash or securities with its broker as “margin” or collateral for its obligation to buy or sell the underlying security. As the value of the underlying security varies, a Fund may also have to deposit additional margin with the broker. Margin requirements are complex and are fixed by individual brokers, subject to minimum requirements currently imposed by the Federal Reserve Board and by stock exchanges and other self-regulatory organizations.

Purchasing Put Options . A Fund may purchase put options to protect its portfolio holdings in an underlying security against a decline in market value. Such hedge protection is provided during the life of the put option since a Fund, as holder of the put option, is able to sell the underlying security at the put exercise price regardless of any decline in the underlying security’s market price. For a put option to be profitable, the market price of the underlying security must decline sufficiently below the exercise price to cover the premium and transaction costs. By using put options in this manner, a Fund will reduce any profit it might otherwise have realized from appreciation of the underlying security by the premium paid for the put option and by transaction costs.

Purchasing Call Options . A Fund may purchase call options to hedge against an increase in the price of securities that a Fund wants ultimately to buy. Such hedge protection is provided during the life of the call option since a Fund, as holder of the call option, is able to buy the underlying security at the exercise price regardless of any increase in the underlying security’s market price. In order for a call option to be profitable, the market price of the underlying security must rise sufficiently above the exercise price to cover the premium and transaction costs. These costs will reduce any profit a Fund might have realized had it bought the underlying security at the time it purchased the call option.

Over-the-Counter (OTC) Options . A Fund will enter into OTC options transactions only with primary dealers in U.S. Government securities and, in the case of OTC options written by a Fund, only pursuant to agreements that will assure that a Fund will at all times have the right to repurchase the option written by it from the dealer at a specified formula price. A Fund will treat the amount by which such formula price exceeds the amount, if any, by which the option may be “in-the-money” as an illiquid investment. It is the present policy of a Fund not to enter into any OTC option transaction if, as a result, more than 15% (10% in some cases, refer to your Fund’s prospectuses) of a Fund’s net assets would be invested in (i) illiquid investments (determined under the foregoing formula) relating to OTC options written by a Fund, (ii) OTC options purchased by a Fund, (iii) securities which are not readily marketable, and (iv) repurchase agreements maturing in more than seven days.

Index Options . As an alternative to purchasing call and put options on index futures, a Fund may purchase call and put options on the underlying indices themselves. Such options could be used in a manner identical to the use of options on index futures. Options involving securities indices provide the holder with the right to make or receive a cash settlement upon exercise of the option based on movements in the relevant index. Such options must be listed on a national securities exchange and issued by the OCC. Such options may relate to various stock indices, except that a Fund may not write covered options on an index.

Foreign Stock Index Options . A Fund may, for the purpose of hedging its portfolio, subject to applicable securities regulations, purchase and write put and call options on foreign stock indices listed on foreign and domestic stock exchanges.

Swap Agreements

Swap agreements are derivative instruments that can be individually negotiated and structured to include exposure to a variety of different types of investments or market factors. Depending on their structure, swap agreements may increase or decrease a Fund’s exposure to long- or short-term interest rates, foreign currency values, mortgage securities, corporate borrowing rates, or other factors such as security prices or inflation rates. A Fund may enter into a variety of swap agreements, including interest rate, index, commodity, equity, credit default and currency exchange rate swap agreements, and other types of swap agreements such as caps, collars and floors. A Fund also may enter into swaptions, which are options to enter into a swap agreement.

In a typical interest rate swap, one party agrees to make regular payments equal to a floating interest rate times a “notional principal amount,” in return for payments equal to a fixed rate times the same amount, for a specified period of time. If a swap agreement provides for payments in different currencies, the parties might agree to exchange notional principal amount as well. In a total return swap agreement, the non-floating rate side of the swap is based on the total return of an individual security, a basket of securities, an index or another reference asset. Swaps may also depend on other prices or rates, such as the value of an index or mortgage prepayment rates.

In a typical cap or floor agreement, one party agrees to make payments only under specified circumstances, usually in return for payment of a fee by the other party. For example, the buyer of an interest rate cap obtains the right to receive payments to the extent that a specified interest rate exceeds an agreed-upon level, while the seller of an interest rate floor is obligated to make payments to the extent that a specified interest rate falls below an agreed-upon level. Caps and floors have an effect similar to buying or writing options. A collar combines elements of buying a cap and selling a floor.

Swap agreements will tend to shift a Fund’s investment exposure from one type of investment to another. For example, if a Fund agreed to pay fixed rates in exchange for floating rates while holding fixed-rate bonds, the swap would tend to decrease a Fund’s exposure to long-term interest rates. Another example is if a Fund agreed to exchange payments in dollars for payments in foreign currency, the swap agreement would tend to decrease a Fund’s exposure to U.S. interest rates and increase its exposure to foreign currency and interest rates.

Swap agreements are sophisticated hedging instruments that typically involve a small investment of cash relative to the magnitude of risks assumed. As a result, swaps can be highly volatile and may have a considerable impact on a Fund’s performance. Depending on how they are used, swap agreements may increase or decrease the overall volatility of a Fund’s investments and its share price and yield. Additionally, whether a Fund’s use of swap agreements will be successful in furthering its investment objective will depend on the Adviser’s ability correctly to predict whether certain types of investments likely are to produce greater returns than other investments. Because they are two party contracts and because they may have terms of greater than seven days, swap agreements may be considered to be illiquid. Moreover, a Fund bears the risk of loss of the amount expected to be received under a swap agreement in the event of the default or bankruptcy of a swap agreement counterparty. The most significant factor in the performance of swap agreements is the change in the specific interest rate, currency, or other factor that determines the amounts of payments due to and from a Fund. If a swap agreement calls for payments by a Fund, a Fund must be prepared to make such payments when due. In addition, if the counterparty’s creditworthiness declines, the value of a swap agreement likely would decline, potentially resulting in losses for a Fund. A Fund will closely monitor the credit of a swap agreement counterparty in order to attempt to minimize this risk. A Fund may also suffer losses if it is unable to terminate outstanding swap agreements (either by assignment or other disposition) or reduce its exposure through offsetting transactions (i.e., by entering into an offsetting swap agreement with the same party or a similarly creditworthy party).

Credit Default Swap Agreements . A Fund may enter into credit default swap agreements, which may have as reference obligations one or more securities or a basket of securities that are or are not currently held by a Fund. The protection “buyer” in a credit default contract is generally obligated to pay the protection “seller” an upfront or a periodic stream of payments over the term of the contract provided that no credit event, such as a default, on a reference obligation has occurred. If a credit event occurs, the seller generally must pay the buyer the “par value” (full notional value) of the swap in exchange for an equal face amount of deliverable obligations of the reference entity described in the swap, or the seller may be required to deliver the related net cash amount, if the swap is cash settled. A Fund may be either the buyer or seller in the transaction. If a Fund is a buyer and no credit event occurs, a Fund may recover nothing if the swap is held through its termination date. However, if a credit event occurs, the buyer generally may elect to receive the full notional value of the swap in exchange for an equal face amount of deliverable obligations of the reference entity whose value may have significantly decreased. As a seller, a Fund generally receives an upfront payment or a fixed rate of income throughout the term of the swap provided that there is no credit event. As the seller, a Fund would effectively add leverage to its portfolio because, in addition to its total net assets, a Fund would be subject to investment exposure on the notional amount of the swap.

Credit default swap agreements may involve greater risks than if a Fund had invested in the reference obligation directly since, in addition to risks relating to the reference obligation, credit default swaps are subject to illiquidity risk, counterparty risk and credit risk. A Fund will enter into credit default swap agreements generally with counterparties that meet certain standards of creditworthiness. A buyer generally will lose its investment and recover nothing if no credit event occurs and the swap is held to its termination date. If a credit event were to occur, the value of any deliverable obligation received by the seller, coupled with the upfront or periodic payments previously received, may be less than the full notional value it pays to the buyer, resulting in a loss of value to the seller.

Equity Swaps . A Fund may engage in equity swaps. Equity swaps allow the parties to the swap agreement to exchange components of return on one equity investment (e.g., a basket of equity securities or an index) for a component of return on another non-equity or equity investment, including an exchange of differential rates of return. Equity swaps may be used to invest in a market without owning or taking physical custody of securities in circumstances where direct investment may be restricted for legal reasons or is otherwise impractical. Equity swaps also may be used for other purposes, such as hedging or seeking to increase total return.

The values of equity swaps can be very volatile. To the extent that the Adviser does not accurately analyze and predict the potential relative fluctuation on the components swapped with the other party, a Fund may suffer a loss. The value of some components of an equity swap (such as the dividend on a common stock) may also be sensitive to changes in interest rates. Furthermore, during the period a swap is outstanding, a Fund may suffer a loss if the counterparty defaults.

Total Return Swap Agreements . Total return swap agreements are contracts in which one party agrees to make periodic payments to another party based on the change in market value of the assets underlying the contract, which may include a specified security, basket of securities or securities indices during the specified period, in return for periodic payments based on a fixed or variable interest rate or the total return from other underlying assets. Total return swap agreements may be used to obtain exposure to a security or market without owning or taking physical custody of such security or investing directly in such market. Total return swap agreements may effectively add leverage to a Fund’s portfolio because, in addition to its total net assets, a Fund would be subject to investment exposure on the notional amount of the swap.

Total return swap agreements are subject to the risk that a counterparty will default on its payment obligations to a Fund thereunder, and conversely, that a Fund will not be able to meet its obligation to the counterparty. Generally, a Fund will enter into total return swaps on a net basis (i.e., the two payment streams are netted against one another with a Fund receiving or paying, as the case may be, only the net amount of the two payments). The net amount of the excess, if any, of a Fund’s obligations over its entitlements with respect to each

total return swap will be accrued on a daily basis, and an amount of liquid assets having an aggregate net asset value at least equal to the accrued excess will be segregated by a Fund. If the total return swap transaction is entered into on other than a net basis, the full amount of a Fund’s obligations will be accrued on a daily basis, and the full amount of a Fund’s obligations will be segregated by a Fund in an amount equal to or greater than the market value of the liabilities under the total return swap agreement or the amount it would have cost a Fund initially to make an equivalent direct investment, plus or minus any amount a Fund is obligated to pay or is to receive under the total return swap agreement.

Variance, Volatility and Correlation Swap Agreements. Variance and volatility swaps are contracts that provide exposure to increases or decreases in the volatility of certain referenced assets. Correlation swaps are contracts that provide exposure to increases or decreases in the correlation between the prices of different assets or different market rates.

Dollar Rolls

Dollar rolls involve selling securities (e.g., mortgage-backed securities or U.S. Treasury securities) and simultaneously entering into a commitment to purchase those or similar (same collateral type, coupon and maturity) securities on a specified future date and price. Mortgage dollar rolls and U.S. Treasury rolls are types of dollar rolls. A Fund foregoes principal and interest paid on the securities during the “roll” period. A Fund is compensated by the difference between the current sales price and the lower forward price for the future purchase of the securities as well as the interest earned on the cash proceeds of the initial sale.

Dollar rolls involve the risk that the market value of the securities a Fund is obligated to repurchase may decline below the repurchase price or that the transaction costs may exceed the return earned by a Fund from the transaction. Dollar rolls also involve risk to a Fund if the other party should default on its obligation and a Fund is delayed or prevented from completing the transaction. In the event that the buyer of securities under a dollar roll files for bankruptcy or becomes insolvent, a Fund’s use of proceeds of the dollar roll may be restricted pending a determination by the other party, or its trustee or receiver, whether to enforce a Fund’s obligation to repurchase the securities. In addition, the security to be delivered in the future may turn out to be inferior to the security sold upon entering into the transaction.

Foreign Currency Transactions

Foreign currency transactions may be used to protect, to some extent, against uncertainty in the level of future currency exchange rates by establishing a fixed exchange rate. Foreign currency transactions may involve the purchase or sale of foreign currencies on a “spot” (cash) basis at the prevailing exchange rate or may involve “forward contracts” that allow a Fund to purchase or sell foreign currencies at a future date. Forward contracts may be used for “transaction hedging,” “position hedging” and “cross-hedging.” A Fund may use forward sale contracts to sell an amount of a foreign currency approximating the value of a Fund’s securities denominated in the foreign security when that foreign currency suffers a substantial decline against the U.S. dollar. A Fund may use forward purchase contracts to purchase a foreign currency when it is believed that the U.S. dollar may suffer a substantial decline against the foreign currency. Although these transactions tend to minimize the risk of loss due to a decline in the value of the hedged currency, they also tend to limit any potential gain that might be realized if the value of the hedged currency increases.

Transaction hedging may allow a Fund to “lock in” the U.S. dollar price of a security it has agreed to purchase or sell, or the U.S. dollar equivalent of a dividend or interest rate payment in a foreign currency. A Fund may use transaction hedging to protect itself against a possible loss resulting from an adverse change in the relationship between the U.S. dollar and the applicable foreign currency during the period between the date on which the security is purchased or sold, or on which the dividend or interest payment is declared, and the date on which such payments are made or received.

Position hedging may allow a Fund to protect against an adverse change in the relationship between the U.S. dollar and the applicable foreign currencies in which its portfolio securities are denominated. A Fund may use

position hedging when it is believed that the U.S. dollar may suffer a decline against the foreign currency by entering into a forward purchase contract to purchase that foreign currency for a fixed dollar amount.

Cross-hedging may allow a Fund to enter into a forward contract to sell a different foreign currency for a fixed U.S. dollar amount when it is believed that the U.S. dollar value of the currency to be sold pursuant to the forward contract will fall if there is a decline in the U.S. dollar value of the currency in which a Fund’s securities are denominated.

A Fund also may purchase exchange-listed and over-the-counter call and put options on foreign currencies and foreign currency contracts. Options on foreign currencies and foreign currency contracts give the holder a right to buy or sell the underlying foreign currencies or foreign currency contracts for a specified period of time and for a specified amount. The value of an option on foreign currencies or foreign currency contracts reflects the value of an exchange rate, which depends on the relative values of the U.S. dollar and the relevant foreign currency.

Engaging in foreign currency transactions is subject to certain risks. For example, if the value of a foreign currency were to decline against the U.S. dollar, such decline would reduce the dollar value of any securities held by a Fund denominated in that currency. It is impossible to forecast with precision the market value of portfolio securities at the expiration or maturity of a forward or futures contract, which may make it necessary for a Fund to purchase additional foreign currency on the spot market if the market value of the security being hedged is less than the amount of foreign currency a Fund is obligated to deliver at the time a Fund sells the security being hedged. The value of any currency, including the U.S. dollar, may be affected by political and economic factors applicable to the issuer’s country. The exchange rates of currencies also may be affected adversely by governmental actions. Transaction, position and cross-hedging do not eliminate fluctuations in the underlying prices of securities that a Fund owns or intends to purchase or sell and may limit the amount of potential gain that might result from the increase in value of the currency being hedged. Settlement procedures relating to a Fund’s foreign currency transactions may be more complex than those relating to investments in securities of U.S. issuers.

Foreign Securities

Foreign securities include debt, equity and derivative securities that the Adviser determines are “foreign” based on the consideration of an issuer’s domicile, its principal place of business, its primary stock exchange listing, the source of its revenue or other factors. Foreign securities may be structured as fixed-, variable- or floating-rate obligations or as zero-coupon, pay-in-kind and step-coupon securities and may be privately placed or publicly offered. See Permissible Fund Investments – Variable- and Floating-Rate Obligations, Permissible Fund Investments – Zero-Coupon, Pay-in-Kind and Step-Coupon Securities and Permissible Fund Investments – Private Placement and Other Restricted Securities for more information.

Foreign securities may include depositary receipts, such as American Depositary Receipts (ADRs), European Depositary Receipts (EDRs) and Global Depositary Receipts (GDRs). ADRs are U.S. dollar-denominated receipts issued in registered form by a domestic bank or trust company that evidence ownership of underlying securities issued by a foreign issuer. EDRs are foreign currency-denominated receipts issued in Europe, typically by foreign banks or trust companies and foreign branches of domestic banks, that evidence ownership of foreign or domestic securities. GDRs are receipts structured similarly to ADRs and EDRs and are marketed globally. Depositary receipts will not necessarily be denominated in the same currency as their underlying securities. In general, ADRs, in registered form, are designed for use in the U.S. securities markets, and EDRs, in bearer form, are designed for use in European securities markets. GDRs are tradable both in the United States and in Europe and are designed for use throughout the world. A Fund may invest in depositary receipts through “sponsored” or “unsponsored” facilities. A sponsored facility is established jointly by the issuer of the underlying security and a depositary, whereas a depositary may establish an unsponsored facility without participation by the issuer of the deposited security. Holders of unsponsored depositary receipts generally bear all the costs of such facilities and the depositary of an unsponsored facility frequently is under no obligation to

distribute interest holder communications received from the issuer of the deposited security or to pass through voting rights to the holders of such receipts in respect of the deposited securities. The issuers of unsponsored depositary receipts are not obligated to disclose material information in the United States, and, therefore, there may be limited information available regarding such issuers and/or limited correlation between available information and the market value of the depositary receipts.

Due to the potential for foreign withholding taxes, Morgan Stanley Capital International (MSCI) publishes two versions of its indices reflecting the reinvestment of dividends using two different methodologies: gross dividends and net dividends. While both versions reflect reinvested dividends, they differ with respect to the manner in which taxes associated with dividend payments are treated. In calculating the net dividends version, MSCI incorporates reinvested dividends applying the withholding tax rate applicable to foreign non-resident institutional investors that do not benefit from double taxation treaties. The Adviser believes that the net dividends version of MSCI indices better reflects the returns U.S. investors might expect were they to invest directly in the component securities of an MSCI Index.

Investing in foreign securities is subject to certain risks. For example, foreign markets can be extremely volatile. Fluctuations in currency exchange rates also may impact the value of foreign securities denominated in foreign currencies or U.S. dollars, without a change in the intrinsic value of those securities. Additionally, the U.S. dollar value of a foreign security tends to decrease when the value of the U.S. dollar rises against the foreign currency in which the security is denominated and tends to increase when the value of the U.S. dollar falls against such currency. A Fund may attempt to minimize the risk from adverse changes in the relationship between the U.S. dollar and foreign currencies by purchasing and selling forward foreign currency exchange contracts and foreign currency futures contracts and related options. Foreign securities may be less liquid than domestic securities so that a Fund may, at times, be unable to sell foreign securities at desirable prices. Brokerage commissions, custodial fees and other fees also are generally higher for foreign securities. A Fund may have limited legal recourse in the event of default with respect to certain debt securities issued by foreign governments. In addition, foreign governments may impose potentially confiscatory withholding or other taxes, which would reduce a Fund’s return on these securities.

Other risks include: possible delays in the settlement of transactions or in the notification of income; generally less publicly available information about companies; adverse impact of political, social or diplomatic events; possible seizure, expropriation or nationalization of a company or its assets; possible imposition of currency exchange controls; and that foreign companies generally are not subject to accounting, auditing and financial reporting standards comparable to those mandated for domestic companies.

Risks associated with investments in foreign securities are increased with respect to investments in emerging market countries. Political and economic structures in many emerging market countries, especially those in Eastern Europe, the Pacific Basin and the Far East, are undergoing significant evolutionary changes and rapid development, and may lack the social, political and economic stability of more developed countries. Investing in emerging market securities also involves risks beyond the risks applicable to foreign investments. For example, some emerging market countries may have fixed or managed currencies that are not free-floating against the U.S. dollar. Further, certain currencies may not be traded internationally, and some countries with emerging securities markets have sustained long periods of very high inflation or rapid fluctuation in inflation rates which can have negative effects on a country’s economy and securities markets.

Guaranteed Investment Contracts (Funding Agreements)

Guaranteed investment contracts, or funding agreements, are debt instruments issued by insurance companies. Pursuant to such contracts, a Fund may make cash contributions to a deposit fund of the insurance company’s general account. The insurance company then credits to a Fund payments at negotiated, floating or fixed interest rates. A Fund will purchase guaranteed investment contracts only from issuers that, at the time of purchase, meet certain credit and quality standards.

Investing in guaranteed investment contracts is subject to certain risks. In general, guaranteed investment contracts are not assignable or transferable without the permission of the issuing insurance companies, and an active secondary market does not exist for these investments. In addition, the issuer may not be able to pay the principal amount to a Fund on seven days notice or less, at which time the investment may be considered illiquid under applicable SEC regulatory guidance and subject to certain restrictions.

Illiquid Securities

Illiquid securities are defined by a Fund consistent with SEC staff’s current guidance and interpretations which provide that an illiquid security is an asset which may not be sold or disposed of in the ordinary course of business within seven days at approximately the value at which a Fund has valued the investment on its books. Some securities, such as those not registered under U.S. securities laws, cannot be sold in public transactions. Subject to its investment policies, a Fund may invest in illiquid investments and may invest in certain restricted securities that are deemed to be illiquid securities.

Initial Public Offerings

A Fund may invest in initial public offerings (IPO s)of common stock or other primary or secondary syndicated offerings of equity or debt securities issued by a corporate issuer. A purchase of IPO securities often involves higher transaction costs than those associated with the purchase of securities already traded on exchanges or markets. IPO securities are subject to market risk and liquidity risk. The market value of recently issued IPO securities may fluctuate considerably due to factors such as the absence of a prior public market, unseasoned trading and speculation, a potentially small number of securities available for trading, limited information about the issuer, and other factors. A Fund may hold IPO securities for a period of time, or may sell them soon after the purchase. Investments in IPO s could have a magnified impact – either positive or negative – on a Fund’s performance while the Fund’s assets are relatively small. The impact of an IPO on a Fund’s performance may tend to diminish as the Fund’s assets grow. In circumstances when investments in IPO s make a significant contribution to a Fund’s performance, there can be no assurance that similar contributions from IPO s will continue in the future.

Investments in Other Investment Companies

Investing in other investment companies may be a means by which a Fund seeks to achieve its investment objective. A Fund may invest in securities issued by other investment companies within the limits prescribed by the 1940 Act, the rules and regulations thereunder and any exemptive orders currently or in the future obtained by a Fund from the SEC.

Except with respect to funds structured as funds-of-funds or so-called master/feeder funds, the 1940 Act generally requires that a fund limit its investments in another investment company or series thereof so that, as determined at the time a securities purchase is made: (i) no more than 5% of the value of its total assets will be invested in the securities of any one investment company; (ii) no more than 10% of the value of its total assets will be invested in the aggregate in securities of other investment companies; and (iii) no more than 3% of the outstanding voting stock of any one investment company or series thereof will be owned by a fund or by companies controlled by the fund. Such other investment companies may include ETFs which are shares of publicly traded unit investment trusts, open-end funds or depositary receipts that seek to track the performance of specific indexes or companies in related industries.

Investing in other investment companies is subject to certain risks. Although a fund may derive certain advantages from being able to invest in shares of other investment companies, such as to be fully invested, there may be potential disadvantages. Investing in other investment companies may result in higher fees and expenses for a fund and its shareholders. A shareholder may be charged fees not only on fund shares held directly but also on the investment company shares that a fund purchases.

In addition, investing in ETFs is subject to certain other risks. ETFs generally are subject to the same risks as the underlying securities the ETFs are designed to track as well as to the risks of the specific sector or industry on which the ETF relates. ETFs also are subject to the risk that their prices may not totally correlate to the prices of the underlying securities the ETFs are designed to track and the risk of possible trading halts due to market conditions or for other reasons.

Under the 1940 Act and rules and regulations thereunder, a fund may purchase shares of affiliated funds, subject to certain conditions. Investing in affiliated funds may present certain actual or potential conflicts of interest. For more information about such actual and potential conflicts of interest, see Investment Advisory and Other Services – Other Roles and Relationships of Ameriprise Financial and its Affiliates – Certain Conflicts of Interest .

Low and Below Investment Grade Securities

Low and below investment grade securities (below investment grade securities are also known as “junk bonds”) are debt securities with the lowest investment grade rating (e.g., BBB by S&P and Fitch or Baa by Moody’s), that are below investment grade (e.g., lower than BBB by S&P and Fitch or Baa by Moody’s) or that are unrated but determined by the Adviser to be of comparable quality. These types of securities may be issued to fund corporate transactions or restructurings, such as leveraged buyouts, mergers, acquisitions, debt reclassifications or similar events, are more speculative in nature than securities with higher ratings and tend to be more sensitive to credit risk, particularly during a downturn in the economy. These types of securities generally are issued by unseasoned companies without long track records of sales and earnings, or by companies or municipalities that have questionable credit strength. Low and below investment grade securities and comparable unrated securities: (i) likely will have some quality and protective characteristics that, in the judgment of one or more NRSROs, are outweighed by large uncertainties or major risk exposures to adverse conditions; (ii) are speculative with respect to the issuer’s capacity to pay interest and repay principal in accordance with the terms of the obligation; and (iii) may have a less liquid secondary market, potentially making it difficult to value or sell such securities. Low and below investment grade securities may be structured as fixed-, variable- or floating-rate obligations or as zero-coupon, pay-in-kind and step-coupon securities and may be privately placed or publicly offered. See Permissible Fund Investments – Variable- and Floating-Rate Obligations, Permissible Fund Investments – Zero-Coupon, Pay-in-Kind and Step-Coupon Securities and Permissible Fund Investments – Private Placement and Other Restricted Securities for more information.

Investing in low and below investment grade securities and comparable unrated securities is subject to certain risks. The rates of return on these types of securities generally are higher than the rates of return available on more highly rated securities, but generally involve greater volatility of price and risk of loss of principal and income, including the possibility of default by or insolvency of the issuers of such securities. Accordingly, a Fund may be more dependent on the Adviser’s credit analysis with respect to these types of securities than is the case for more highly rated securities.

The market values of certain low and below investment grade securities and comparable unrated securities tend to be more sensitive to individual corporate developments and changes in economic conditions than are the market value of more highly rated securities. In addition, issuers of low and below investment grade and comparable unrated securities often are highly leveraged and may not have more traditional methods of financing available to them, so that their ability to service their debt obligations during an economic downturn or during sustained periods of rising interest rates may be impaired.

securities may diminish a Fund’s ability to: (i) obtain accurate market quotations for purposes of valuing such securities and calculating portfolio net asset value; and (ii) sell the securities at fair market value either to meet redemption requests or to respond to changes in the economy or in financial markets.

Many lower-rated securities are not registered for offer and sale to the public under the 1933 Act. Investments in these restricted securities may be determined to be liquid (able to be sold within seven days at approximately the price at which they are valued by a Fund) pursuant to policies approved by the Fund’s Trustees. Investments in illiquid securities, including restricted securities that have not been determined to be liquid, may not exceed 15% of a Fund’s net assets. A Fund is not otherwise subject to any limitation on its ability to invest in restricted securities. Restricted securities may be less liquid than other lower-rated securities, potentially making it difficult to value or sell such securities.

Money Market Instruments

Money market instruments are high-quality, short-term debt obligations, which include: (i) bank obligations, including certificates of deposit, time deposits and bankers’ acceptances; (ii) funding agreements; (iii) repurchase agreements; (iv) obligations of the United States, foreign countries and supranational entities, and each of their subdivisions, agencies and instrumentalities; (v) certain corporate debt securities, such as commercial paper, short-term corporate obligations and extendible commercial notes; (vi) participation interests; and (vii) municipal securities. Money market instruments may be structured as fixed-, variable- or floating-rate obligations and may be privately placed or publicly offered. See Permissible Fund Investments – Variable- and Floating-Rate Obligations and Permissible Fund Investments – Private Placement and Other Restricted Securities for more information.

Investing in money market instruments is subject to certain risks. Money market instruments (other than certain U.S. Government obligations) are not backed or insured by the U.S. Government, its agencies or its instrumentalities. Accordingly, only the creditworthiness of an issuer, or guarantees of that issuer, support such instruments.

Mortgage-Backed Securities

Mortgage-backed securities are a type of asset-backed security and represent interests in, or debt instruments backed by, pools of underlying mortgages. In some cases, these underlying mortgages may be insured or guaranteed by the U.S. Government or its agencies. Mortgage-backed securities entitle the security holders to receive distributions that are tied to the payments made on the underlying mortgage collateral (less fees paid to the originator, servicer, or other parties, and fees paid for credit enhancement), so that the payments made on the underlying mortgage collateral effectively pass through to such security holders. Mortgage-backed securities are created when mortgage originators (or mortgage loan sellers who have purchased mortgage loans from mortgage loan originators) sell the underlying mortgages to a special purpose entity in a process called a securitization. The special purpose entity issues securities that are backed by the payments on the underlying mortgage loans, and have a minimum denomination and specific term. Mortgage-backed securities may be structured as fixed-, variable- or floating-rate obligations or as zero-coupon, pay-in-kind and step-coupon securities and may be privately placed or publicly offered. See Permissible Fund Investments – Variable- and Floating-Rate Obligations, Permissible Fund Investments – Zero-Coupon, Pay-in-Kind and Step-Coupon Securities and Permissible Fund Investments – Private Placement and Other Restricted Securities for more information.

Both issue mortgage-related securities that contain guarantees as to timely payment of interest and principal but that are not backed by the full faith and credit of the U.S. Government. The value of the companies’ securities fell sharply in 2008 due to concerns that the firms did not have sufficient capital to offset losses. In mid-2008, the U.S. Treasury was authorized to increase the size of home loans that FNMA and FHLMC could purchase in certain residential areas and, until 2009, to lend FNMA and FHLMC emergency funds and to purchase the companies’ stock. More recently, in September 2008, the U.S. Treasury announced that FNMA and FHLMC had been placed in conservatorship by the Federal Housing Finance Agency (FHFA), a newly created independent regulator. In addition to placing the companies in conservatorship, the U.S. Treasury announced three additional steps that it intended to take with respect to FNMA and FHLMC. First, the U.S. Treasury has entered into “Preferred Stock Purchase Agreements” (PSPAs) under which, if the FHFA determines that FNMA’s or FHLMC’s liabilities have exceeded its assets under generally accepted accounting principles, the U.S. Treasury will contribute cash capital to the company in an amount equal to the difference between liabilities and assets. The PSPAs are designed to provide protection to the senior and subordinated debt and the mortgage-backed securities issued by FNMA and FHLMC. Second, the U.S. Treasury established a new secured lending credit facility that is available to FNMA and FHLMC until December 2009. Third, the U.S. Treasury initiated a temporary program to purchase FNMA and FHLMC mortgage-backed securities, which is expected to continue until December 2009. No assurance can be given that the U.S. Treasury initiatives discussed above with respect to the debt and mortgage-backed securities issued by FNMA and FHLMC will be successful.

CMOs are debt obligations issued by special-purpose trusts, collateralized by underlying mortgage assets. Principal prepayments on underlying mortgage assets may cause the CMOs to be retired substantially earlier than their stated maturities or final distribution dates, resulting in a loss of all or part of the premium if any has been paid. Interest is paid or accrues on all classes of the CMOs on a periodic basis. The principal and interest payments on the underlying mortgage assets may be allocated among the various classes of CMOs in several ways. Typically, payments of principal, including any prepayments, on the underlying mortgage assets are applied to the classes in the order of their respective stated maturities or final distribution dates, so that no payment of principal is made on CMOs of a class until all CMOs of other classes having earlier stated maturities or final distribution dates have been paid in full.

REMICs are entities that own mortgages and elect REMIC status under the Code and, like CMOs, issue debt obligations collateralized by underlying mortgage assets that have characteristics similar to those issued by CMOs.

Investing in mortgage-backed securities is subject to certain risks, including, among others, prepayment, market and credit risks. Prepayment risk reflects the risk that borrowers may prepay their mortgages more quickly than expected, which may affect the security’s average maturity and rate of return. Whether or not a mortgage loan is prepaid is almost entirely controlled by the borrower. Borrowers are most likely to exercise prepayment options at the time when it is least advantageous to investors, generally prepaying mortgages as interest rates fall, and slowing payments as interest rates rise. Besides the effect of prevailing interest rates, the rate of prepayment and refinancing of mortgages also may be affected by home value appreciation, ease of the refinancing process and local economic conditions, among other factors. Market risk reflects the risk that the price of a security may fluctuate over time. The price of mortgage-backed securities can be particularly sensitive to prevailing interest rates, the length of time the security is expected to be outstanding and the liquidity of the issue. In a period of unstable interest rates, there may be decreased demand for certain types of mortgage-backed securities, which in turn may decrease their value. Credit risk reflects the risk that a holder of mortgage-backed securities may not receive all or part of its principal because the issuer, any credit enhancer and/or the underlying mortgage borrower has defaulted on its obligations. Credit risk is increased for mortgage-backed securities that are backed by mortgages to so-called subprime borrowers (who may pose a greater risk of defaulting on their loans) or that are subordinated to another security (i.e., if the holder of a mortgage-backed security is entitled to receive payments only after payment obligations to holders of the other security are satisfied). The more deeply subordinated the security, the greater the credit risk associated with the security will be. Mortgage-backed securities issued by private issuers, whether or not such obligations are subject to guarantees by the private

issuer, may entail greater risk than mortgage-backed securities guaranteed by the U.S. Government. The performance of mortgage-backed securities issued by private issuers generally depends on the financial health of those institutions.

Municipal Securities

Municipal securities include debt obligations issued by governmental entities to obtain funds for various public purposes, including the construction of a wide range of public facilities, the refunding of outstanding obligations, the payment of general operating expenses, and the extension of loans to public institutions and facilities. Municipal securities can be classified into two principal categories, including “general obligation” bonds and other securities and “revenue” bonds and other securities. General obligation bonds are secured by the issuer’s full faith, credit and taxing power for the payment of principal and interest. Revenue securities are payable only from the revenues derived from a particular facility or class of facilities or, in some cases, from the proceeds of a special excise tax or other specific revenue source, such as the user of the facility being financed. Municipal securities also may include “moral obligation” securities, which normally are issued by special purpose public authorities. If the issuer of moral obligation securities is unable to meet its debt service obligations from current revenues, it may draw on a reserve fund, the restoration of which is a moral commitment but not a legal obligation of the governmental entity that created the special purpose public authority. Municipal securities may be structured as fixed-, variable- or floating-rate obligations or as zero-coupon, pay-in-kind and step-coupon securities and may be privately placed or publicly offered. See Permissible Fund Investments – Variable- and Floating-Rate Obligations, Permissible Fund Investments – Zero-Coupon, Pay-in-Kind and Step-Coupon Securities and Permissible Fund Investments – Private Placement and Other Restricted Securities for more information.

Municipal securities may include municipal bonds, municipal notes and municipal leases. Municipal bonds are debt obligations of a governmental entity that obligate the municipality to pay the holder a specified sum of money at specified intervals and to repay the principal amount of the loan at maturity.

Municipal notes may be issued by governmental entities and other tax-exempt issuers in order to finance short-term cash needs or, occasionally, to finance construction. Most municipal notes are general obligations of the issuing entity payable from taxes or designated revenues expected to be received within the relevant fiscal period. Municipal notes generally have maturities of one year or less. Municipal notes can be subdivided into two sub-categories: (i) municipal commercial paper and (ii) municipal demand obligations.

Municipal commercial paper typically consists of very short-term unsecured negotiable promissory notes that are sold, for example, to meet seasonal working capital or interim construction financing needs of a governmental entity or agency. While these obligations are intended to be paid from general revenues or refinanced with long-term debt, they frequently are backed by letters of credit, lending agreements, note repurchase agreements or other credit facility agreements offered by banks or institutions.

Municipal demand obligations can be subdivided into two general types: variable rate demand notes and master demand obligations. Variable rate demand notes are tax-exempt municipal obligations or participation interests that provide for a periodic adjustment in the interest rate paid on the notes. They permit the holder to demand payment of the notes, or to demand purchase of the notes at a purchase price equal to the unpaid principal balance, plus accrued interest either directly by the issuer or by drawing on a bank letter of credit or guaranty issued with respect to such note. The issuer of the municipal obligation may have a corresponding right to prepay at its discretion the outstanding principal of the note plus accrued interest upon notice comparable to that required for the holder to demand payment. The variable rate demand notes in which a Fund may invest are payable, or are subject to purchase, on demand usually on notice of seven calendar days or less. The terms of the notes generally provide that interest rates are adjustable at intervals ranging from daily to six months.

opinion of counsel for the borrower, excluded from gross income for federal income tax purposes (but not necessarily for alternative minimum tax purposes). Although there is no secondary market for master demand obligations, such obligations are considered by a Fund to be liquid because they are payable upon demand.

Municipal lease obligations are participations in privately arranged loans to state or local government borrowers. In general, such loans are unrated, in which case they will be determined by the Adviser to be of comparable quality at the time of purchase to rated instruments that may be acquired by a Fund. Frequently, privately arranged loans have variable interest rates and may be backed by a bank letter of credit. In other cases, they may be unsecured or may be secured by assets not easily liquidated. Moreover, such loans in most cases are not backed by the taxing authority of the issuers and may have limited marketability or may be marketable only by virtue of a provision requiring repayment following demand by the lender.

Although lease obligations do not constitute general obligations of the municipal issuer to which the government’s taxing power is pledged, a lease obligation ordinarily is backed by the government’s covenant to budget for, appropriate, and make the payments due under the lease obligation. However, certain lease obligations contain “non-appropriation” clauses that provide that the government has no obligation to make lease or installment purchase payments in future years unless money is appropriated for such purpose on a periodic basis. In the case of a “non-appropriation” lease, a Fund’s ability to recover under the lease in the event of non-appropriation or default likely will be limited to the repossession of the leased property in the event that foreclosure proves difficult.

Tender option bonds are municipal securities having relatively long maturities and bearing interest at a fixed interest rate substantially higher than prevailing short-term tax-exempt rates that is coupled with the agreement of a third party, such as a bank, broker/dealer or other financial institution, to grant the security holders the option, at periodic intervals, to tender their securities to the institution and receive the face value thereof. The financial institution receives periodic fees equal to the difference between the municipal security’s coupon rate and the rate that would cause the security to trade at face value on the date of determination.

Investing in municipal securities is subject to certain risks. There are variations in the quality of municipal securities, both within a particular classification and between classifications, and the rates of return on municipal securities can depend on a variety of factors, including general money market conditions, the financial condition of the issuer, general conditions of the municipal bond market, the size of a particular offering, the maturity of the obligation, and the rating of the issue. The ratings of NRSROs represent their opinions as to the quality of municipal securities. It should be emphasized, however, that these ratings are general and are not absolute standards of quality, and municipal securities with the same maturity, interest rate, and rating may have different rates of return while municipal securities of the same maturity and interest rate with different ratings may have the same rate of return.

The payment of principal and interest on most municipal securities purchased by a Fund will depend upon the ability of the issuers to meet their obligations. An issuer’s obligations under its municipal securities are subject to the provisions of bankruptcy, insolvency, and other laws affecting the rights and remedies of creditors, such as the United States Bankruptcy Code. The power or ability of an issuer to meet its obligations for the payment of interest on and principal of its municipal securities may be materially adversely affected by litigation or other conditions.

There are particular considerations and risks relevant to investing in a portfolio of a single state’s municipal securities, such as the greater risk of the concentration of portfolio holdings.

interest payments from a security could become federally taxable, possibly retroactively to the date the security was issued. As a shareholder of the Fund, you may be required to file an amended tax return as a result, reporting such income as taxable.

Participation Interests

Participation interests (also called pass-through certificates or securities) represent an interest in a pool of debt obligations, such as municipal bonds or notes, that have been “packaged” by an intermediary, such as a bank or broker/dealer. Participation interests typically are issued by partnerships or trusts through which a Fund receives principal and interest payments that are passed through to the holder of the participation interest from the payments made on the underlying debt obligations. The purchaser of a participation interest receives an undivided interest in the underlying debt obligations. The issuers of the underlying debt obligations make interest and principal payments to the intermediary, as an initial purchaser, which are passed through to purchasers in the secondary market, such as a Fund. Mortgage-backed securities are a common type of participation interest. Participation interests may be structured as fixed-, variable- or floating-rate obligations or as zero-coupon, pay-in-kind and step-coupon securities and may be privately placed or publicly offered. See Permissible Fund Investments – Variable- and Floating-Rate Obligations, Permissible Fund Investments – Zero-Coupon, Pay-in-Kind and Step-Coupon Securities and Permissible Fund Investments – Private Placement and Other Restricted Securities for more information.

Loan participations also are a type of participation interest. Loan participations are interests in loans that are administered by a lending bank or agent for a syndicate of lending banks and sold by the bank or syndicate members.

Investing in participation interests is subject to certain risks. Participation interests generally are subject to the credit risk associated with the underlying borrowers. If the underlying borrower defaults, a Fund may be subject to delays, expenses and risks that are greater than those that would have been involved if a Fund had purchased a direct obligation of the borrower. A Fund also may be deemed a creditor of the lending bank or syndicate members and be subject to the risk that the lending bank or syndicate members may become insolvent.

Preferred Stock

Preferred stock represents units of ownership of a corporation that frequently have dividends that are set at a specified rate. Preferred stock has preference over common stock in the payment of dividends and the liquidation of assets. Preferred stock shares some of the characteristics of both debt and equity. Preferred stock ordinarily does not carry voting rights. Most preferred stock is cumulative; if dividends are passed (i.e., not paid for any reason), they accumulate and must be paid before common stock dividends. Participating preferred stock entitles its holders to share in profits above and beyond the declared dividend, along with common shareholders, as distinguished from nonparticipating preferred stock, which is limited to the stipulated dividend. Convertible preferred stock is exchangeable for a given number of shares of common stock and thus tends to be more volatile than nonconvertible preferred stock, which generally behaves more like a fixed income bond. Preferred stock may be privately placed or publicly offered. See Permissible Fund Investments – Private Placement and Other Restricted Securities for more information.

Auction preferred stock (APS) is a type of adjustable-rate preferred stock with a dividend determined periodically in a Dutch auction process by corporate bidders. Shares typically are bought and sold at face values generally ranging from $100,000 to $500,000 per share.

In addition to reinvestment risk if interest rates fall, some specific risks with regard to APS include:

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APS that have experienced a failed auction becomes very limited. If a failed auction were to occur, the shareholder generally would hold his or her shares until the next auction. Should there not be subsequent auctions that “cure” the failed process, the shareholder may: (1) hold the APS in anticipation of a refinancing by the issuer that would cause the APS to be called, or (2) hold securities either indefinitely or in anticipation of the development of a secondary market.

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Early call risk: APS generally is redeemable at any time, usually upon notice, at the issuer’s option, at par plus accrued dividends.

Investing in preferred stock is subject to certain risks. For example, stock market risk is the risk that the value of such stocks, like the broader stock markets, may decline over short or even extended periods. Domestic and foreign stock markets tend to be cyclical, with periods when prices generally rise and periods when prices generally decline. The value of individual stocks will rise and decline based on factors specific to each corporation, such as changes in earnings or management.

Investing in preferred stock also may involve the risks applicable to investing in a particular company. For example, stocks of smaller companies tend to have greater price fluctuations than stocks of larger companies because, among other things, they trade less frequently and in lower volumes, are more susceptible to changes in economic conditions, are more reliant on singular products or services and are more vulnerable to larger competitors. Stocks of these companies may have a higher potential for gains but also are subject to greater risk of loss.

Investing in preferred stock also may involve the risks applicable to investing in a particular industry, such as technology, financial services, consumer goods or natural resources (e.g., oil and gas). To some extent, the prices of stocks tend to move by industry sector. When market conditions favorably affect, or are expected to favorably affect, an industry, the prices of the stocks of companies in that industry tend to rise. Conversely, negative news or a poor outlook for a particular industry can cause the value of those companies’ stock to decline.

Private Placement and Other Restricted Securities

Private placement securities are securities that have been privately placed and are not registered under the 1933 Act. They are eligible for sale only to certain eligible investors. Private placements often may offer attractive opportunities for investment not otherwise available on the open market. Private placement and other “restricted” securities often cannot be sold to the public without registration under the 1933 Act or the availability of an exemption from registration (such as Rules 144 or 144A), or they are “not readily marketable” because they are subject to other legal or contractual delays in or restrictions on resale. Asset-backed securities, common stock, convertible securities, corporate debt securities, foreign securities, low and below investment grade securities, money market instruments, mortgage-backed securities, municipal securities, participation interests, preferred stock and other types of equity and debt instruments may be privately placed or restricted securities.

Private placements typically may be sold only to qualified institutional buyers (or, in the case of the initial sale of certain securities, such as those issued in collateralized debt obligations or collateralized loan obligations, to accredited investors (as defined in Rule 501(a) under the 1933 Act), or in a privately negotiated transaction or to a limited number of purchasers, or in limited quantities after they have been held for a specified period of time and other conditions are met pursuant to an exemption from registration.

advisable to do so or it may be able to sell such securities only at prices lower than if such securities were more widely held. At times, it also may be more difficult to determine the fair value of such securities for purposes of computing a Fund’s net asset value due to the absence of a trading market.

Real Estate Investment Trusts and Master Limited Partnerships

REITs are entities that either own properties or make construction or mortgage loans and also may include operating or finance companies. An equity REIT generally holds equity positions in real estate and seeks to provide its shareholders with income from the leasing of its properties and with capital gains from any sales of properties. A mortgage REIT generally specializes in lending money to owners of properties and passes through any interest income it may earn to its shareholders.

Partnership units of real estate and other types of companies sometimes are organized as master limited partnerships in which ownership interests are publicly traded. Master limited partnerships often own several properties or businesses (or directly own interests) that are related to real estate development and the oil and gas industries, but they also may finance motion pictures, research and development and other projects.

REITs are subject to certain risks associated with direct ownership of real estate, including, for example, declines in the value of real estate, risks related to general and local economic conditions, overbuilding and increased competition, increases in property taxes and operating expenses, and variations in rental income. REITs also may be subject to interest rate risk. In general, increases in interest rates will decrease the value of high-yield securities and increase the costs of obtaining financing, which could decrease the value of a REIT’s investments. In addition, equity REITs may be affected by changes in the value of the underlying property owned by the REITs, while mortgage REITs may be affected by the quality of credit extended. Both equity and mortgage REITs are dependent upon management skills. REITs also may be subject to heavy cash flow dependency, defaults by borrowers, and the possibility of failing to qualify for preferential tax treatment under the Code, which could adversely affect dividend payments. REITs also may not be diversified.

Investing in master limited partnerships generally is subject to the risks applicable to investing in a partnership as opposed to a corporation, which may include fewer protections afforded to investors. Additional risks include those associated with the specific industries in which a master limited partnership invests, such as the risks associated with investing in the real estate or oil and gas industries.

Repurchase Agreements

Repurchase agreements are agreements under which a Fund acquires a security for a relatively short period of time subject to the obligation of a seller to repurchase and a Fund to resell such security at a fixed time and price (representing a Fund’s cost plus interest). Repurchase agreements also may be viewed as loans made by a Fund that are collateralized by the securities subject to repurchase. A Fund typically will enter into repurchase agreements only with commercial banks, registered broker/dealers and the Fixed Income Clearing Corporation. Such transactions are monitored to ensure that the value of the underlying securities will be at least equal at all times to the total amount of the repurchase obligation, including any accrued interest. Repurchase agreements generally are subject to counterparty risk.

proceedings against it, a Fund may incur delays in or be prevented from liquidating the underlying securities and could experience losses, including the possible decline in value of the underlying securities during the period in which the Fund seeks to enforce its rights thereto, possible subnormal levels of income or lack of access to income during such time, as well as the costs incurred in enforcing the Fund’s rights. For example, if a Fund enters into a repurchase agreement with a broker that becomes insolvent, it is possible for the Securities Investor Protection Corporation (SIPC) to institute a liquidation proceeding in federal court against the broker counterparty which could lead to a foreclosure by SIPC of the underlying securities or SIPC may stay, or preclude, the Fund’s ability under contract to terminate the repurchase agreement.

Reverse Repurchase Agreements

Reverse repurchase agreements are agreements under which a Fund sells a security subject to the obligation of a buyer to resell and a Fund to repurchase such security at a fixed time and price. Reverse repurchase agreements also may be viewed as borrowings made by a Fund.

Reverse repurchase agreements involve the risk that the market value of the securities a Fund is obligated to repurchase under the agreement may decline below the repurchase price. In the event the buyer of securities under a reverse repurchase agreement files for bankruptcy or becomes insolvent, a Fund’s use of proceeds of the agreement may be restricted pending a determination by the other party, or its trustee or receiver, whether to enforce a Fund’s obligation to repurchase the securities. In addition, reverse repurchase agreements are techniques involving leverage, and are subject to asset coverage requirements. Under the requirements of the 1940 Act, a Fund is required to maintain an asset coverage (including the proceeds of the borrowings) of at least 300% of all borrowings.

Stripped Securities

Stripped securities are securities that evidence ownership in either the future interest or principal payments on an instrument. There are many different types and variations of stripped securities. For example, Separate Trading of Registered Interest and Principal Securities (STRIPS) can be component parts of a U.S. Treasury security where the principal and interest components are traded independently through DTC, a clearing agency registered pursuant to Section 17A of the 1934 Act and created to hold securities for its participants, and to facilitate the clearance and settlement of securities transactions between participants through electronic computerized book-entries, thereby eliminating the need for physical movement of certificates. Treasury Investor Growth Receipts (TIGERs) are U.S. Treasury securities stripped by brokers. Stripped mortgage-backed securities, or SMBS, also can be issued by the U.S. Government or its agencies. Stripped securities may be structured as fixed-, variable- or floating-rate obligations. See Permissible Fund Investments – Variable- and Floating-Rate Obligations for more information.

SMBS usually are structured with two or more classes that receive different proportions of the interest and principal distributions from a pool of mortgage-backed assets. Common types of SMBS will be structured so that one class receives some of the interest and most of the principal from the mortgage-backed assets, while another class receives most of the interest and the remainder of the principal.

Investing in stripped securities is subject to certain risks. If the underlying obligations experience greater than anticipated prepayments of principal, a Fund may fail fully to recoup its initial investment in such securities. The market value of the class consisting primarily or entirely of principal payments can be especially volatile in response to changes in interest rates. The rates of return on a class of SMBS that receives all or most of the interest are generally higher than prevailing market rates of return on other mortgage-backed obligations because their cash flow patterns also are volatile and there is a greater risk that the initial investment will not be recouped fully.

U.S. Government and Related Obligations

U.S. Government obligations include U.S. Treasury obligations and securities issued or guaranteed by various agencies of the U.S. Government or by various instrumentalities which have been established or sponsored by the U.S. Government. U.S. Treasury obligations and securities issued or guaranteed by various agencies of the U.S. Government differ in their interest rates, maturities and time of issuance, as well as with respect to whether they are guaranteed by the U.S. Government. U.S. Government and related obligations may be structured as fixed-, variable- or floating-rate obligations. See Permissible Fund Investments – Variable- and Floating-Rate Obligations for more information.

U.S. Government obligations also include senior unsecured debt securities issued between October 14, 2008 and June 30, 2009 by eligible issuers (including U.S. depository institutions insured by the FDIC (and certain affiliates), U.S. bank holding companies and certain U.S. savings and loan holding companies) that are guaranteed by the FDIC under its Temporary Liquidity Guarantee Program (the TLGP). The FDIC’s guarantee under the TLGP will expire upon the earlier of (i) maturity of such security or (ii) June 30, 2012. It is the view of the FDIC and the staff of the Securities and Exchange Commission that any debt security that is guaranteed by the FDIC under the TLGP and that has a maturity that ends on or before June 30, 2012 would be a security exempt from registration under Section 3(a)(2) of the 1933 Act because such security would be fully and unconditionally guaranteed by the FDIC.

Investing in securities guaranteed under the TLGP is subject to certain risks. Given that there is a limited track record for securities guaranteed under the TLGP, it is uncertain whether such securities will continue to trade in line with recent experience in relation to treasury and government agency securities in terms of yield spread and the volatility of such spread and it is uncertain whether the secondary market for such securities will continue to be liquid. The TLGP is a new program that is subject to change. In order to collect from the FDIC under the TLGP, a claims process must be followed. Failure to follow the claims process could result in a loss to the right to payment under the guarantee. In addition, guarantee payments by the FDIC under the TLGP may be delayed.

Investing in U.S. Government and related obligations is subject to certain risks. While U.S. Treasury obligations are backed by the “full faith and credit” of the U.S. Government, securities issued or guaranteed by federal agencies and U.S. Government-sponsored instrumentalities may or may not be backed by the full faith and credit of the U.S. Government. These securities may be supported by the ability to borrow from the U.S. Treasury or only by the credit of the issuing agency or instrumentality and, as a result, may be subject to greater credit risk than securities issued or guaranteed by the U.S. Treasury. Obligations of U.S. Government agencies, authorities, instrumentalities and sponsored enterprises historically have involved limited risk of loss of principal if held to maturity. However, no assurance can be given that the U.S. Government would provide financial support to any of these entities if it is not obligated to do so by law.

Variable- and Floating-Rate Obligations

Variable- and floating-rate obligations provide for periodic adjustments in the interest rate and, under certain circumstances, varying principal amounts. Unlike a fixed interest rate, a variable, or floating, rate is one that rises and declines based on the movement of an underlying index of interest rates and may pay interest at rates that are adjusted periodically according to a specified formula. Asset-backed securities, bank obligations, convertible securities, corporate debt securities, foreign securities, low and below investment grade securities, money market instruments, mortgage-backed securities, municipal securities, participation interests, stripped securities, U.S. Government and related obligations and other types of debt instruments may be structured as variable- and floating-rate obligations.

obligations also may be subject to interest rate and credit risks. Changes in interest rates can affect the rate of return on such obligations. If an issuer of a variable- or floating-rate obligation defaults, a Fund could sustain a loss to the extent of such default.

Warrants and Rights

Warrants and rights are types of securities that give a holder a right to purchase shares of common stock. Warrants usually are issued together with a bond or preferred stock and entitle a holder to purchase a specified amount of common stock at a specified price typically for a period of years. Rights usually have a specified purchase price that is lower than the current market price and entitle a holder to purchase a specified amount of common stock typically for a period of only weeks. Warrants may be used to enhance the marketability of a bond or preferred stock.

Warrants and rights may be subject to the risk that the securities could lose value. There also is the risk that the potential exercise price may exceed the market price of the warrants or rights, such as when there is no movement in the market price or the market price of such securities declines.

When-Issued, Delayed Delivery and Forward Commitment Transactions

When-issued, delayed delivery and forward commitment transactions involve the purchase or sale of securities by a Fund, with payment and delivery taking place in the future. When engaging in when-issued, delayed delivery and forward commitment transactions, a Fund typically will hold cash or liquid securities in a segregated account in an amount equal to or greater than the purchase price. The payment obligation and, if applicable, the interest rate that will be received on the securities, are fixed at the time that a Fund agrees to purchase the securities. A Fund generally will enter into when-issued, delayed delivery and forward commitment transactions only with the intention of completing such transactions. However, the Adviser may determine not to complete a transaction if it deems it appropriate. In such cases, a Fund may realize short-term gains or losses.

When-issued, delayed delivery and forward commitment transactions involve the risks that the securities purchased may fall in value by the time they actually are issued or that the other party may fail to honor the contract terms. A Fund that invests in delayed delivery securities may rely on a third party to complete the transaction. Failure by a third party to deliver a security purchased on a delayed delivery basis may result in a financial loss to a Fund or the loss of an opportunity to make an alternative investment.

Zero-Coupon, Pay-in-Kind and Step-Coupon Securities

Zero-coupon, pay-in-kind and step-coupon securities are types of debt instruments that do not necessarily make payments of interest in fixed amounts or at fixed intervals. Asset-backed securities, convertible securities, corporate debt securities, foreign securities, low and below investment grade securities, mortgage-backed securities, municipal securities, participation interests, stripped securities, U.S. Government and related obligations and other types of debt instruments may be structured as zero-coupon, pay-in-kind and step-coupon securities.

Zero-coupon securities do not pay interest on a current basis but instead accrue interest over the life of the security. These securities include, among others, zero-coupon bonds, which either may be issued at a discount by a corporation or government entity or may be created by a brokerage firm when it strips the coupons from a bond or note and then sells the bond or note and the coupon separately. This technique is used frequently with U.S. Treasury bonds, and zero-coupon securities are marketed under such names as CATS (Certificate of Accrual on Treasury Securities), TIGERs or STRIPS. Zero-coupon bonds also are issued by municipalities. Buying a municipal zero-coupon bond frees its purchaser of the obligation to pay regular federal income tax on imputed interest, since the interest is exempt for regular federal income tax purposes. Zero-coupon certificates of deposit and zero-coupon mortgages are generally structured in the same fashion as zero-coupon bonds; the certificate of deposit holder or mortgage holder receives face value at maturity and no payments until then.

Pay-in-kind securities normally give the issuer an option to pay cash at a coupon payment date or to give the holder of the security a similar security with the same coupon rate and a face value equal to the amount of the coupon payment that would have been made.

Step-coupon securities trade at a discount from their face value and pay coupon interest. The coupon rate is paid according to a schedule for a series of periods, typically lower for an initial period and then increasing to a higher coupon rate thereafter. The discount from the face amount or par value depends on the time remaining until cash payments begin, prevailing interest rates, liquidity of the security and the perceived credit quality of the issue.

Zero-coupon, step-coupon and pay-in-kind securities holders generally have substantially all the rights and privileges of holders of the underlying coupon obligations or principal obligations. Holders of these securities have the right upon default on the underlying coupon obligations or principal obligations to proceed directly and individually against the issuer and are not required to act in concert with other holders of such securities.

Investing in zero-coupon, pay-in-kind and step-coupon securities is subject to certain risks, including that market prices of zero-coupon, pay-in-kind and step-coupon securities generally are more volatile than the prices of securities that pay interest periodically and in cash, and are likely to respond to changes in interest rates to a greater degree than other types of debt securities.

Because zero-coupon securities bear no interest, they are volatile. Since zero-coupon bondholders do not receive interest payments, zero-coupon securities fall more dramatically than bonds paying interest on a current basis when interest rates rise. However, when interest rates fall, zero-coupon securities rise more rapidly in value than interest paying bonds.

Borrowings

Each Fund has a fundamental policy with respect to borrowing that can be found under the heading About the Funds’ Investments – Fundamental and Non-Fundamental Investment Policies . Specifically, each Fund may not borrow money or issue senior securities except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any exemptive relief obtained by the Funds. In general, pursuant to the 1940 Act, a Fund may borrow money only from banks in an amount not exceeding 33 1/3% of its total assets (including the amount borrowed) less liabilities (other than borrowings). Any borrowings that come to exceed this amount must be reduced within three days (not including Sundays and holidays) to the extent necessary to comply with the 33 1/3% limitation.

The Funds participate in a committed line of credit (Line of Credit). Any advance under the Line of Credit is contemplated primarily for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely sale of portfolio securities.

Pursuant to an exemptive order from the SEC, a Fund may, subject to certain conditions, borrow money from or lend money to other funds in the Columbia Funds Family or any other registered investment company advised by the Adviser or its affiliates, for temporary emergency purposes in order to facilitate redemption requests, or for other purposes consistent with Fund investment policies and restrictions. All loans are set at an interest rate between the rates charged on overnight repurchase agreements and short-term bank loans.

Short Sales

will deposit in escrow in a separate account with the custodian an equal amount of the securities sold short or securities convertible into or exchangeable for such securities. A Fund can close out its short position by purchasing and delivering an equal amount of the securities sold short, rather than by delivering securities already held by a Fund, because a Fund might want to continue to receive interest and dividend payments on securities in its portfolio that are convertible into the securities sold short.

Short sales “against the box” entail many of the same risks and considerations described above regarding short sales not “against the box.” However, when a Fund sells short “against the box” it typically limits the amount of securities that it has leveraged. A Fund’s decision to make a short sale “against the box” may be a technique to hedge against market risks when the Adviser believes that the price of a security may decline, causing a decline in the value of a security owned by a Fund or a security convertible into or exchangeable for such security. In such case, any future losses in a Fund’s long position would be reduced by a gain in the short position. The extent to which such gains or losses in the long position are reduced will depend upon the amount of securities sold short relative to the amount of the securities a Fund owns, either directly or indirectly, and, in the case where a Fund owns convertible securities, changes in the investment values or conversion premiums of such securities. Short sales may have adverse tax consequences to a Fund and its shareholders.

Subject to its fundamental and non-fundamental investment policies, a Fund may engage in short sales that are not “against the box,” which are sales by a Fund of securities or commodity futures contracts that it does not own in hopes of purchasing the same security at a later date at a lower price. The technique is also used to protect a profit in a long-term position in a security or commodity futures contract. To make delivery to the buyer, a Fund must borrow or purchase the security. If borrowed, a Fund is then obligated to replace the security borrowed from the third party, so a Fund must purchase the security at the market price at a later time. If the price of the security has increased during this time, then a Fund will incur a loss equal to the increase in price of the security from the time of the short sale plus any premiums and interest paid to the third party. (Until the security is replaced, a Fund is required to pay to the lender amounts equal to any dividends or interest which accrue during the period of the loan. To borrow the security, a Fund also may be required to pay a premium, which would increase the cost of the security sold. The proceeds of the short sale will be retained by the broker, to the extent necessary to meet the margin requirements, until the short position is closed out.)

Short sales by a Fund that are not made “against the box” create opportunities to increase a Fund’s return but, at the same time, involve specific risk considerations and may be considered a speculative technique. Because a Fund in effect profits from a decline in the price of the securities sold short without the need to invest the full purchase price of the securities on the date of the short sale, a Fund’s NAV per share tends to increase more when the securities it has sold short decrease in value, and to decrease more when the securities it has sold short increase in value, than if it had not engaged in such short sales. The amount of any gain will be decreased, and the amount of any loss increased, by the amount of any premium, dividends or interest a Fund may be required to pay in connection with the short sale. Short sales could potentially involve unlimited loss, as the market price of securities sold short may continually increase, although a Fund can mitigate any such losses by replacing the securities sold short. Under adverse market conditions, a Fund might have difficulty purchasing securities to meet its short sale delivery obligations, and might have to sell portfolio securities to raise the capital necessary to meet its short sale obligations at a time when fundamental investment considerations would not favor such sales. There is also the risk that the third party to the short sale may fail to honor its contract terms, causing a loss to a Fund.

A Fund’s successful use of short sales also will be subject to the ability of the Adviser to predict movements in the directions of the relevant market. A Fund therefore bears the risk that the Adviser will incorrectly predict future price directions. In addition, if a Fund sells a security short, and that security’s price goes up, a Fund will have to make up the margin on its open position (i.e., purchase more securities on the market to cover the position). It may be unable to do so and thus its position may not be closed out. There can be no assurance that a Fund will not incur significant losses in such a case.

In the view of the SEC, a short sale involves the creation of a “senior security” as such term is defined in the 1940 Act, unless the sale is “against the box” and the securities sold short are placed in a segregated account (not with the broker), or unless a Fund’s obligation to deliver the securities sold short is “covered” by placing in a segregated account (not with the broker) cash, U.S. Government securities or other liquid debt or equity securities in an amount equal to the difference between the market value of the securities sold short at the time of the short sale and any such collateral required to be deposited with a broker in connection with the sale (not including the proceeds from the short sale), which difference is adjusted daily for changes in the value of the securities sold short. The total value of the cash, U.S. Government securities or other liquid debt or equity securities deposited with the broker and otherwise segregated may not at any time be less than the market value of the securities sold short at the time of the short sale.

Lending Securities

Securities lending refers to the lending of a Fund’s portfolio securities. Subject to its investment policies described above and in the prospectuses, a Fund may make secured loans of its portfolio securities to broker/dealers and other institutional investors. Securities loans by a Fund are made pursuant to agreements that require that loans be secured continuously by collateral in cash. A Fund retains all or a portion of the income received on investment of cash collateral. A borrower will pay to a Fund an amount equal to any dividends or interest received on securities loaned, but the borrower typically will receive a portion of the income earned on investments of cash collateral. Although voting rights, or rights to consent, with respect to loaned securities pass to a borrower, a Fund retains the right to call the loans at any time on reasonable notice, and may do so in order to vote upon matters affecting, or to sell, the loaned securities.

A Fund typically invests the cash collateral it receives in connection with its securities lending program directly or indirectly in high quality, short-term investments. A Fund may invest some or all of such cash collateral in one or more pooled investment vehicles, including, among other vehicles, money market funds managed by a Fund’s securities lending agent or its affiliates. The securities lending agent shares in any income resulting from the investment of such cash collateral, and an affiliate of the securities lending agent receives asset-based fees for the management of such pooled investment vehicles, which may create a conflict of interest between the securities lending agent (or its affiliate) and a Fund with respect to the management of such cash collateral.

Engaging in securities lending is subject to certain risks, including counterparty risk, which is the risk that the counterparty to a transaction could default. There also is a risk of possible delay in the recovery of loaned securities or possible loss of rights in the collateral if a borrower fails financially.

Portfolio Turnover

A change in the securities held by a Fund is known as “portfolio turnover.” High portfolio turnover ( e.g. , over 100%) involves correspondingly greater expenses to the Fund, including brokerage commissions or dealer mark-ups and other transaction costs on the sale of securities and reinvestments in other securities. Such sales may also result in adverse tax consequences to a Fund’s shareholders. The trading costs and tax effects associated with portfolio turnover may adversely affect the Fund’s performance.

For each Fund’s portfolio turnover rate, see the Fees and Expenses of the Fund/Portfolio – Portfolio Turnover section in the prospectuses for that Fund.

Disclosure of Portfolio Information

Distributor or any affiliated person of a Columbia Fund, on the other. These policies and procedures provide that Columbia Funds portfolio holdings information generally may not be disclosed to any party prior to the earlier of: (i) the business day next following the posting of such information on the Columbia Funds’ website, if applicable, or (ii) the time a Columbia Fund discloses the information in a publicly available SEC filing required to include such information. Certain limited exceptions that have been approved consistent with the policies and procedures are described below. The Board is updated as needed regarding compliance with these policies and procedures. The policies and procedures prohibit the Adviser and the Columbia Funds’ other service providers from entering into any agreement to disclose Columbia Fund portfolio holdings information in exchange for any form of consideration. These policies and procedures apply to all categories of Columbia Funds and include some variations tailored to the different categories of Columbia Funds. Accordingly, some of the provisions described below do not apply to the Columbia Fund(s) covered by this SAI. The Adviser also has adopted policies and procedures to monitor for compliance with these portfolio holdings disclosure policies and procedures.

Public Disclosures

The Columbia Funds’ portfolio holdings are currently disclosed to the public through required filings with the SEC and on the Columbia Funds’ website. This information is available on the Columbia Funds’ website as described below.

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For equity, convertible, balanced and asset allocation Columbia Funds, other than small cap and specialty Columbia Funds, a complete list of portfolio holdings as of a month-end is posted approximately 15 calendar days after such month-end.

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For small cap and specialty Columbia Funds and those Columbia Funds that are sub-advised by Marsico and Brandes, subadvisers to certain Columbia Funds, a complete list of portfolio holdings as of a month-end is posted approximately 30 calendar days after such month-end.

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For fixed-income funds, a complete list of portfolio holdings as of a calendar quarter-end is posted approximately 30 calendar days after such quarter-end.

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For Columbia Funds that are money market funds, a complete list of portfolio holdings as of a month-end is posted approximately 5 business days after such month-end.

Certain Columbia Funds also disclose their largest holdings, as a percent of the market values of the Columbia Funds’ portfolios, as of a month-end on their website, generally within 15 calendar days after such month-end. In general, the equity Columbia Funds post their largest 10-15 holdings, the balanced Columbia Funds post their largest 5 equity holdings, and certain fixed income Columbia Funds post their largest 5-15 holdings (by security or issuer).

The Adviser may also disclose more current portfolio holdings information as of specified dates on the Columbia Funds’ website.

The scope of the information that is made available on the Columbia Funds’ website pursuant to the Columbia Funds’ policies relating to a Columbia Fund’s portfolio may change from time to time without prior notice.

The Columbia Funds file their portfolio holdings with the SEC for each fiscal quarter on Form N-CSR (with respect to each annual period and semi-annual period) and Form N-Q (with respect to the first and third quarters of each Columbia Fund’s fiscal year). Shareholders may obtain each Columbia Fund’s Form N-CSR and N-Q filings on the SEC’s website at www.sec.gov, a link to which is provided on the Columbia Funds’ website. In addition, each Columbia Fund’s Form N-CSR and N-Q filings may be reviewed and copied at the SEC’s public reference room in Washington, D.C. You may call the SEC at 202.551.8090 for information about the SEC’s website or the operation of the public reference room.

The Columbia Funds, the Adviser and their affiliates may include portfolio holdings information that already has been made public through a website posting or SEC filing in marketing literature and other communications to shareholders, advisers or other parties, provided that the information is disclosed no earlier than the business day after the date the information is disclosed publicly on the Columbia Funds’ website or no earlier than the time a Columbia Fund files such information in a publicly available SEC filing required to include such information.

Other Disclosures

The Columbia Funds’ policies and procedures provide that no disclosures of the Columbia Funds’ portfolio holdings may be made prior to the portfolio holdings information being made public unless (i) the Columbia Funds have a legitimate business purpose for making such disclosure, (ii) the Columbia Funds’ President authorizes such non-public disclosure of information, and (iii) the party receiving the non-public information enters into an appropriate confidentiality agreement or is otherwise subject to a confidentiality obligation.

In determining the existence of a legitimate business purpose for making portfolio disclosures, the following factors, among others, are considered: (i) any prior disclosure must be consistent with the anti-fraud provisions of the federal securities laws and the fiduciary duties of the Adviser; (ii) any conflicts of interest between the interests of Columbia Fund shareholders, on the one hand, and those of the Adviser, the Distributor or any affiliated person of a Columbia Fund, on the other; and (iii) any prior disclosure to a third party, although subject to a confidentiality agreement, would not make conduct lawful that otherwise is unlawful.

In addition, the Columbia Funds periodically disclose their portfolio information on a confidential basis to various service providers that require such information to assist the Columbia Funds with their day-to-day business affairs. In addition to the Adviser and its affiliates, these service providers include each Columbia Fund’s subadviser(s) (if any), the Columbia Funds’ custodian, sub-custodians independent registered public accounting firm, legal counsel, financial printers, proxy solicitor and proxy voting service provider, as well as ratings agencies that maintain ratings on certain Columbia Funds. These service providers are required to keep such information confidential, and are prohibited from trading based on the information or otherwise using the information except as necessary in providing services to the Columbia Funds. The Columbia Funds also may disclose portfolio holdings information to broker/dealers and certain other entities in connection with potential transactions and management of the Columbia Funds, provided that reasonable precautions, including limitations on the scope of the portfolio holdings information disclosed, are taken to avoid any potential misuse of the disclosed information.

The Columbia Funds currently have ongoing arrangements with certain approved recipients with respect to the disclosure of portfolio holdings information prior to such information being made public. Portfolio holdings information disclosed to such recipients is current as of the time of its disclosure, is disclosed to each recipient solely for purposes consistent with the services described below and has been authorized by the Columbia Funds’ President. These special arrangements are described in the table below.

Ongoing Portfolio Holdings Disclosure Arrangements


IDENTITY OF RECIPIENT	COMPENSATION/ CONSIDERATION RECEIVED	CONDITIONS/RESTRICTIONS ON USE OF INFORMATION	FREQUENCY OF DISCLOSURE
Standard & Poor’s	None	Use to maintain ratings for certain money market funds.	Weekly

InvestorTools, Inc.	None	Access granted solely for the purpose of testing back office conversion of trading systems.	Real time


IDENTITY OF RECIPIENT	COMPENSATION/ CONSIDERATION RECEIVED	CONDITIONS/RESTRICTIONS ON USE OF INFORMATION	FREQUENCY OF DISCLOSURE
ING Insurance Company	None	Access granted for specific Columbia Funds for ING’s creation of client/shareholder materials. ING may not distribute materials until the holdings information is made public.	Quarterly

Glass-Lewis & Co.	None	Access in connection with testing the firm’s proxy services.	Daily

CMS Bondedge	None	Access when assisting in resolving technical difficulties with application used by the Adviser’s Fixed Income Portfolio Management team as an analytical and trading tool.	Ad hoc

Linedata Services, Inc.	None	Access when assisting in resolving technical difficulties with the software for the LongView Trade Order Management System.	Ad hoc

JP Morgan	None	Access to provide the Adviser’s High Yield portfolio management team with peer group analysis reports for purposes of analyzing the portfolio.	Monthly

Malaspina Communications	None	Use to facilitate writing, publishing and mailing Columbia Fund shareholder reports and communications including shareholder letters and management’s discussion of Columbia Fund performance.	Quarterly

Evare LLP	None	Use for standardizing and reformatting data according to the Adviser’s specifications for use in the reconciliation process.	Daily

FactSet Research Systems, Inc.	None	Use for provision of quantitative analytics, charting and fundamental data to the Adviser and Marsico, subadviser to certain Columbia Funds.	Daily

RR Donnelley/WE Andrews	None	Access as printers for the Columbia Funds’ prospectuses, supplements, SAIs, fact sheets and brochures.	Monthly


IDENTITY OF RECIPIENT	COMPENSATION/ CONSIDERATION RECEIVED	CONDITIONS/RESTRICTIONS ON USE OF INFORMATION	FREQUENCY OF DISCLOSURE
Merrill Corporation	None	Use to provide fulfillment of the Columbia Funds’ prospectuses, supplements, SAIs and sales materials.	Monthly

Citigroup	None	Access when assisting in resolving technical difficulties with Yield Book, an analytic software program that the Adviser uses to perform ongoing risk analysis and management of certain fixed income Columbia Funds and fixed income separately managed accounts.	Daily

Institutional Shareholder Services (ISS)	None	Proxy voting administration and research on proxy matters utilized by MacKay Shields LLC, subadviser to certain Columbia Funds.	Daily

Cogent Consulting LLC	None	Utilized by Marsico, subadviser to certain Columbia Funds, to facilitate the evaluation of commission rates and to provide flexible commission reporting.	Daily

Moody’s	None	Ongoing portfolio surveillance for ratings it maintains on certain money market funds.	Monthly

Kynex	None	Use to provide portfolio attribution reports.	Daily

Bowne & Co.	None	Use for printing of the following materials: prospectuses, supplements and SAIs.	Monthly/quarterly

Bloomberg	None	Use for portfolio analytics.	Daily

Barclays Point	None	Use for analytics including risk and attribution assessment.	Daily

Broadridge Financial Solutions, Inc.	None	Proxy voting and research utilized by Marsico, subadviser to certain Columbia Funds.	Daily

Investment Technology Group, Inc. (ITG, formerly known as Macgregor)	None	Order management system utilized by Marsico, subadviser to certain Columbia Funds, that stores trading data and is used for trading and compliance purposes.	Ad hoc


IDENTITY OF RECIPIENT	COMPENSATION/ CONSIDERATION RECEIVED	CONDITIONS/RESTRICTIONS ON USE OF INFORMATION	FREQUENCY OF DISCLOSURE
Advent/AXP	None	Portfolio accounting system utilized by Marsico, subadviser to certain Columbia Funds, for both portfolio accounting and internal recordkeeping purposes.	Ad hoc

Investment Technology Group, Inc. (ITG, formerly known as Plexus Group)	None	Evaluation and assessment of trading activity, execution and practices by the Adviser.	Five days after quarter-end

BANA and State Street	None	Credit analysis performed by lenders.	Ad hoc

State Street	None	Use to provide custodian services.	Real time

Lipper	None	Use to create metrics for board and executive management reporting, product and marketing analysis, and fund performance.	Daily

Morningstar, Inc.	None	Use for independent research and ranking of Columbia Funds.	Daily

INVESTMENT ADVISORY AND OTHER SERVICES

The Adviser and Investment Advisory Services

Columbia Management Investment Advisers, LLC (formerly, RiverSource Investments, LLC) (the Adviser) is the investment adviser and administrator of the Funds. The Adviser is a wholly-owned subsidiary of Ameriprise Financial. Ameriprise Financial is located at 1099 Ameriprise Financial Center, Minneapolis, MN 55474. The Adviser is located at 100 Federal Street, Boston, MA 02110. Prior to May 1, 2010, Columbia Management Advisors, LLC (the Previous Adviser), a wholly-owned subsidiary of Bank of America, was the Funds’ investment adviser.

Services Provided

Under the Investment Management Services Agreement, the Adviser has contracted to furnish the Funds with investment research and advice. For these services, the Funds pay a monthly fee to the Adviser based on the average of the daily closing value of the total net assets of the Funds for such month. Under the Investment Management Services Agreement, any liability of the Adviser to the Trust, the Funds and/or their shareholders are limited to situations involving the Adviser’s own willful misfeasance, bad faith, negligence or reckless disregard of its duties.

The Investment Management Services Agreement may be terminated with respect to the Funds at any time on 60 days’ written notice by the Adviser or by the Trustees of the Trust or by a vote of a majority of the outstanding voting securities of the Funds. The Investment Management Services Agreement will automatically terminate upon any assignment thereof and shall continue in effect for two years from May 1, 2010 and thereafter shall continue from year to year only so long as such continuance is approved at least annually (i) by the Trustees of the Trust or by a vote of a majority of the outstanding voting securities of the Funds and (ii) by vote of a majority of the Trustees who are not interested persons (as such term is defined in the 1940 Act) of the Adviser or the Trust, cast in person at a meeting called for the purpose of voting on such approval.

The Adviser pays all compensation of the Trustees and officers of the Trust who are employees of the Adviser, except for the Chief Compliance Officer, a portion of whose salary is paid by the Columbia Funds. For all Funds, except to the extent expressly assumed by the Adviser and except to the extent required by law to be paid or reimbursed by the Adviser, the Adviser does not have a duty to pay any Fund operating expense incurred in the organization and operation of the Fund, including, but not limited to, auditing, legal, custodial, investor servicing and shareholder reporting expenses. The Trust pays the cost of printing and mailing Fund prospectuses to shareholders. The Adviser, at its own expense, provides office space, facilities and supplies, equipment and personnel for the performance of its functions under the Funds’ Investment Management Services Agreement.

Advisory Fee Rates and Fees Paid

The Funds pay the Adviser an annual fee for its investment advisory services, as set forth in the Investment Management Services Agreement, and as shown in the section entitled Fees and Expenses of the Fund/Portfolio – Annual Fund Operating Expenses in each Fund’s prospectuses. The fee is calculated as a percentage of the average daily net assets of each Fund and is paid monthly. The Adviser also may pay amounts from its own assets to the Distributor and/or to selling and/or servicing agents for services they provide.

The Adviser receives a monthly investment advisory fee based on each Fund’s average daily net assets at the following annual rates:


Fund	First $500 million		$500 million to $1 billion		$1 billion to $1.5 billion		$1.5 billion to $3 billion		$3 billion to $6 billion		Over $6 billion
Columbia Total Return Bond Fund	0.40	%	0.35	%	0.32	%	0.29	%	0.28	%	0.27	%


Fund	First $500 million		Over $500 million
Columbia Short Term Municipal Bond Fund	0.30	%	0.25	%


Fund	First $500 million		$500 million to $1 billion		$1 billion to $1.5 billion		Over $1.5 billion
Columbia High Income Fund	0.55	%	0.52	%	0.49	%	0.46	%


Fund	All Assets
Corporate Bond Portfolio	0.00	%
Mortgage- and Asset-Backed Portfolio	0.00	%
Columbia Short Term Bond Fund	0.30	%

The Previous Adviser received fees from the Funds for its services as reflected in the following chart, which shows the advisory fees paid to the Previous Adviser and the advisory fees waived/reimbursed by the Previous Adviser, where applicable, for the three most recently completed fiscal years.

Advisory Fees Paid by the Funds


Fund	Fiscal Year Ended March 31, 2010	Fiscal Year Ended March 31, 2009		Fiscal Year Ended March 31, 2008
Corporate Bond Portfolio
Advisory Fee Paid to the Previous Adviser			—		—
Amount Waived by the Previous Adviser			—		—
Amount Reimbursed by the Previous Adviser			—		—

Mortgage- and Asset-Backed Portfolio
Advisory Fee Paid to the Previous Adviser			—		—
Amount Waived by the Previous Adviser			—		—
Amount Reimbursed by the Previous Adviser			—		—

Short Term Bond Fund
Advisory Fee Paid to the Previous Adviser		$	3,615,919	$	2,820,376
Amount Waived by the Previous Adviser		$	221,792	$	188,025
Amount Reimbursed by the Previous Adviser			—		—

Total Return Bond Fund
Advisory Fee Paid to the Previous Adviser		$	5,302,451	$	6,392,539
Amount Waived by the Previous Adviser			—		—
Amount Reimbursed by the Previous Adviser			—		—

Short Term Municipal Bond Fund
Advisory Fee Paid to the Previous Adviser		$	2,263,618	$	1,244,272
Amount Waived by the Previous Adviser			—		—
Amount Reimbursed by the Previous Adviser		$	602,386	$	470,889

High Income Fund
Advisory Fee Paid to the Previous Adviser		$	1,251,540	$	351,545	*
Amount Waived by the Previous Adviser			—		—
Amount Reimbursed by the Previous Adviser			—		—

Until February 28, 2008, the Fund operated as a “Feeder Fund” and invested all or substantially all of its assets in a corresponding Master Portfolio that was a series of Columbia Funds Master Investment Trust, LLC. For the period April 1, 2007 to February 27, 2008, Columbia High Income Master Portfolio paid $6,040,994 in advisory fees, none of which was waived or reimbursed by the Previous Adviser.

Portfolio Manager(s)

The following provides additional information about the portfolio manager(s) of the Adviser who are responsible for making the day-to-day investment decisions for the Funds. As described in the Management of the Fund/Portfolio – Primary Service Providers section of each Fund’s prospectuses, the portfolio manager(s) of the Adviser who are responsible for the Funds are:

Portfolio Manager(s) of the Adviser


Portfolio Manager		Fund
Leonard Aplet		Short Term Bond Fund

James D’Arcy		Short Term Municipal Bond Fund

Gregory Scott Liechty		Short Term Bond Fund

Carl Pappo		Corporate Bond Portfolio Total Return Bond Fund

Alexander D. Powers		Total Return Bond Fund

Lee Reddin		Mortgage- and Asset-Backed Portfolio

Scott Schroepfer		Total Return Bond Fund

Ronald Stahl		Short Term Bond Fund

Michael Zazzarino		Mortgage- and Asset-Backed Portfolio Total Return Bond Fund

Compensation of Legacy Columbia Management Advisors, LLC Portfolio Managers

This section describes the compensation structure of the portfolio managers who were associates of the Previous Adviser prior to May 1, 2010.

Compensation for these portfolio managers is typically paid in the form of salary, bonus, stock options, restricted stock and notional investments through an incentive plan, the value of which is measured by reference to the performance of the Columbia Funds in which the account is invested. The bonus for these portfolio managers is variable and generally is based on (1) an evaluation of the portfolio manager’s investment performance and (2) the results of a peer and/or management review of the portfolio manager, which takes into account skills and attributes such as team participation, investment process, communication and professionalism. In evaluating investment performance, the Adviser generally considers the one, three and five year performance of mutual funds and other accounts managed by the portfolio manager relative to the benchmarks and peer groups noted below, emphasizing the portfolio manager’s three and five year performance. The Adviser also may consider a portfolio manager’s performance in managing client assets in sectors and industries assigned to the portfolio manager as part of his/her investment team responsibilities, when applicable. For portfolio managers who also have group management responsibilities, another factor in their evaluation is an assessment of the group’s overall investment performance.

Compensation of Legacy RiverSource Investments Portfolio Managers

This section describes the compensation structure of the portfolio managers who were associates of RiverSource Investments, LLC (now known as Columbia Management Investment Advisers, LLC) prior to May 1, 2010.

Compensation for these portfolio managers is typically comprised of (i) a base salary, and (ii) an annual cash bonus, a portion of which may be subject to a mandatory deferral program, and may include (iii) an equity

incentive award in the form of stock options and/or restricted stock. The Adviser’s portfolio managers are provided with a benefits package, including life insurance, health insurance, and participation in a company 401(k) plan, comparable to that received by other Adviser employees. Depending upon their job level, Adviser portfolio managers may also be eligible for other benefits or perquisites that are available to all Adviser employees at the same job level. Additional information about the compensation structure for each of these portfolio managers is set forth below.

Compensation – Mr. Schroepfer . The annual cash bonus is paid from a team bonus pool that is based on the performance of the accounts managed by the portfolio management team, which might include mutual funds, wrap accounts, institutional portfolios and hedge funds. The bonus pool is determined by the aggregate market competitive bonus targets for the teams of which the portfolio manager is a member and by the short-term (typically one-year) and long-term (typically three-year) performance of those accounts in relation to applicable benchmarks or the relevant peer group universe. Senior management of the Adviser has the discretion to increase or decrease the size of the part of the bonus pool and to determine the exact amount of each portfolio manager’s bonus paid from this portion of the bonus pool based on his/her performance as an employee. Certain investment personnel are also eligible to defer a portion of their compensation. An individual making this type of election can allocate the deferral to the returns associated with one or more products they manage or support or to certain other products managed by their investment team.

Performance Benchmarks


Portfolio Manager	Primary Benchmark(s)	Peer Group(s) (Lipper Classification)
Leonard Aplet	Barclays Capital U.S. 1-3 Year Government/Credit Index	Lipper Short Investment Grade Debt Funds Classification

James D’Arcy	Merrill Lynch 1-3 Year U.S. Municipal Index	Lipper Short Municipal Debt Funds Classification

Gregory Scott Liechty	Barclays Capital U.S. 1-3 Year Government/Credit Index	Lipper Short Investment Grade Debt Funds Classification

Carl Pappo	Barclays Capital U.S. Credit Bond Index (Corporate Bond Portfolio)	N/A

	Barclays Capital U.S. Aggregate Bond Index (Total Return Bond Fund)	Lipper Intermediate Investment Grade Debt Funds Classification

Alexander D. Powers	Barclays Capital U.S. Aggregate Bond Index	Lipper Intermediate Investment Grade Debt Funds Classification

Lee Reddin

	Barclays Capital U.S. Securitized Index (Mortgage and Asset-Backed Portfolio)	N/A

Scott Schroepfer

Ronald Stahl	Barclays Capital U.S. 1-3 Year Government/Credit Index	Lipper Short Investment Grade Debt Funds Classification

Michael Zazzarino	Barclays Capital U.S. Securitized Index	N/A

The size of the overall bonus pool each year depends on, among other factors, the levels of compensation generally in the investment management industry (based on market compensation data) and the Adviser’s profitability for the year, which is largely determined by assets under management.

Other Accounts

The following table shows the number and assets of other investment accounts (or portions of investment accounts) that the portfolio manager(s) of the Adviser managed, as of March 31, 2010.

Other Accounts Managed by the Portfolio Manager(s)

Other SEC-registered open-
end and closed-end funds

Other pooled
investment vehicles

Other accounts

Portfolio Manager

Number of
accounts

Assets

Number of
accounts

Assets

Number of
accounts

Assets

Carl Pappo ^(a)

Carl Pappo ^(b)

Leonard Aplet ^(d)

James D’Arcy ^(e)

Ronald Stahl ^(d)

Alexander Powers ^(b)

Lee Reddin ^(c)

Michael Zazzarino ^(b)

Michael Zazzarino ^(c)

Gregory Scott Liechty ^(d)

Scott Schroepfer ^(b)

^(a)	“Other SEC-registered open-end and closed-end funds” represents funds other than Corporate Bond Portfolio.

^(b)	“Other SEC-registered open-end and closed-end funds” represents funds other than Total Return Bond Fund.

^(c)	“Other SEC-registered open-end and closed-end funds” represents funds other than Mortgage- and Asset-Backed Portfolio.

^(d)	“Other SEC-registered open-end and closed-end funds” represents funds other than Short Term Bond Fund.

^(e)	“Other SEC-registered open-end and closed-end funds” represents funds other than Short Term Municipal Bond Fund.

The following table shows the number and assets of the above accounts (or portions of such accounts) for which the advisory fee is based on performance, as of March 31, 2010.

Other Accounts Managed by the Portfolio Manager(s) for which the Advisory Fee is Based on Performance

Other SEC-registered open-
end and closed-end funds

Other pooled
investment vehicles

Other accounts

Portfolio Manager

Number of
accounts

Assets

Number of
accounts

Assets

Number of
accounts

Assets

Carl Pappo ^(a)

—

Carl Pappo ^(b)

—

Leonard Aplet ^(d)

—

James D’Arcy ^(e)

—

Ronald Stahl ^(d)

—

Alexander Powers ^(b)

—

Gregory Scott Liechty ^(d)

—

Scott Schroepfer ^(b)

—

Lee Reddin ^(c)

—

Michael Zazzarino ^(b)

—

Michael Zazzarino ^(c)

—

^(a)	“Other SEC-registered open-end and closed-end funds” represents funds other than Corporate Bond Portfolio.

^(b)	“Other SEC-registered open-end and closed-end funds” represents funds other than Total Return Bond Fund.

^(c)	“Other SEC-registered open-end and closed-end funds” represents funds other than Mortgage- and Asset-Backed Portfolio.

^(d)	“Other SEC-registered open-end and closed-end funds” represents funds other than Short Term Bond Fund.

^(e)	“Other SEC-registered open-end and closed-end funds” represents funds other than Short Term Municipal Bond Fund.

Ownership of Securities

The table below shows the dollar ranges of shares of each Fund beneficially owned (as determined pursuant to Rule 16a-1(a)(2) under the 1934 Act) by the Funds’ portfolio manager(s), as of March 31, 2010.

Portfolio Manager Ownership of the Funds as of March 31, 2010


Portfolio Manager	Fund	Dollar Range of Equity Securities in the Fund Beneficially Owned
Leonard Aplet	Short Term Bond Fund

James D’Arcy	Short Term Municipal Bond Fund

Gregory Scott Liechty	Short Term Bond Fund

Carl Pappo	Corporate Bond Portfolio

Carl Pappo	Total Return Bond Fund

Alexander Powers	Total Return Bond Fund

Lee Reddin	Mortgage- and Asset-Backed Portfolio

Scott Schroepfer	Total Return Bond Fund

Ronald Stahl	Short Term Bond Fund

Michael Zazzarino	Mortgage- and Asset-Backed Portfolio

Michael Zazzarino	Total Return Bond Fund

^(a)	Excludes any notional investments.

^(b)	Notional investments through a deferred compensation account.

The Adviser’s Portfolio Managers and Potential Conflicts of Interest

Like other investment professionals with multiple clients, a Fund’s portfolio manager(s) may face certain potential conflicts of interest in connection with managing both the Fund and other accounts at the same time. The Adviser and the Funds have adopted compliance policies and procedures that attempt to address certain of the potential conflicts that portfolio managers face in this regard. Certain of these conflicts of interest are summarized below.

The management of accounts with different advisory fee rates and/or fee structures, including accounts that pay advisory fees based on account performance (performance fee accounts), may raise potential conflicts of interest for a portfolio manager by creating an incentive to favor higher fee accounts.

Potential conflicts of interest also may arise when a portfolio manager has personal investments in other accounts that may create an incentive to favor those accounts. As a general matter and subject to the Adviser’s Code of Ethics and certain limited exceptions, the Adviser’s investment professionals do not have the opportunity to invest in client accounts, other than the Funds. A portfolio manager who is responsible for managing multiple funds and/or accounts may devote unequal time and attention to the management of those funds and/or accounts. The effects of this potential conflict may be more pronounced where funds and/or accounts managed by a particular portfolio manager have different investment strategies.

A portfolio manager may be able to select or influence the selection of the broker/dealers that are used to execute securities transactions for the Funds. A portfolio manager’s decision as to the selection of broker/dealers could produce disproportionate costs and benefits among the Funds and the other accounts the portfolio manager manages.

A potential conflict of interest may arise when a portfolio manager buys or sells the same securities for a Fund and other accounts. On occasions when a portfolio manager considers the purchase or sale of a security to be in the best interests of a Fund as well as other accounts, the Adviser’s trading desk may, to the extent consistent with applicable laws and regulations, aggregate the securities to be sold or bought in order to obtain the best execution and lower brokerage commissions, if any. Aggregation of trades may create the potential for unfairness to a Fund or another account if a portfolio manager favors one account over another in allocating the securities bought or sold.

“Cross trades,” in which a portfolio manager sells a particular security held by a Fund to another account (potentially saving transaction costs for both accounts), could involve a potential conflict of interest if, for example, a portfolio manager is permitted to sell a security from one account to another account at a higher price than an independent third party would pay. The Adviser and the Funds have adopted compliance procedures that provide that any transactions between a Fund and another account managed by the Adviser are to be made at a current market price, consistent with applicable laws and regulations.

Another potential conflict of interest may arise based on the different investment objectives and strategies of a Fund and other accounts managed by its portfolio manager(s). Depending on another account’s objectives and other factors, a portfolio manager may give advice to and make decisions for a Fund that may differ from advice given, or the timing or nature of decisions made, with respect to another account. A portfolio manager’s investment decisions are the product of many factors in addition to basic suitability for the particular account involved. Thus, a portfolio manager may buy or sell a particular security for certain accounts, and not for a Fund, even though it could have been bought or sold for the Fund at the same time. A portfolio manager also may buy a particular security for one or more accounts when one or more other accounts are selling the security (including short sales). There may be circumstances when a portfolio manager’s purchases or sales of portfolio securities for one or more accounts may have an adverse effect on other accounts, including the Funds.

A Fund’s portfolio manager(s) also may have other potential conflicts of interest in managing the Fund, and the description above is not a complete description of every conflict that could exist in managing the Fund and other accounts. Many of the potential conflicts of interest to which the Adviser’s portfolio managers are subject are essentially the same or similar to the potential conflicts of interest related to the investment management activities of the Adviser and its affiliates. See Investment Advisory and Other Services – Other Roles and Relationships of Ameriprise Financial and its Affiliates – Certain Conflicts of Interest for more information about conflicts of interest, including those that relate to the Adviser and its affiliates.

The Subadviser(s) and Investment Subadvisory Services

MacKay Shields

MacKay Shields is the investment subadviser to High Income Fund. MacKay Shields is located at 9 West 57th Street, New York, NY 10019.

Services Provided

Pursuant to the terms of its Investment Sub-Advisory Agreement, MacKay Shields selects and manages the respective investments of High Income Fund for which it serves as investment subadviser. MacKay Shields performs its duties subject at all times to the control of the Board and in conformity with the stated policies of the Fund. Its Investment Sub-Advisory Agreement generally provides that in the absence of willful misfeasance, bad faith, negligence or reckless disregard of MacKay Shields’ obligations or duties thereunder, or any of its respective officers, directors, employees or agents, MacKay Shields shall not be subject to liability to the Trust or to any shareholder of the Trust for any act or omission in the course of rendering services thereunder or for any losses that may be sustained in the purchase, holding or sale of any security.

The Investment Sub-Advisory Agreement became effective with respect to a Fund after approval by the Board, and after an initial two year period, continues from year to year, provided that such continuation of the

Investment Sub-Advisory Agreement is specifically approved at least annually by the Trust’s Board, including its Independent Trustees. The Investment Sub-Advisory Agreement terminates automatically in the event of its assignment, and is terminable with respect to a Fund at any time without penalty by the Trust (by vote of the Board or by vote of a majority of the outstanding voting securities of the Fund) or by the Adviser on 60 days’ written notice.

The Adviser, from the investment advisory fees it receives, pays MacKay Shields for the services it provides to a Fund based on the percentage of the average daily net assets of that Fund, as set forth in the Investment Sub-Advisory Agreement. The Adviser also may pay amounts from its own assets to the Distributor or to selling or servicing agents for services they provide.

Subadvisory Rates and Fees Paid

The Adviser pays MacKay Shields full compensation for services provided and expenses assumed, a subadvisory fee for Columbia High Income Fund, computed daily and payable monthly at the annual rates listed below as a percentage of the average daily net assets of the Fund:


*Fund*		*RATE OF COMPENSATION*
High Income Fund		0.40% of the average daily net assets up to and including $100 million; 0.375% of average daily net assets in excess of $100 million and up to and including $200 million; and 0.35% of average daily net assets in excess of $200 million

MacKay Shields received subadvisory fees from the Adviser for its services as reflected in the following chart, which shows the subadvisory fees paid to MacKay Shields, the advisory fees waived and expense reimbursements where applicable, for the three most recently completed fiscal periods.

Subadvisory Fees Paid to MacKay Shields


Fund	Fiscal Period Ended March 31, 2010	Fiscal Period Ended March 31, 2009		Fiscal Period Ended March 31, 2008*
High Income Fund
Advisory Fee Paid to the Previous Adviser		$	2,508,574	$	3,219,688
Amount Waived by the Previous Adviser			—		—
Amount Reimbursed by the Previous Adviser			—		—

Until February 28, 2008, the Fund operated as a “Feeder Fund” and invested all or substantially all of its assets in a corresponding Master Portfolio that was a series of Columbia Funds Master Investment Trust, LLC. For the period April 1, 2007 to February 28, 2008, Columbia High Income Master Portfolio paid $2,985,314 in advisory fees, and from February 28, 2008 through March 31, 2008, the Fund paid $234,374 in subadvisory fees.

MacKay Shields Portfolio Manager(s)

The following provides additional information about the MacKay Shields portfolio manager(s) responsible for making the day-to-day investment decisions for the High Income Fund, as identified in the Management of the Fund – Primary Service Providers section of the Fund’s prospectus.

MacKay Shields Portfolio Manager(s)


Portfolio Manager		Fund
J. Matthew Philo		High Income Fund

Compensation

MacKay Shields establishes salaries at competitive levels, verified through industry surveys, to attract and maintain the best professional talent. In addition, an incentive bonus equal to a significant percentage of the firm’s pre-tax profits is paid annually to the firm’s employees based upon an individual’s performance and the profitability of the firm. The bonus generally represents a sizable amount relative to the base salary, and when considered with the base salary, results in a highly attractive level of total cash compensation for the firm’s professional employees. Every MacKay Shields employee participates in the bonus pool. This approach instills a strong sense of commitment on the part of each employee towards the overall success of the firm. There is no difference between the method used in determining portfolio managers’ compensation with respect to the Funds and other accounts.

MacKay Shields has performance-based fee arrangements with “eligible clients”, as that term is defined under Rule 205-3 of the 1940 Act, who have requested such arrangements. Performance-based fees may be calculated as a percentage of returns, or as a percentage of the increase in net asset value, and may be tied to a client-directed benchmark or loss carry forward. A portion of these performance-based fees forms a part of the bonus pool for all MacKay Shields employees. Such arrangements may appear to create an incentive to make riskier, more speculative investments than would be the case under a solely asset-based fee arrangement.

MacKay Shields offers a Phantom Stock Plan, which enhances the firm’s ability to attract, retain, motivate, and reward key executives. Awards can be made annually and vesting takes place over a period of several subsequent years. Participation in the Plan by senior professionals is contingent upon the execution of an Executive Employment Agreement.

Other Accounts

The following table shows the number and assets of other investment accounts (or portions of investment accounts) that the MacKay Shields portfolio manager(s) managed, as of March 31, 2010.

Other Accounts Managed by the MacKay Shields Portfolio Manager(s)

Other SEC-registered open-
end and closed-end funds

Other pooled
investment vehicles

Other accounts

Portfolio Manager

Number of
accounts

Assets

Number of
accounts

Assets

Number of
accounts

Assets

J. Matthew Philo

The following table shows the number and assets of the above accounts (or portions of such accounts) for which the advisory fee is based on performance, as of March 31, 2010.

Other Accounts Managed by the MacKay Shields Portfolio Manager(s) for which the Advisory Fee is Based on Performance

Other SEC-registered open-
end and closed-end funds

Other pooled
investment vehicles

Other accounts

Portfolio Manager

Number of
accounts

Assets

Number of
accounts

Assets

Number of
accounts

Assets

J. Matthew Philo

—

Ownership of Securities

The table below shows the dollar ranges of shares of the Fund beneficially owned (as determined pursuant to Rule 16a-1(a)(2) under the 1934 Act) by the MacKay Shields portfolio manager(s) as of March 31, 2010.

MacKay Shields Portfolio Manager Ownership of the Columbia Funds Family as of March 31, 2010


Portfolio Manager	Fund	Dollar Range of Equity Securities in the Fund Beneficially Owned
J. Matthew Philo	High Income Fund	None

MacKay Shields Portfolio Managers and Potential Conflicts of Interest

MacKay Shields’ High Yield group, which manages the Fund and Columbia High Yield Fund, Variable Series, also manages a domestic hedge fund and an offshore hedge fund, both of which are closed to new investors and whose assets are expected to be liquidated during 2009.

MacKay Shields has performance-based fee arrangements with “eligible clients” (as that term is defined under Rule 205-3 of the Investment Advisers Act of 1940) who have requested such arrangements. Performance-based fees may be calculated as a percentage of returns, or as a percentage of the increase in net asset value, and may be tied to a client-directed benchmark or loss carry forward. A portion of these performance-based fees forms a part of the bonus pool for all MacKay Shields employees. In 2008, certain portfolio managers who are responsible for managing some of the “eligible clients” who have performance-based fees shared a performance fee based on the performance of the account. Such arrangements may appear to create an incentive to make riskier, more speculative investments than would be the case under a solely asset-based fee arrangement.

To address potential conflicts of interest, MacKay Shields has adopted various policies and procedures to provide for equitable treatment of trading activity and to ensure that investment opportunities are allocated in a fair and appropriate manner. In addition, MacKay Shields has adopted a Code of Ethics and other policies and procedures that recognize a manager’s obligation to treat all of its clients, including the Funds, fairly and equitably. These policies, procedures, and the Code are designed to restrict a portfolio manager from favoring one client over another.

It is the policy of MacKay Shields not to favor any one client over another. Consistent with this policy, MacKay Shields has the following procedures, among others: (1) trade allocation procedures that provide for the pro rata allocation of investment opportunities among clients in a particular strategy, with certain exceptions; (2) a general prohibition against same day opposite direction transactions; and (3) short sale trade procedures requiring pre-approval of short sales and restricting certain short sales.

MacKay Shields’ “Trade Allocation Policy” provides that: (i) no client will be favored over any other client; (ii) trades should be pre-allocated, subject to certain exceptions, and allocations should be in writing; and (iii) MacKay Shields’ Legal/Compliance Department conducts periodic reviews of client account performance as a function of allocation to assure that no account or group of accounts is being preferred systematically in the allocation process. The Policy contains a procedure for limited offerings, which provides that in a limited offering, the allocations may be pro-rata based on size of the order or account size and within a Strategy pro-rata based on account size. Under this policy, when determining which accounts will participate in a trade, the portfolio managers will consider various objective criteria which may include but are not limited to: client cash limitations, actual and anticipated account inflows and outflows, duration and/or average maturity, account size, deal size, trade lots, existing exposure to an issuer or industry type and specific investment objectives and other practical limitations. If the aggregated order is filled in its entirety, it will be allocated among clients in accordance with the target allocation; if the order is partially filled, it will be allocated pro rata based on the allocation methodology recorded in the trade order management system.

During 2008, MacKay Shields’ High Yield Group managed long-only portfolios as well as performance-fee hedge funds (the “HY Hedge Funds”) that utilized short sales. When making “side-by-side” management investment decisions, portfolio managers may be presented with one or more of the following potential conflicts:

•

The management of long-only portfolios and the HY Hedge Funds may result in a portfolio manager devoting unequal time and attention to the management of each long-only portfolio and/or the HY Hedge Funds;

•

If a limited investment opportunity which may be suitable for both the long-only portfolios and the HY Hedge Funds is identified, the long-only portfolios or the HY Hedge Funds may not be able to take full advantage of that opportunity due to an allocation of filled purchase or sale orders across all eligible accounts, including the HY Hedge Funds;

•

A portfolio manager may take a position for the HY Hedge Funds that is contrary to the position held in the securities of the same issuer by long-only portfolios; and

•

MacKay Shields receives a performance fee from the HY Hedge Funds but not from the long-only portfolios. In these instances, the portfolio manager may have an economic incentive to favor the HY Hedge Funds over long-only portfolios.

In an effort to address these potential conflicts and ensure that both long-only portfolios and the HY Hedge Funds are receiving fair and equitable treatment, MacKay Shields developed procedures taking into consideration that long-only portfolios are more diversified compared to the HY Hedge Funds, which are more concentrated, less diversified, and have a different investment objective and risk characteristics.

Special considerations pertain to situations where one Strategy may conflict with another. It is the policy of MacKay Shields that no one client be favored over another. For example, one Strategy may focus on selling certain securities short, with the expectation of profit in the event that the prices for such securities decrease, while another Strategy may involve acquiring securities “long”. As stated above, it is the policy of MacKay Shields that no one Client be favored over another. To effect that policy in cases where Strategies compete or conflict with each other, MacKay Shields has adopted the following procedures:

Each portfolio manager will determine, separately from any other managers, the securities to purchase and sell on any given day with respect to the Clients and Strategies for which they are responsible.

In the event that the same Strategy purchases or sells the same security on the same trading day, all accounts participating in the transaction for that security shall be average-priced (same-day trades executed on behalf of different Strategies may not be average-priced), provided, however, that short sales for a particular security shall not be average-priced with purchases of the same security.

If a portfolio manager enters a buy or sell order for the same security for more than one Client or Strategy, and the orders are worked concurrently and not completely filled, each applicable Client or Strategy will be allotted securities pro-rata, in proportion to the amounts specified in the portfolio manager’s orders as described above.

MacKay Shields has adopted various policies and procedures to address potential conflicts and mitigate the effects of such conflicts should they arise.

The Cross Trading Policy provides that all cross trades must be pre-cleared by the MacKay Shields Legal/Compliance Department and require, among other things, that the transaction (a) be a purchase or sale for no consideration other than cash payments against prompt delivery of the security, (b) is effected at the independent market price of the security determined in accordance with applicable methodology; and (c) be effected with no brokerage transaction.

The Valuation Procedures provide, among other requirements, that any fair valuation of a security recommended by a portfolio manager be approved by portfolio managers from two other distinct portfolio management areas. In addition, on a monthly basis a Fair Valuation Committee meeting convenes to review all securities that are being fair valued.

The Administrator

Columbia Management Investment Advisers, LLC (which is also the Adviser) serves as Administrator of the Funds.

Services Provided

Pursuant to the terms of the Administrative Services Agreement, the Administrator has agreed to provide all of the services and facilities necessary for, or appropriate to, the business and effective operation of the Funds that are not (a) provided by employees or other agents engaged by a Fund or (b) required to be provided by any person pursuant to any other agreement or arrangement with a Fund.

Administration Fee Rates and Fees Paid

The Administrator receives fees as compensation for its services, which are computed daily and paid monthly, as set forth in the Administrative Services Agreement, and as shown in the section entitled Primary Service Providers – The Administrator in each Fund’s prospectuses.

The following chart shows the administration fees paid to the Previous Administrator for the three most recently completed fiscal years.

Administration Fees Paid by the Funds


Fund	Fiscal Year Ended March 31, 2010	Fiscal Year Ended March 31, 2009		Fiscal Year Ended March 31, 2008
Corporate Bond Portfolio
Administration Fee Paid to the Previous Administrator			—		—
Amount Waived/Reimbursed by the Previous Administrator			—		—

Mortgage- and Asset-Backed Portfolio
Administration Fee Paid to the Previous Administrator			—		—
Amount Waived/Reimbursed by the Previous Administrator			—		—

Short Term Bond Fund
Administration Fee Paid to the Previous Administrator		$	1,550,851	$	1,165,896
Amount Waived/Reimbursed by the Previous Administrator		$	241,564		—

Total Return Bond Fund
Administration Fee Paid to the Previous Administrator		$	2,099,443	$	2,638,964
Amount Waived/Reimbursed by the Previous Administrator			—		—

Short Term Municipal Bond Fund
Administration Fee Paid to the Previous Administrator		$	1,071,138	$	511,659
Amount Waived/Reimbursed by the Previous Administrator			—		—

High Income Fund
Administration Fee Paid to the Previous Administrator		$	1,462,420	$	1,581,588	*
Amount Waived/Reimbursed by the Previous Administrator			—		—

*	Prior to the Fund’s conversion from a feeder fund in a master/feeder structure to a stand-alone fund, the Administration fees were paid at both the Master Portfolio- and Feeder-Fund levels; amounts shown include only the portion paid at the Feeder Fund-level.

Pricing and Bookkeeping Services

State Street is responsible for providing certain pricing and bookkeeping services to the Funds. The Administrator is responsible for overseeing the performance of these services and for certain other services.

Services Provided

provides financial reporting services to the Funds. Also effective December 15, 2006, the Trust entered into an Accounting Services Agreement with State Street and the Previous Adviser (collectively with the Financial Reporting Services Agreement, the State Street Agreements) pursuant to which State Street provides accounting services to the Funds. Effective May 1, 2010, the State Street Agreements were amended to, among other things, assign and delegate the Previous Adviser’s rights and obligations under the State Street Agreements to the Administrator. Under the State Street Agreements, the Funds pay State Street an annual fee of $38,000 paid monthly plus an additional monthly fee based on an annualized percentage rate of average daily net assets of a Fund for the month. The aggregate fee for a Fund during any year shall not exceed $140,000 annually (exclusive of out-of-pocket expenses and charges). The Funds also reimburse State Street for certain out-of-pocket expenses and charges.

Effective December 15, 2006, the Trust entered into a Pricing and Bookkeeping Oversight and Services Agreement (the Services Agreement) with the Previous Adviser. Under the Services Agreement, the Previous Adviser provided services related to Fund expenses and the requirements of the Sarbanes-Oxley Act of 2002, and provided oversight of the accounting and financial reporting services provided by State Street. Under the Services Agreement, the Funds reimbursed the Previous Adviser for out-of-pocket expenses and charges, including fees payable to third parties, such as for pricing the Funds’ portfolio securities, incurred by the Previous Adviser in the performance of services under the Services Agreement. Prior to January 1, 2008, the Funds also reimbursed the Previous Adviser for accounting oversight services, services related to Fund expenses and the requirements of the Sarbanes-Oxley Act of 2002. Effective May 1, 2010, the services provided by the Previous Adviser under the Services Agreement are provided by the Administrator under the Administrative Services Agreement.

Pricing and Bookkeeping Fees Paid

The Previous Adviser and State Street received fees from the Funds for their services as reflected in the following chart, which shows the net pricing and bookkeeping fees paid to State Street and to the Previous Adviser for the three most recently completed fiscal years.

Pricing and Bookkeeping Fees Paid by the Funds


Fund	Fiscal Year Ended March 31, 2010	Fiscal Year Ended March 31, 2009		Fiscal Year Ended March 31, 2008
Corporate Bond Portfolio			—		—

Mortgage- and Asset-Backed Portfolio			—		—

Short Term Bond Fund		$	171,635	$	170,169
Amount Paid to the Previous Adviser			—	$	10,280
Amount Paid to State Street		$	171,635	$	159,889

Total Return Bond Fund		$	191,276	$	209,024
Amount Paid to the Previous Adviser			—	$	10,280
Amount Paid to State Street		$	191,276	$	198,744

Short Term Municipal Bond Fund		$	159,109	$	118,770
Amount Paid to the Previous Adviser			—	$	10,280
Amount Paid to State Street		$	159,109	$	108,490


Fund	Fiscal Year Ended March 31, 2010	Fiscal Year Ended March 31, 2009		Fiscal Year Ended March 31, 2008
High Income Fund		$	159,698	$	49,396
Amount Paid to the Previous Adviser			—	$	2,603
Amount Paid to State Street		$	159,698	$	46,793

The Principal Underwriter/Distributor

Columbia Management Investment Distributors, Inc. (the Distributor) serves as the principal underwriter and distributor for the continuous offering of shares of the Funds pursuant to a Distribution Agreement. The Distribution Agreement obligates the Distributor to use appropriate efforts to find purchasers for the shares of the Funds. The Distributor’s address is: One Financial Center, Boston, MA 02111.

Distribution Obligations

Pursuant to the Distribution Agreement, the Distributor, as agent, sells shares of the Funds on a continuous basis and transmits purchase and redemption orders that it receives to the Trust or the Transfer Agent, or their designated agents. Additionally, the Distributor has agreed to use appropriate efforts to solicit orders for the sale of shares and to undertake advertising and promotion as it believes appropriate in connection with such solicitation. Pursuant to the Distribution Agreement, the Distributor, at its own expense, finances those activities which are primarily intended to result in the sale of shares of the Funds, including, but not limited to, advertising, compensation of underwriters, dealers and sales personnel, the printing and mailing of prospectuses to other than existing shareholders, and the printing and mailing of sales literature. The Distributor, however, may be compensated or reimbursed for all or a portion of such expenses to the extent permitted by a Distribution Plan adopted by the Trust pursuant to Rule 12b-1 under the 1940 Act.

The Distribution Agreement became effective with respect to a Fund after approval by its Board, and, after an initial two-year period, continues from year to year, provided that such continuation of the Distribution Agreement is specifically approved at least annually by the Board, including its Independent Trustees. The Distribution Agreement terminates automatically in the event of its assignment, and is terminable with respect to a Fund at any time without penalty by the Trust (by vote of the Board or by vote of a majority of the outstanding voting securities of the Fund) or by the Distributor on 60 days’ written notice.

Underwriting Commissions

The following table shows all commissions and other compensation received by the Previous Distributor, as well as amounts the Previous Distributor retained, during the Funds’ three most recently completed fiscal years.

Underwriting Commissions Paid by the Funds and Retained by the Distributor


Fund	Fiscal Year Ended March 31, 2010	Fiscal Year Ended March 31, 2009		Fiscal Year Ended March 31, 2008
Corporate Bond Portfolio
Amount Paid
Shares		$	0	$	0

Mortgage- and Asset-Backed Portfolio
Amount Paid
Shares		$	0	$	0

Short Term Bond Fund
Amount Paid
Class A shares		$	70,381	$	10,094
Amount Retained
Class A shares		$	19,312	$	2,260
Class B shares		$	2,819	$	4,984
Class C shares		$	14,417	$	1,919

Total Return Bond Fund
Amount Paid
Class A shares		$	14,461	$	7,265
Amount Retained
Class A shares		$	1,258	$	795
Class B shares		$	8,232	$	7,327
Class C shares		$	278	$	600

Short Term Municipal Bond Fund
Amount Paid
Class A shares		$	163,550	$	145
Amount Retained
Class A shares		$	56,320	$	32
Class B shares		$	0	$	0
Class C shares		$	4,996	$	203

High Income Fund
Amount Paid
Class A shares		$	109,439	$	193,929
Amount Retained
Class A shares		$	18,628	$	23,028
Class B shares		$	70,082	$	154,792
Class C shares		$	4,660	$	4,914


		Other Roles and Relationships of Ameriprise Financial and its Affiliates – Certain Conflicts of Interest

As described above in the Investment Advisory and Other Services section of this SAI, and in the Management of the Fund – Primary Service Providers section of each Fund’s prospectuses, the Adviser, Administrator, Distributor and Transfer Agent, all affiliates of Ameriprise Financial, receive compensation from the Funds for the various services they provide to the Funds. Additional information as to the specific terms regarding such compensation is set forth in these affiliated service providers’ contracts with the Funds, each of which typically is included as an exhibit to Part C of each Fund’s registration statement.

In many instances, the compensation paid to the Adviser and other Ameriprise Financial affiliates for the services they provide to a Fund is based, in some manner, on the size of a Fund’s assets under management. As the size of a Fund’s assets under management grows, so does the amount of compensation paid to the Adviser and other Ameriprise Financial affiliates for providing services to the Fund. This relationship between Fund assets and affiliated service provider compensation may create economic and other conflicts of interests of which Fund investors should be aware. These potential conflicts of interest, as well as additional ones, are discussed in detail below and also are addressed in other disclosure materials, including the Funds’ prospectuses. These conflicts of interest also are highlighted in account documentation and other disclosure materials of Ameriprise Financial affiliates that make available or offer the Columbia Funds as investments in connection with their respective products and services. In addition, Part 1A of the Adviser’s Form ADV, which it must file with the SEC as an investment adviser registered under the Investment Advisers Act of 1940, provides information about the Adviser’s business, assets under management, affiliates and potential conflicts of interest. Part 1A of the Adviser’s Form ADV is available online through the SEC’s website at www.adviserinfo.sec.gov.

Additional actual or potential conflicts of interest and certain investment activity limitations that could affect a Fund may arise from the financial services activities of Ameriprise Financial and its affiliates, including, for example, the investment advisory/management services provided for clients and customers other than the Fund. In this regard, Ameriprise Financial is a major financial services company. Ameriprise Financial and its affiliates, are engaged in a wide range of financial activities beyond the mutual fund-related activities of the Adviser, including, among others, broker/dealer (sales and trading), asset management, insurance and other financial activities. The broad range of financial services activities of Ameriprise Financial and its affiliates may involve multiple advisory, transactional, lending, financial and other interests in securities and other instruments, and in companies, that may be bought, sold or held by a Fund. The following describes certain actual and potential conflicts of interest that may be presented.

Actual and Potential Conflicts of Interest Related to the Investment Advisory/Management Activities of Ameriprise Financial and its Affiliates in Connection With Other Advised/Managed Funds and Accounts

The Adviser and other affiliates of Ameriprise Financial may advise or manage funds and accounts other than the Funds. In this regard, Ameriprise Financial and its affiliates may provide investment advisory/management and other services to other advised/managed funds and accounts that are similar to those provided to the Funds. The Adviser and Ameriprise Financial’s other investment adviser affiliates (including, for example, Columbia Wanger Asset Management, LLC) will give advice to and make decisions for all advised/managed funds and accounts, including the Funds, as they believe to be in that fund’s and/or account’s best interests, consistent with their fiduciary duties. The Funds and the other advised/managed funds and accounts of Ameriprise Financial and its affiliates are separately and potentially divergently managed, and there is no assurance that any investment advice Ameriprise Financial and its affiliates give to other advised/managed funds and accounts will also be given simultaneously or otherwise to the Funds.

or may conflict with, advice given to and/or investment decisions made for other advised/managed funds and accounts. As a result, the performance of a Fund may differ from the performance of other funds or accounts advised/managed by the Adviser or other Ameriprise Financial affiliates. Similarly, a position taken by Ameriprise Financial and its affiliates, including the Adviser, on behalf of other funds or accounts may be contrary to a position taken on behalf of a Fund. Moreover, Ameriprise Financial and its affiliates, including the Adviser, may take a position on behalf of other advised/managed funds and accounts, or for their own proprietary accounts, that is adverse to companies or other issuers in which a Fund is invested. For example, a Fund may hold equity securities of a company while another advised/managed fund or account may hold debt securities of the same company. If the portfolio company were to experience financial difficulties, it might be in the best interest of the Fund for the company to reorganize while the interests of the other advised/managed fund or account might be better served by the liquidation of the company. This type of conflict of interest could arise as the result of circumstances that cannot be generally foreseen within the broad range of investment advisory/management activities in which Ameriprise Financial and its affiliates engage.

Investment transactions made on behalf of other funds or accounts advised/managed by the Adviser or other Ameriprise Financial affiliates also may have a negative effect on the value, price or investment strategies of a Fund. For example, this could occur if another advised/managed fund or account implements an investment decision ahead of, or at the same time as, a Fund and causes the Fund to experience less favorable trading results than they otherwise would have experienced based on market liquidity factors. In addition, the other funds and accounts advised/managed by the Adviser and other Ameriprise Financial affiliates, including the other Columbia Funds, may have the same or very similar investment objective and strategies as a Fund. In this situation, the allocation of, and competition for, investment opportunities among a Fund and other funds and/or accounts advised/managed by the Adviser or other Ameriprise Financial affiliates may create conflicts of interest especially where, for example, limited investment availability is involved. The Adviser has adopted policies and procedures addressing the allocation of investment opportunities among the Funds and other funds and accounts advised by the Adviser and other affiliates of Ameriprise Financial. For more information, see Investment Advisory and Other Services – The Adviser and Investment Advisory Services – Portfolio Manager(s) – The Adviser’s Portfolio Managers and Potential Conflicts of Interests .

Sharing of Information among Advised/Managed Accounts

Ameriprise Financial and its affiliates also may possess information that could be material to the management of a Fund and may not be able to, or may determine not to, share that information with the Fund, even though the information might be beneficial to the Fund. This information may include actual knowledge regarding the particular investments and transactions of other advised/managed funds and accounts, as well as proprietary investment, trading and other market research, analytical and technical models, and new investment techniques, strategies and opportunities. Depending on the context, Ameriprise Financial and its affiliates generally will have no obligation to share any such information with the Funds. In general, employees of Ameriprise Financial and its affiliates, including the portfolio managers of the Adviser, will make investment decisions without regard to information otherwise known by other employees of Ameriprise Financial and its affiliates, and generally will have no obligation to access any such information and may, in some instances, not be able to access such information because of legal and regulatory constraints or the internal policies and procedures of Ameriprise Financial and its affiliates. For example, if the Adviser or another Ameriprise Financial affiliate, or their respective employees, come into possession of non-public information regarding another advised/managed fund or account, they may be prohibited by legal and regulatory constraints, or internal policies and procedures, from using that information in connection with transactions made on behalf of the Funds. For more information, see Investment Advisory and Other Services – The Adviser and Investment Advisory Services – Portfolio Manager(s) – The Adviser’s Portfolio Managers and Potential Conflicts of Interests .

Soft Dollar Benefits

databases and other research-oriented materials), that the Adviser may receive in connection with brokerage services provided to a Fund may have the inadvertent effect of disproportionately benefiting other advised/managed funds or accounts. This could happen because of the relative amount of brokerage services provided to a Fund as compared to other advised/managed funds or accounts, as well as the relative compensation paid by a Fund.

Services Provided to Other Advised/Managed Accounts

Ameriprise Financial and its affiliates also may act as an investment adviser, investment manager, administrator, transfer agent, custodian, trustee, broker/dealer, agent, or in another capacity, for advised/managed funds and accounts other than the Funds, and may receive compensation for acting in such capacity. This compensation that the Adviser, Distributor and Transfer Agent and other Ameriprise Financial affiliates receive could be greater than the compensation Ameriprise Financial and its affiliates receive for acting in the same or similar capacity for the Funds. In addition, the Adviser, Distributor and Transfer Agent and other Ameriprise Financial affiliates may receive other benefits, including enhancement of new or existing business relationships. This compensation and/or the benefits that Ameriprise Financial and its affiliates may receive from other advised/ managed funds and accounts and other relationships could potentially create incentives to favor other advised/managed funds and accounts over the Funds. Trades made by Ameriprise Financial and its affiliates for the Funds may be, but are not required to be, aggregated with trades made for other funds and accounts advised/managed by the Adviser and other Ameriprise Financial affiliates. If trades are aggregated among the Funds and those other funds and accounts, the various prices of the securities being traded may be averaged, which could have the potential effect of disadvantaging the Funds as compared to the other funds and accounts with which trades were aggregated.

Proxy Voting

Although the Adviser endeavors to make all proxy voting decisions with respect to the interests of the Funds for which it is responsible in accordance with its proxy voting policies and procedures, the Adviser’s proxy voting decisions with respect to a Fund’s portfolio securities may nonetheless benefit other advised/managed funds and accounts, and/or clients, of Ameriprise Financial and its affiliates. The Adviser has adopted proxy voting policies and procedures that are designed to provide that all proxy voting is done in the best interests of its clients, including the Funds, without any resulting benefit or detriment to the Adviser and/or its affiliates, including Ameriprise Financial and its affiliates. For more information about the Adviser’s proxy voting policies and procedures, see Investment Advisory and Other Services – Proxy Voting Policies and Procedures .

Certain Trading Activities

The directors/trustees, officers and employees of Ameriprise Financial and its affiliates may buy and sell securities or other investments for their own accounts, and in doing so may take a position that is adverse to a Fund. In order to reduce the possibility that such personal investment activities of the directors/trustees, officers and employees of Ameriprise Financial and its affiliates will materially adversely affect the Funds, Ameriprise Financial and its affiliates have adopted policies and procedures, and the Funds, the Board, the Adviser and the Distributor have each adopted a Code of Ethics that addresses such personal investment activities. For more information, see Investment Advisory and Other Services – Codes of Ethics .

Affiliate Transactions

Subject to applicable legal and regulatory requirements, the Funds may enter into transactions in which Ameriprise Financial and/or its affiliates may have an interest that potentially conflicts with the interests of the Funds. For example, an affiliate of Ameriprise Financial may sell securities to a Fund from an offering in which it is an underwriter or from securities that it owns as a dealer, subject to applicable legal and regulatory requirements.

Investment Limitations Arising from Ameriprise Financial Activities

Regulatory restrictions applicable to Ameriprise Financial and its affiliates may limit the Funds’ investment activities in various ways. For example, regulations regarding certain industries and markets, such as those in emerging or international markets, and certain transactions, such as those involving certain futures and derivatives, may impose a cap on the aggregate amount of investments that may be made by affiliated investors, including accounts managed by the same affiliated manager, in the aggregate or in individual issuers. At certain times, Ameriprise Financial and its affiliates also may be restricted in the securities that can be bought or sold for the Funds and other advised/managed funds and accounts because of the lending or other relationships Ameriprise Financial and its affiliates have with the issuers of securities. This could happen, for example, if the Funds and/or other advised/managed funds and accounts desired to buy a security issued by a company for which Ameriprise Financial or its affiliates served as underwriter. The internal policies and procedures of Ameriprise Financial and its affiliates covering these types of regulatory restrictions and addressing similar issues also may at times restrict the Funds’ investment activities. A client not advised by Ameriprise Financial and its affiliates would not be subject to many of these restrictions. See also About the Funds’ Investments – Certain Investment Activity Limits .

Actual and Potential Conflicts of Interest Related to Ameriprise Financial and its Affiliates’ Non-Advisory Relationships with Clients and Customers other than the Funds

The financial relationships that Ameriprise Financial and its affiliates may have with companies and other entities in which a Fund may invest can give rise to actual and potential conflicts of interest. Subject to applicable legal and regulatory requirements, a Fund may invest (a) in the securities of Ameriprise Financial and/or its affiliates and/or in companies in which Ameriprise Financial and its affiliates have an equity, debt or other interest, and/or (b) in the securities of companies held by other Columbia Funds. The purchase, holding and sale of such securities by a Fund may enhance the profitability and the business interests of Ameriprise Financial and/or its affiliates and/or other Columbia Funds. There also may be limitations as to the sharing with the Adviser of information derived from the non-investment advisory/management activities of Ameriprise Financial and its affiliates because of legal and regulatory constraints and internal policies and procedures (such as information barriers and ethical walls). Because of these limitations, Ameriprise Financial and its affiliates generally will not share information derived from its non-investment advisory/management activities with the Adviser.

Actual and Potential Conflicts of Interest Related to Ameriprise Financial Affiliates’ Marketing and Use of the Columbia Funds as Investment Options

Ameriprise Financial and its affiliates also provide a variety of products and services that, in some manner, may utilize the Columbia Funds as investment options. For example, the Columbia Funds may be offered as investments in connection with brokerage and other securities products offered by Ameriprise Financial and its affiliates, and may be utilized as investments in connection with fiduciary, investment management and other accounts offered by affiliates of Ameriprise Financial, as well as for other Columbia Funds structured as “funds of funds.” The use of the Columbia Funds in connection with other products and services offered by Ameriprise Financial and its affiliates may introduce economic and other conflicts of interest. These conflicts of interest are highlighted in account documentation and other disclosure materials for the other products and services offered by Ameriprise Financial and its affiliates.

services to the Funds is generally based on the Funds’ assets under management and those assets will grow as shares of the Funds are sold, potential conflicts of interest may exist. See Brokerage Allocation and Other Practices – Additional Financial Intermediary Payments for more information.

Other Services Provided

The Transfer Agent

Columbia Management Investment Services Corp. (formerly, RiverSource Service Corporation) is the transfer agent of the Funds. The Transfer Agent is located at One Financial Center, Boston, MA 02111. Under the Transfer Agency Agreement, the Transfer Agent provides transfer agency, dividend disbursing agency and shareholder servicing agency services to the Funds. Effective January 1, 2010, the Funds paid the Previous Transfer Agent and, effective May 1, 2010, pay the Transfer Agent, an annual transfer agency fee of $22.36 per account, payable monthly. In addition, the Funds may reimburse the Transfer Agent for the fees and expenses the Transfer Agent pays to financial intermediaries that maintain omnibus accounts with the Funds, subject to a cap up to $22.36 per account for financial intermediaries that seek payment by the Transfer Agent on a per account basis and a cap equal to 0.15% of a Fund’s net assets represented by the account for financial intermediaries that seek payment by the Transfer Agent based on a percentage of net assets. The Funds also pay certain reimbursable out-of-pocket expenses to the Transfer Agent. The Transfer Agent also may retain as additional compensation for its services revenues for fees for wire, telephone and redemption orders, IRA trustee agent fees and account transcripts due the Transfer Agent from Fund shareholders and credits (net of bank charges) earned with respect to balances in accounts the Transfer Agent maintains in connection with its services to the Funds. For the period January 1, 2008 through December 31, 2009, the Funds paid the Previous Transfer Agent an annual transfer agency fee of $17.34 per account, payable monthly. In addition, the Funds paid the Previous Transfer Agent for the fees and expenses the Previous Transfer Agent paid to third party dealer firms that maintained omnibus accounts with the Funds, subject to a cap equal to 0.15% of a Fund’s net assets represented by the account. For the period April 1, 2006 through December 31, 2007, the Funds paid the Previous Transfer Agent an annual fee of $17.00 per account, payable monthly. For the period November 1, 2005 through March 31, 2006, the Fund paid the Previous Transfer Agent an annual fee of $15.23 per account, payable monthly. For the period September 1, 2005 through December 31, 2007, the Previous Transfer Agent was entitled to reimbursement by the Funds for the fees and expenses that the Previous Transfer Agent paid to dealer firms or transfer agents that maintain omnibus accounts with the Funds, subject to a cap equal to 0.11% of a Fund’s net assets represented by the account.

The Transfer Agent retains BFDS/DST, 2 Heritage Drive, North Quincy, MA 02171 as the Funds’ sub-transfer agent. BFDS/DST assists the Transfer Agent in carrying out its duties.

The Custodian

State Street, which is located at State Street Financial Center, One Lincoln Street, Boston, MA 02111, is the Funds’ Custodian. State Street is responsible for safeguarding the Funds’ cash and securities, receiving and delivering securities and collecting the Funds’ interest and dividends.

Independent Registered Public Accounting Firm

[ ], which is located at 125 High Street, Boston, MA 02110, is the Funds’ independent registered public accounting firm. The Funds issue unaudited financial statements semi-annually and audited financial statements annually. The annual financial statements for the Funds’ fiscal year ended March 31, 2010 have been audited by [ ]. The Board has selected [ ] as the independent registered public accounting firm to audit the Funds’ books and review their tax returns for the fiscal year ended March 31, 2011.

The Reports of Independent Registered Public Accounting Firm and the audited financial statements included in the Annual Reports to Shareholders of the Funds dated March 31, 2010 are incorporated herein by

reference. No other parts of the annual reports or semi-annual reports to shareholders are incorporated by reference herein. The financial statements incorporated by reference into the Funds’ prospectuses and this SAI have been so incorporated in reliance upon the report of the independent registered public accounting firm, given on its authority as an expert in auditing and accounting.

Counsel

Goodwin Procter LLP serves as legal counsel to the Trust. Its address is 901 New York Avenue, N.W., Washington, D.C. 20001.

Distribution and Servicing Plans

The Trust has adopted a Rule 12b-1, or distribution plan, for Class A shares, Class B shares and Class C shares of the Funds that offer those classes. See Capital Stock and Other Securities for information about which Funds offer which classes of shares. The Funds no longer accept investments from new or existing investors in Class B shares, except for certain limited transactions from existing investors in Class B shares . See the prospectuses for Class B shares of the Funds for details.

The Trust has adopted shareholder servicing plans (Servicing Plans) and Distribution Plans for the Class B and Class C shares and a combined distribution and shareholder servicing plan for Class A shares. The Servicing Plans permit the Funds to compensate or reimburse servicing agents for the shareholder services they have provided. The Distribution Plans, adopted pursuant to Rule 12b-1 under the 1940 Act, permit the Funds to compensate or reimburse the Distributor and/or selling agents for activities or expenses primarily intended to result in the sale of the classes’ shares. Payments are made at an annual rate and paid monthly, as a percentage of average daily net assets, set from time to time by the Board, and are charged as expenses of each Fund directly to the applicable share class. A substantial portion of the expenses incurred pursuant to these plans is paid to affiliates of Ameriprise Financial and the Distributor.

The annual rates in effect and plan limits, as a percentage of average daily net assets are as follows:


	Current Rate		Plan Limit
Class A Combined Distribution and Shareholder Servicing Plan	0.25	%	0.25	%
Class B and Class C Shareholder Servicing Plans	0.25	%	0.25	%
Class B and Class C Distribution Plans	0.75	%	0.75	%

Payments under the Class A Distribution and Servicing Plan, the Class B Distribution Plan and the Class C Distribution Plan generally may be made with respect to the following: (i) preparation, printing and distribution of prospectuses, sales literature and advertising materials; (ii) commissions, incentive compensation or other compensation to, and expenses of, account executives or other employees of the Distributor or Selling Agents, attributable to distribution or sales support activities, respectively; (iii) overhead and other office expenses of the Distributor or Selling Agents, attributable to distribution or sales support activities, respectively; (iv) opportunity costs relating to the foregoing (which may be calculated as a carrying charge on the Distributor’s or Selling Agents’ unreimbursed expenses incurred in connection with distribution or sales support activities, respectively); and (v) any other costs and expenses relating to distribution or sales support activities.

All of the Distribution Plans may be terminated with respect to their respective shares by vote of a majority of the Trustees, including a majority of the Independent Board Members, or by vote of a majority of the holders of the outstanding voting securities of the appropriate share class. Any change in a Rule 12b-1 Plan that would increase materially the distribution expenses paid by the appropriate share class requires shareholder approval.

years so long as the Distribution Plan is in effect. If the Distribution Plan were terminated or not continued, a Fund would not be contractually obligated to pay the Distributor for any expenses not previously reimbursed by the Fund. There were no unreimbursed expenses incurred under any of the Distribution Plans in the previous fiscal year to be carried over to the current fiscal year.

The Funds participate in joint distribution activities with other Columbia Funds. The fees paid under each Distribution Plan adopted by a Fund may be used to finance the distribution of the shares of other Columbia Funds. Such distribution costs are allocated based on the relative net asset size of the respective Funds.

During the most recently completed fiscal year, the Previous Distributor received distribution and service fees from the Funds for its services as reflected in the following chart. The Trust is not aware as to what amount, if any, of the Rule 12b-1 fees paid to the Previous Distributor were, on a Fund-by-Fund basis, used for advertising, printing and mailing of prospectuses to other than current shareholders, compensation to broker-dealers, compensation to sales personnel or interest, carrying or other financing charges.

Distribution and Service Fees Paid by the Funds for the Fiscal Year Ended March 31, 2010


Fund	Class A Shares	Class B Shares	Class C Shares	Shares
Corporate Bond Portfolio
Distribution Fee	—	—	—	—
Service Fee	—	—	—	—

Mortgage- and Asset-Backed Portfolio
Distribution Fee	—	—	—	—
Service Fee	—	—	—	—

Short Term Bond Fund
Combined Shareholder Servicing and Distribution Fee		—	—	—
Distribution Fee	—			—
Service Fee	—			—

Total Return Bond Fund
Combined Shareholder Servicing and Distribution Fee		—	—	—
Distribution Fee	—			—
Service Fee	—			—

Short Term Municipal Bond Fund
Combined Shareholder Servicing and Distribution Fee		—	—	—
Distribution Fee	—			—
Service Fee	—			—

High Income Fund
Combined Shareholder Servicing and Distribution Fee		—	—	—
Distribution Fee	—			—
Service Fee	—

Expense Limitations

The Adviser has voluntarily agreed to reimburse a portion of the Funds’ expenses so that the Funds’ ordinary operating expenses (excluding any distribution and service fees, brokerage commissions, interest, taxes and extraordinary expenses, but including custodian charges relating to overdrafts, if any), after giving effect to any balance credits from the Funds’ custodian, do not exceed the following percentages:


Fund		Expenses Exceeding:
Short Term Bond Fund		0.48% of average daily net assets
Total Return Bond Fund*		0.70% of average daily net assets
Short Term Municipal Bond Fund*		0.50% of average daily net assets
High Income Fund		1.00% of average daily net assets

*	The Adviser is entitled to recover from the Fund any fees waived or expenses reimbursed for a three year period following the date of such waiver or reimbursement if such recovery does not cause the Fund’s expenses to exceed the expense limitations in effect at the time of recovery.

These arrangements may be modified or terminated by the Adviser at any time.

For Columbia Short Term Bond Fund, the Distributor has voluntarily agreed to waive a portion of the distribution fee for Class C shares so that it does not exceed 0.31% annually. This arrangement may be modified or terminated by the Distributor at any time .

Codes of Ethics

The Funds, the Adviser, MacKay Shields and the Distributor have adopted Codes of Ethics pursuant to the requirements of the 1940 Act, including Rule 17j-1 under the 1940 Act. These Codes of Ethics permit personnel subject to the Codes of Ethics to invest in securities, including securities that may be bought or held by the Funds. These Codes of Ethics are included as exhibits to Part C of the Funds’ registration statement. These Codes of Ethics can be reviewed and copied at the SEC’s Public Reference Room and may be obtained by calling the SEC at 202.551.8090; they also are available on the SEC’s website at www.sec.gov, and may be obtained, after paying a duplicating fee, by electronic request to publicinfo@sec.gov or by writing to the SEC’s Public Reference Section, Washington, D.C. 20549-1520.

Proxy Voting Policies and Procedures

The Funds have delegated to the Adviser or, as applicable, a subadviser, the responsibility to vote proxies relating to portfolio securities held by the Funds. In deciding to delegate this responsibility to the Adviser, the Board reviewed and approved the policies and procedures adopted by the Adviser and, as applicable, subadviser. These included the procedures that the Adviser follows when a vote presents a conflict between the interests of the Funds and their shareholders and the Adviser (or subadviser), its affiliates, its other clients or other persons.

The Adviser’s policy is to vote all proxies for Fund securities in a manner considered by the Adviser to be in the best interest of the Funds and their shareholders without regard to any benefit to the Adviser, its affiliates, its other clients or other persons. The Adviser examines each proposal and votes against the proposal, if, in its judgment, approval or adoption of the proposal would be expected to have an adverse impact on the current or potential market value of the issuer’s securities. The Adviser also examines each proposal and votes the proxies against the proposal, if, in its judgment, the proposal would be expected to affect adversely the best interest of the Funds. The Adviser determines the best interest of a Fund in light of the potential economic return on the Fund’s investment.

The Adviser seeks to address potential material conflicts of interest by having predetermined voting guidelines. For those proposals that require special consideration or in instances where special circumstances may require varying from the predetermined guideline, the Adviser’s Proxy Voting Committee determines the vote in the best interest of the Funds, without consideration of any benefit to the Adviser, its affiliates, its other clients or other persons. The Adviser’s Proxy Voting Committee is composed of representatives of the Adviser’s equity investments, equity research, compliance, legal and operations functions. In addition to the responsibilities described above, the Proxy Voting Committee has the responsibility to review, at least annually, the Adviser’s proxy voting policies to ensure consistency with internal policies and regulatory requirements and to develop additional predetermined voting guidelines to assist in the review of proxy proposals.

The Proxy Voting Committee may vary from a predetermined guideline if it determines that voting on the proposal according to the predetermined guideline would be expected to have an adverse impact on the current or potential market value of the issuer’s securities or to affect adversely the best interest of the Funds. References to the best interests of the Funds refer to the interest of the Funds in terms of the potential economic return on the client’s investment. In determining the vote on any proposal, the Proxy Voting Committee does not consider any benefit other than benefits to the Funds. A member of the Proxy Voting Committee is prohibited from voting on any proposal for which he or she has a conflict of interest by reason of a direct relationship with the issuer or other party affected by a given proposal. Persons making recommendations to the Proxy Voting Committee or its members are required to disclose to the Committee any relationship with a party making a proposal or other matter known to the person that would create a potential conflict of interest.

The Adviser has retained Glass-Lewis & Co., a third-party vendor, to implement its proxy voting process. Glass-Lewis & Co. provides proxy analysis, record keeping services and vote disclosure services.

Information regarding how the Columbia Funds (except certain Columbia Funds that do not invest in voting securities) voted proxies relating to portfolio securities during the most recent twelve month period ended June 30 will be available by August 31 of this year free of charge: (i) through the Columbia Funds’ website at www.columbiafunds.com and (ii) on the SEC’s website at www.sec.gov. For a copy of the Adviser’s and subadviser’s policies and procedures that are used to determine how to vote proxies relating to portfolio securities held by the Columbia Funds, see Appendix B to this SAI.

Expenses Paid by Third Parties

The Distributor and the Administrator furnish, without additional cost to the Funds, the services of certain officers of the Funds and such other personnel (other than the personnel of the Adviser or the investment subadviser(s), if applicable) as are required for the proper conduct of the Funds’ affairs. The Distributor bears the incremental expenses of printing and distributing prospectuses used by the Distributor or furnished by the Distributor to investors in connection with the public offering of the Funds’ shares and the costs of any other promotional or sales literature, except that to the extent permitted under the Distribution Plans of each Fund, sales-related expenses incurred by the Distributor may be reimbursed by the Funds.

Funds’ shareholders; all expenses of shareholders’ and Trustee meetings and of preparing, printing and mailing proxy statements and reports to shareholders; fees and travel expenses of directors or director members of any advisory board or committee; all expenses incident to the payment of any distribution, whether in shares or cash; charges and expenses of any outside service used for pricing of the Funds’ shares; fees and expenses of legal counsel and of independent auditors in connection with any matter relating to the Funds; membership dues of industry associations; interest payable on Fund borrowings; postage and long-distance telephone charges; insurance premiums on property or personnel (including officers and directors) of the Funds which inure to their benefit; extraordinary expenses (including, but not limited to, legal claims and liabilities and litigation costs and any indemnification related thereto); and all other charges and costs of the Funds’ operation unless otherwise explicitly assumed by the Adviser or the Administrator.

Expenses of the Funds which are not attributable to the operations of any class of shares or Fund are pro-rated among all classes of shares or certain Columbia Funds, including the Funds based upon the relative net assets of each class or Fund. Expenses which are not directly attributable to a specific class of shares but are attributable to a specific Fund are prorated among all the classes of shares of such Fund based upon the relative net assets of each such class of shares. Expenses which are directly attributable to a class of shares are charged against the income available for distribution as dividends to such class of shares.

FUND GOVERNANCE

The Board

Leadership Structure and Risk Oversight

The Board oversees management of the Trust and the Funds. The Board has a duty to act in the best interest of shareholders when supervising and overseeing the management and operations of the Trust. The Board consists of seven Trustees who have extensive and varied experience and skills. Six of the Trustees are Independent Trustees. The Trust currently treats the remaining Trustee, Dr. Anthony M. Santomero, as an “interested person” (as defined in the 1940 Act) of the Columbia Funds (the Interested Trustee) because he serves as a Director of Citigroup, Inc. and CitiBank N.A. companies that may engage from time-to-time in brokerage execution, principal transactions and lending relationships with the Funds or other funds or accounts advised/managed by the Adviser. Further information about the background and qualifications of each of the Trustees can be found in the section Trustee Biographical Information and Qualifications .

The Board has appointed an Independent Trustee to serve in the role of Chairman. The Chairman actively participates in the development of the agendas for Board meetings, presides at Board Meetings and acts as a liaison with service providers, officers, attorneys, and other Trustees generally between meetings. The Chairman may also perform such other functions as may be delegated by the Board from time to time. Except for any duties specified herein or pursuant to the Trust’s charter document, the designation of Chairman does not impose on such Independent Trustee any duties, obligations or liability that are greater than the duties, obligations or liability imposed on such person as a member of the Board generally.

The Board has several standing committees (the Committees), which are an integral part of the Funds’ overall governance and risk management oversight structure. The standing Committees are the Audit Committee, the Governance Committee, the Contracts Review Committee and the Investment Committee. The roles of each Committee are more fully described in the section Standing Committees below.

The Funds have retained the Adviser as the Funds’ investment adviser and administrator. The Adviser provides the Funds with investment advisory services, and is responsible for day-to-day management and administration of the Funds and management of the risks that arise from the Funds’ investments and operations. The Board is responsible for overseeing the Adviser and other service providers in the operation of the Trust, including with respect to risk management functions. The Funds and the Trust are subject to a number of risks, including investment, compliance, operational, and valuation risks, among others. Day-to-day risk management functions are subsumed within the responsibilities of the Adviser, the subadvisers and other service providers (depending on the nature of the risk), who carry out the Funds’ investment management and business affairs. Each of the Adviser, the subadvisers and other service providers have their own, independent interest in risk management, and their policies and methods of carrying out risk management functions will depend, in part, on their analysis of the risks, functions and business models.

Risk oversight forms part of the Board’s general oversight of the Funds and the Trust and is addressed as part of various Board and Committee activities. The Board recognizes that it is not possible to identify all of the risks that may affect a Fund or to develop processes and controls to eliminate or even mitigate their occurrence or effects. As part of its regular oversight of the Trust, the Board, directly or through a Committee, interacts with and reviews reports from, among others, the Adviser, subadvisers, the independent registered public accounting firm for the Fund, and internal auditors for the Adviser or its affiliates, as appropriate, regarding risks faced by the Funds and relevant risk functions. The Board and the Audit Committee also meet periodically with the Funds’ Chief Compliance Officer, to receive reports regarding the compliance of the Funds and their principal service providers with the federal securities laws and their internal compliance policies and procedures. The Board and the Audit Committee review and approve the compliance program of the Fund and certain of its service providers, and also receive periodic and annual reports from the Funds’ Chief Compliance Officer, as required under applicable regulations. The Board, with the assistance of the Investment Committee, reviews investment policies and risks in connection with its review of the Funds’ performance, and meets periodically

with the portfolio managers of the Funds to receive reports regarding the management of the Funds, including their investment risks. In addition, as part of the Board’s periodic review of the Funds’ advisory, subadvisory and other service provider agreements, the Board may consider risk management aspects of their operations and the functions for which they are responsible.

The Independent Trustees have engaged independent legal counsel to assist them in performing their oversight responsibilities. The Board reviews its leadership structure periodically and believes that its structure is appropriate because it allows the Board to exercise informed and independent judgment over matters under its purview, and it allocates areas of responsibility among committees of Trustees and the full Board in a manner that enhances effective oversight. In particular, the Board believes that having an Independent Trustee serve as the chair of the Board and each Committee promotes independence from the Adviser in setting agendas and conducting meetings. The Board believes that its committee structure makes the oversight process more efficient and more effective by allowing smaller groups of Trustees to bring increased focus to matters within the purview of each Committee. The leadership structure of the Board, including the manner in which it conducts its risk oversight role, may be changed, at any time and in the discretion of the Board, including in response to changes in circumstances or the characteristics of the Trust.

Standing Committees

The Trust has four standing Committees, which are the Audit Committee, the Contracts Review Committee, the Governance Committee and the Investment Committee.

In general, the function of the Audit Committee is oversight of the financial aspects of the Trust and Funds and approval of and interaction with the Funds’ Independent Auditors. Management (which generally means the appropriate officers of the Trust, and a Fund’s investment adviser(s), administrator(s) and other key service providers (other than the independent registered public accounting firm)) is primarily responsible for the preparation of the financial statements of each Fund, and the independent registered public accounting firm is responsible for auditing those financial statements. Management also is responsible for maintaining appropriate systems for accounting and “internal controls over financial reporting” (as such term is defined in Rule 30a-3 under the 1940 Act), and the independent registered public accounting firm is primarily responsible for considering such internal controls over financial reporting in connection with its financial statement audits. While the Audit Committee has the duties and powers set forth in the Audit Committee charter, the Audit Committee is not responsible for planning or conducting any Fund audit or for determining whether a Fund’s financial statements are complete and accurate and are in accordance with generally accepted accounting principles.

The Audit Committee has, among other things, specific power and responsibility to: (i) oversee its Funds’ accounting and financial reporting processes and practices, its internal controls over financial reporting and, as appropriate, the internal controls over financial reporting of the Funds maintained by key service providers; (ii) approve, and recommend to the full Board for its approval in accordance with applicable law, the selection and appointment of an independent registered public accounting firm for the Fund prior to the engagement of such independent registered public accounting firm; (iii) pre-approve all audit and non-audit services provided to a Fund by its independent registered public accounting firm, directly or by establishing pre-approval policies and procedures pursuant to which such services may be rendered, provided however, that the policies and procedures are detailed as to the particular service and the Audit Committee is informed of each service, and such policies do not include the delegation to management of the Audit Committee’s responsibilities under the 1934 Act or applicable rules or listing requirements; and (iv) pre-approve all non-audit services provided by a Fund’s independent registered public accounting firm to the Fund’s investment adviser and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to a Fund, if the engagement relates directly to the operations and financial reporting of a Fund. The members of the Audit Committee are William A. Hawkins (Chair), Edward J. Boudreau, Jr. and William P. Carmichael. The Audit Committee members are all Independent Trustees. The Audit Committee met on [ ] occasions during the last fiscal year.

The primary responsibilities of the Contracts Review Committee, as set forth in its charter, include reviewing and making recommendations to the Board as to: (i) contractual arrangements; (ii) the factors considered in approving investment advisory and the investment subadvisory agreements; and (iii) service provider oversight and performance. Among other responsibilities, the Contracts Review Committee also oversees and coordinates activities of consultants and legal or financial experts that may be engaged under certain circumstances. The members of the Contracts Review Committee are R. Glenn Hilliard (Chair), William P. Carmichael, John J. Nagorniak and Anthony M. Santomero. With the exception of the Interested Trustee, the Contracts Review Committee members are all Independent Trustees. The Contracts Review Committee met on [ ] occasions during the last fiscal year.

The primary responsibilities of the Governance Committee include, as set forth in its charter: (i) nominating Independent Trustees; (ii) overseeing issues of corporate governance for the Trust and the Funds; (iii) addressing matters relating to compensation of Trustees who are not current directors, officers or employees of a Fund’s investment adviser or subadviser or any control affiliate thereof, including deferred compensation and retirement policies; and (iv) evaluating each Board and its committee structure as often as it deems necessary or desirable to determine whether each is functioning effectively. The Governance Committee shall determine the nature of the evaluation and its role therein in its sole discretion. The members of the Governance Committee are Minor M. Shaw (Chair), William A. Hawkins, R. Glenn Hilliard and William P. Carmichael (ex officio). The Governance Committee members are all Independent Trustees. The Governance Committee met on [ ] occasions during the last fiscal year.

The primary responsibilities of the Investment Committee are, as set forth in its charter, to assist the Board in carrying out its oversight responsibilities in specific areas of investment management, both by acting as liaison between the full Board and the Adviser on investment matters, and by acting on behalf of the Board with respect to investment issues in extraordinary circumstances when it is impractical to convene a meeting of the full Board. In carrying out these general responsibilities, the Investment Committee assists the Board in connection with issues relating to: the investment policies and procedures adopted for each Fund; appropriate performance benchmarks and other comparative issues; portfolio management staffing and other personnel issues of the Adviser; investment related compliance issues; possible exemptive applications or other relief necessary or appropriate with respect to investment matters; and other investment related matters referred from time to time to the Committee by the full Board. The Committee reports its activities to the full Board on a regular basis and is responsible for making such recommendations with respect to the matters described above and other matters as the Committee may deem necessary or appropriate. The Chairperson of the Investment Committee is Edward J. Boudreau, Jr. Each Trustee is a member of the Investment Committee. With the exception of the Interested Trustee, the Investment Committee members are all Independent Trustees. The Investment Committee met on [ ] occasions during the last fiscal year.

The Trust’s Declaration of Trust does not set forth any specific qualifications to serve as a Trustee other than that each Trustee shall be an individual of at least 21 years of age who is not under a legal disability. The Charter of the Governance Committee also does not set forth any specific qualifications, but does set forth certain factors that the Committee may take into account in considering Trustee candidates. Among the attributes or skills common to all Trustees are their ability to review critically, evaluate, question and discuss information provided to them, to interact effectively with the other Trustees, the Adviser, subadvisers, other service providers, counsel and the independent registered public accounting firm, and to exercise effective and independent business judgment in the performance of their duties as Trustees. Each Trustee’s ability to perform his or her duties effectively has been attained through: (i) the individual’s business and professional experience and accomplishments; (ii) the individual’s experience working with the other Trustees and management; (iii) the individual’s prior experience, if any, serving on the boards of public companies (including, where relevant, other investment companies) and other complex enterprises and organizations; and (iv) his or her educational background, professional training, and/or other life experiences. Generally, no one factor was decisive in determining that an individual should serve as a Trustee.

Following is a summary of each Trustee’s particular professional and other experience that qualifies each person to serve as a Trustee of the Trust as of the date of this SAI:

Edward J. Boudreau, Jr. Mr. Boudreau has been a Trustee of the Trust and of certain other trusts in the Columbia Funds Complex since 2005. In addition, he has over thirty years of business and consulting experience, primarily in the financial services industry, including as the chief executive of a mutual fund management company.

William P. Carmichael. Mr. Carmichael has been a Trustee of the Trust and of certain other trusts in the Columbia Funds Complex since 1999, and has served as Chairman of the Board of the Trust and of certain other trusts in the Columbia Funds Complex since 2003. Mr. Carmichael served in various senior financial and directorship positions with global consumer products companies. Mr. Carmichael is a certified public accountant and a licensed attorney.

William A. Hawkins. Mr. Hawkins has been a Trustee of the Trust and of certain other trusts in the Columbia Funds Complex since 2005. He currently serves as the President and Chief Executive Officer of California General Bank and has over thirty years of executive level experience in the banking industry. Mr. Hawkins is a certified financial planner and a chartered property and casualty underwriter, as well as holding series 7, 24 and 63 licenses from the Financial Industry Regulatory Authority.

R. Glenn Hilliard. Mr. Hilliard has been a Trustee of the Trust and of certain other trusts in the Columbia Funds Complex since 2005. Mr. Hilliard is currently the Chairman and Chief Executive Officer of The Hilliard Group, LLC. He has over twenty years executive level experience in the insurance industry. Mr. Hilliard has served on the Board of Directors and as non-executive chairman of Conseco, Inc. for a number of years. Mr. Hilliard is also a licensed attorney.

John J. Nagorniak. Mr. Nagorniak has been a Trustee of the Trust and of certain other trusts in the Columbia Funds Complex since 2008. Mr. Nagorniak has served in executive level and director positions for over twenty-five years. He is a chartered financial analyst and is currently a Trustee of the Research Foundation of the CFA Institute.

Minor M. Shaw. Ms. Shaw has served as a Trustee of the Trust and of certain other trusts in the Columbia Funds Complex since 2003. Ms. Shaw is the President of certain private companies and is a member of the Board of Piedmont Natural Gas and Blue Cross and Blue Shield of South Carolina. Ms. Shaw also serves as an active member on the boards of numerous educational and public service organizations.

Anthony M. Santomero . Dr. Santomero has been a Trustee of the Trust and of certain other trusts in the Columbia Funds Complex since 2008. Dr. Santomero has over thirty years of experience as a professor of finance and private consultant specializing in issues including risk management, financial restructuring, credit risk evaluation and management, and regulation. He has served as consultant to financial institutions and agencies in the U.S. and various countries in the European Union and the European Community itself, as well as institutions in various countries around the world. Additionally, Dr. Santomero has served as President and Chief Executive Officer of the Federal Reserve Bank of Philadelphia.

The following table provides additional biographical information about the Trustees as of the date of this SAI, including their principal occupations during the past five years, although their specific titles may have varied over the period. The mailing address of each Trustee is: c/o Columbia Management Investment Advisers, LLC, One Financial Center, Mail Stop MA5-515-11-05, Boston, MA 02111.

Independent Trustee Biographical Information


Name, Year of Birth and Position Held with the Trust	Year First Appointed or Elected to a Board in the Columbia Funds Complex	Principal Occupation(s) During the Past Five Years	Number of Funds in the Columbia Funds Complex Overseen	Other Directorships Held by Trustee During the Past Five Years
Edward J. Boudreau, Jr. (Born 1944) Trustee	Indefinite term; Trustee since January 2005	Managing Director – E.J. Boudreau & Associates (consulting), from 2000 through current	52	Trustee – BofA Funds Series Trust

William P. Carmichael (Born 1943) Trustee and Chairman of the Board	Indefinite term; Trustee since 1999	Retired	52	Director – Cobra Electronics Corporation (electronic equipment manufacturer); Simmons Company (bedding); and The Finish Line (athletic shoes and apparel); Trustee – BofA Funds Series Trust

William A. Hawkins (Born 1942) Trustee	Indefinite term; Trustee since January 2005	President and Chief Executive Officer – California Bank, N.A., from January 2008 through current	52	Trustee – BofA Funds Series Trust

R. Glenn Hilliard (Born 1943) Trustee	Indefinite term; Trustee since January 2005	Chairman and Chief Executive Officer – Hilliard Group LLC (investing and consulting), from April 2003 through current; Non-Executive Director & Chairman – Conseco, Inc. (insurance), September 2003 through current; Executive Chairman – Conseco, Inc. (insurance), August 2004 through September 2005	52	Director – Conseco, Inc. (insurance); Trustee – BofA Funds Series Trust

John J. Nagorniak (Born 1944) Trustee	Indefinite term; Trustee since January 2008	Retired; President and Director – Foxstone Financial, Inc. (consulting), 2000 through December 2007; Director – Mellon Financial Corporation affiliates (investing), 2000 through 2007; Chairman – Franklin Portfolio Associates (investing – Mellon affiliate) 1982 through 2007	52	Trustee – Research Foundation of CFA Institute; Director – MIT Investment Company; Trustee – MIT 401k Plan; Trustee – BofA Funds Series Trust


Name, Year of Birth and Position Held with the Trust	Year First Appointed or Elected to a Board in the Columbia Funds Complex	Principal Occupation(s) During the Past Five Years	Number of Funds in the Columbia Funds Complex Overseen	Other Directorships Held by Trustee During the Past Five Years
Minor M. Shaw (Born 1947) Trustee	Indefinite term; Trustee since 2003	President – Micco Corporation and Mickel Investment Group	52	Board Member – Piedmont Natural Gas; Trustee – BofA Funds Series Trust

*Interested Trustee Biographical Information*

Anthony M. Santomero* (Born 1946) Trustee	Indefinite term; Trustee since January 2008	Richard K. Mellon Professor Emeritus of Finance, The Wharton School, University of Pennsylvania, from 2002 through current; Senior Advisor – McKinsey & Company (consulting), 2006 through 2008; President and Chief Executive Officer – Federal Reserve Bank of Philadelphia, 2000 through 2006	52	Director – Renaissance Reinsurance Ltd.; Trustee – Penn Mutual Life Insurance Company; Director – Citigroup; Trustee – BofA Funds Series Trust

The Funds currently treat Mr. Santomero as an “interested person” (as defined in the 1940 Act) of the Funds because he serves as a Director of Citigroup, Inc. and Citibank, N.A. Citigroup, Inc., through its subsidiaries and affiliates, including Citibank, N.A., may engage from time-to-time in brokerage execution, principal transactions and/or lending relationships with the Columbia Funds or other funds or accounts advised/managed by the Adviser.

Compensation

Trustees are compensated for their services to the Columbia Funds Family on a complex-wide basis, as shown in the table below.

Independent Trustee Compensation for the Fiscal Year Ended March 31, 2010

Name of Trustee

Aggregate
Compensation

from
Corporate
Bond Portfolio
for the Fiscal
Year ended
March 31,
2010 ^(a)

Aggregate
Compensation

from
Mortgage- and
Asset-Backed
Portfolio for
the Fiscal
Year ended
March 31,
2010 ^(a)

Aggregate
Compensation

from
Columbia
Short Term
Bond Fund
for the Fiscal
Year ended
March 31,
2010 ^(a)

Aggregate
Compensation
from

Columbia
Total Return

Bond Fund
for the Fiscal
Year ended
March 31,
2010 ^(a)

Aggregate
Compensation

from
Columbia
Short Term
Municipal
Bond Fund for
the Fiscal
Year ended
March 31,
2010 ^(a)

Aggregate
Compensation

from

Columbia
High Income
Fund for the
Fiscal Year
ended
March 31,

2010 ^(a)

Edward J. Boudreau, Jr. ^(b)

William P. Carmichael ^(c)

Minor M. Shaw ^(d)

R. Glenn Hilliard ^(e)

William A. Hawkins ^(f)

John J. Nagorniak ^(g)

Interested Trustee Compensation for the Fiscal Year Ended March 31, 2010

Anthony M. Santomero ^(h)

Independent Trustee Compensation for the Calendar Year Ended December 31, 2009


Name of Trustee		Total Compensation from Columbia Funds Complex for the Calendar Year ended December 31, 2009 ^(a)
Edward J. Boudreau, Jr ^(b)
William P. Carmichael ^(c)
Minor M. Shaw ^(d)
R. Glenn Hilliard ^(e)
William A. Hawkins ^(f)
John J. Nagorniak ^(g)

Interested Trustee Compensation for the Calendar Year Ended December 31, 2009


Anthony M. Santomero ^(h)

^(a)	All Trustees receive reimbursements for reasonable expenses related to their attendance at meetings of the Board or standing committees, which are not included in the amounts shown.

^(b)

During the fiscal year ended March 31, 2010, Mr. Boudreau deferred $[ ] of his compensation from the Fund. During the calendar year ended December 31, 2009, Mr. Boudreau deferred $[ ] of his total compensation from the Columbia Funds pursuant to the deferred compensation plan. As of December 31, 2009, the value of Mr. Boudreau’s account under that plan was $[ ]

^(c)

During the fiscal year ended March 31, 2010, Mr. Carmichael deferred $0 of his compensation from the Fund. During the calendar year ended December 31, 2009, Mr. Carmichael deferred $0 of his total compensation from the Columbia Funds pursuant to the deferred compensation plan. As of December 31, 2009, the value of Mr. Carmichael’s account under that plan was $[ ]

^(d)

During the fiscal year ended March 31, 2010, Ms. Shaw deferred $[ ] of her compensation from the Fund. During the calendar year ended December 31, 2009, Ms. Shaw deferred $[ ] of her total compensation from the Columbia Funds pursuant to the deferred compensation plan. As of December 31, 2009, the value of Ms. Shaw’s account under that plan was $[ ]

^(e)

During the fiscal year ended March 31, 2010, Mr. Hilliard deferred $[ ] of his compensation from the Fund. During the calendar year ended December 31, 2009, Mr. Hilliard deferred $[ ] of his total compensation from the Columbia Funds pursuant to the deferred compensation plan. As of December 31, 2009, the value of Mr. Hilliard’s account under that plan was $[ ]

^(f)	During the fiscal year ended March 31, 2010, Mr. Hawkins deferred $0 of his compensation from the Fund. During the calendar year ended December 31, 2009, Mr. Hawkins deferred $0 of his total compensation from the Columbia Funds pursuant to the deferred compensation plan.

^(g)

During the fiscal year ended March 31, 2010, Mr. Nagorniak deferred $[ ] of his compensation from the Fund. During the calendar year ended December 31, 2009, Mr. Nagorniak deferred $[ ] of his total compensation from the Columbia Funds pursuant to the deferred compensation plan. As of December 31, 2009, the value of Mr. Nagorniak’s account under that plan was $[ ]

^(h)

During the fiscal year ended March 31, 2010, Mr. Santomero deferred $[ ] of his compensation from the Fund. During the calendar year ended December 31, 2009, Mr. Santomero deferred $[ ] of his total compensation from the Columbia Funds pursuant to the deferred compensation plan. As of December 31, 2009, the value of Mr. Santomero’s account under that plan was $[ ]

Columbia Funds Deferred Compensation Plan

Under the terms of the Deferred Fee Agreement (the Deferred Compensation Plan), each eligible Trustee may elect, on an annual basis, to defer receipt of all or a portion of compensation payable to him or her for service as Trustee for that calendar year (expressly, a Trustee may elect to defer his/her annual retainer, his/her attendance fees, or both components, which together comprise total compensation for service). Fees deferred by a Trustee are credited to a book reserve account (the Deferral Account) established by the Columbia Funds, the value of which is derived from the rate of return of one or more Columbia Funds selected by the Trustee (with accruals to the Deferral Account beginning at such time as a Trustee’s fund elections having been established, and fees for service having been paid into such account, and terminating at such time as when proceeds become payable to such Trustee under the Deferred Compensation Plan). Trustees may change their fund elections only in accordance with the provisions of the Deferred Compensation Plan.

Distributions from a Trustee’s Deferral Account will be paid by check, either in a lump sum or in annual installments. Payments made in annual installments are disbursed over a period of up to ten years, following such time as a Trustee may qualify to receive such payments. If a deferring Trustee dies prior to or after the commencement of the disbursement of amounts accrued in his/her Deferral Account, the balance of the account will be distributed to his/her designated beneficiary either in lump sum or in annual payments as established by such Trustee himself/herself, his/her beneficiary or his/her estate. Amounts payable under the Deferred Compensation Plan are not funded or secured in any way, and each deferring Trustee has the status of an unsecured creditor of the Columbia Fund(s) selected by such Trustee.

Beneficial Equity Ownership

As of the date of this SAI, the Trustees and Officers of the Trust, as a group, beneficially owned less than 1% of each class of shares of each Fund. The table below shows, for each Trustee, the amount of Fund equity securities beneficially owned by the Trustee and the aggregate value of all investments in equity securities of the Columbia Funds Family overseen by the Trustees, stated as one of the following ranges: A = $0; B = $1-$10,000; C = $10,001-$50,000; D = $50,001-$100,000; and E = over $100,000.

Independent Trustee Ownership for the Calendar Year Ended December 31, 2009


Trustee	Dollar Range of Equity Securities in the Funds	Aggregate Dollar Range of Equity Securities in all Funds in the Columbia Funds Family Overseen by the Trustees
Edward J. Boudreau, Jr.	Corporate Bond Portfolio – Mortgage- and Asset-Backed Portfolio – Short Term Bond Fund – Total Return Bond Fund – Short Term Municipal Bond Fund – High Income Fund -

William P. Carmichael	Corporate Bond Portfolio – Mortgage- and Asset-Backed Portfolio – Short Term Bond Fund – Total Return Bond Fund – Short Term Municipal Bond Fund – High Income Fund -

Minor M. Shaw	Corporate Bond Portfolio – Mortgage- and Asset-Backed Portfolio – Short Term Bond Fund – Total Return Bond Fund – Short Term Municipal Bond Fund – High Income Fund -

R. Glenn Hilliard	Corporate Bond Portfolio – Mortgage- and Asset-Backed Portfolio – Short Term Bond Fund – Total Return Bond Fund – Short Term Municipal Bond Fund – High Income Fund -

William A. Hawkins	Corporate Bond Portfolio – Mortgage- and Asset-Backed Portfolio – Short Term Bond Fund – Total Return Bond Fund – Short Term Municipal Bond Fund – High Income Fund -

John J. Nagorniak	Corporate Bond Portfolio – Mortgage- and Asset-Backed Portfolio – Short Term Bond Fund – Total Return Bond Fund – Short Term Municipal Bond Fund – High Income Fund -

*Interested Trustee Ownership for the Calendar Year Ended December 31, 2009*

Anthony M. Santomero	Corporate Bond Portfolio – Mortgage- and Asset-Backed Portfolio – Short Term Bond Fund – Total Return Bond Fund – Short Term Municipal Bond Fund – High Income Fund -

The Officers

The following table provides basic information about the Officers of the Trust as of the date of this SAI, including their principal occupations during the past five years, although their specific titles may have varied over the period.


Name, Year of Birth and Address	Position with the Trust	Year First Elected or Appointed to Office	Principal Occupation(s) During the Past Five Years
J. Kevin Connaughton (Born 1964) One Financial Center Boston, MA 02111	President ( Principal Executive Officer )	2009	Senior Vice President and General Manager – Mutual Fund Products, Columbia Management Investment Advisers, LLC since May 2010; President, Columbia Funds, since 2009, and RiverSource Funds, since May 2010 (previously Senior Vice President and Chief Financial Officer, Columbia Funds, from June 2008 to January 2009, Treasurer, Columbia Funds, from October 2003 to May 2008, and senior officer of various other affiliated funds since 2000); Managing Director, Columbia Management Advisors, LLC from December 2004 to April 2010.

Michael G. Clarke (Born 1969) One Financial Center Boston, MA 02111	Senior Vice President and Chief Financial Officer ( Principal Financial Officer )	2009	Vice President, Columbia Management Investment Advisers, LLC since May 2010; Managing Director of Fund Administration, Columbia Management Advisors, LLC, from September 2004 to April 2010; senior officer of Columbia Funds and affiliated funds since 2002.

Scott R. Plummer (Born 1959) 5228 Ameriprise Financial Center Minneapolis, MN 55474	Senior Vice President, Secretary and Chief Legal Officer	2010	Chief Legal Officer and Assistant Secretary, Columbia Management Investment Advisers, LLC since June 2005; Vice President and Lead Chief Counsel – Asset Management, Ameriprise Financial, Inc. since May 2010 (previously Vice President and Chief Counsel – Asset Management, from 2005 to April 2010, and Vice President – Asset Management Compliance from 2004 to 2005); Vice President, Chief Counsel and Assistant Secretary, Columbia Management Investment Distributors, Inc. since 2008; Vice President, General Counsel and Secretary, Ameriprise Certificate Company since 2005; Chief Counsel, RiverSource Distributors, Inc. since 2006; Vice President, General Counsel and Secretary, RiverSource Funds, since December 2006; Senior Vice President, Secretary and Chief Legal Officer, Columbia Funds, since May 2010.


Name, Year of Birth and Address	Position with the Trust	Year First Elected or Appointed to Office	Principal Occupation(s) During the Past Five Years
Linda J. Wondrack (Born 1964) One Financial Center Boston, MA 02111	Senior Vice President and Chief Compliance Officer	2007	Vice President and Chief Compliance Officer, Columbia Management Investment Advisers, LLC since May 2010; Chief Compliance Officer, Columbia Funds, since 2007, and RiverSource Funds, since May 2010; Director (Columbia Management Group, LLC and Investment Product Group Compliance), Bank of America, from June 2005 to April 2010; Director of Corporate Compliance and Conflicts Officer of MFS Investment Management (investment management) from August 2004 to May 2005.

William F. Truscott (Born 1960) 53600 Ameriprise Financial Center Minneapolis, MN 55474	Senior Vice President	2010	Chairman of the Board, Columbia Management Investment Advisers, LLC since May 2010 (previously President, Chairman of the Board and Chief Investment Officer, from 2001 to April 2010); Chief Executive Officer, U.S. Asset Management & President, Annuities, Ameriprise Financial, Inc. since May 2010 (previously President – U.S. Asset Management and Chief Investment Officer from 2005 to April 2010, and Senior Vice President – Chief Investment Officer, from 2001 to 2005); Director, President and Chief Executive Officer, Ameriprise Certificate Company since 2006; Director, Columbia Management Investment Distributors, Inc. since May 2010 (previously Chairman of the Board and Chief Executive Officer from 2008 to April 2010); Chairman of the Board and Chief Executive Officer, RiverSource Distributors, Inc. since 2006.

Colin Moore (Born 1958) One Financial Center Boston, MA 02111	Senior Vice President	2010	Director and Chief Investment Officer, Columbia Management Investment Advisers, LLC since May 2010; Manager, Managing Director and Chief Investment Officer of Columbia Management Advisors, LLC from 2007 to April 2010; Head of Equities, Columbia Management Advisors, LLC from 2002 to 2007.


Name, Year of Birth and Address	Position with the Trust	Year First Elected or Appointed to Office	Principal Occupation(s) During the Past Five Years
Michael A. Jones (Born 1959) 100 Federal Street Boston, MA 02110	Senior Vice President	2010	Director and President, Columbia Management Investment Advisers, LLC since May 2010; President and Director, Columbia Management Investment Distributors, Inc. since May 2010; Manager, Chairman, Chief Executive Officer and President, Columbia Management Advisors, LLC from 2007 to April 2010; Chief Executive Officer, President and Director, Columbia Management Distributors, Inc. from November 2006 to April 2010; previously, co-president and senior managing director at Robeco Investment Management.

Amy Johnson (Born 1965) 5228 Ameriprise Financial Center Minneapolis, MN 55474	Senior Vice President	2010	Senior Vice President and Chief Operating Officer of the Adviser, since May 2010; Chief Administrative Officer, the Adviser from 2009 until May 2010; Vice President – Asset Management and Trust Company Services, the Adviser, 2006-2009; Vice President – Operations and Compliance, the Adviser, 2004-2006; Director of Product Development – Mutual Funds, Ameriprise Financial, 2001-2004.

Joseph F. DiMaria (Born 1968) One Financial Center Boston, MA 02111	Treasurer and Chief Accounting Officer	2008	Vice President, Mutual Fund Administration, Columbia Management Investment Advisers, LLC, since May 2010; Director of Fund Administration, Columbia Management Advisors, LLC from January 2006 to April 2010; Head of Tax/Compliance and Assistant Treasurer, Columbia Management Advisors, LLC, from November 2004 to December 2005.

Marybeth Pilat (Born 1968) One Financial Center Boston, MA 02111	Deputy Treasurer	2010	Vice President, Mutual Fund Administration, Columbia Management Investment Advisers, LLC, since May 2010; Vice President, Investment Operations, Bank of America, from October 2008 to April 2010; Finance Manager, Boston Children’s Hospital from August 2008 to October 2008; Director, Mutual Fund Administration, Columbia Management Advisors, LLC, from May 2007 to July 2008; Vice President, Mutual Fund Valuation, Columbia Management Advisors, LLC, from January 2006 to May 2007; Vice President, Mutual Fund Accounting Oversight, Columbia Management Advisors, LLC from January 2005 to January 2006.


Name, Year of Birth and Address	Position with the Trust	Year First Elected or Appointed to Office	Principal Occupation(s) During the Past Five Years
Julian Quero (Born 1967) One Financial Center Boston, MA 02111	Deputy Treasurer	2008	Vice President, Mutual Fund Administration, Columbia Management Investment Advisers, LLC since May 2010; Director of Fund Administration, Columbia Management Advisors, LLC, from August 2008 to April 2010; Senior Tax Manager, Columbia Management Advisors, LLC from August 2006 to July 2008; Senior Compliance Manager, Columbia Management Advisors, LLC from April 2002 to August 2006.

Stephen T. Welsh (Born 1957) One Financial Center Boston, MA 02111	Vice President	2006	President and Director, Columbia Management Investment Services Corp. since May 2010; President and Director, Columbia Management Services, Inc. from July 2004 to April 2010; Managing Director, Columbia Management Distributors, Inc. from August 2007 to April 2010.

Kathryn Thompson (Born 1967) One Financial Center Boston, MA 02111	Assistant Treasurer	2006	Director, Mutual Fund Accounting Oversight and Treasury of the Adviser, since May 2010; Vice President, Mutual Fund Accounting Oversight of the Previous Adviser from December 2004 to April 2010; Vice President, State Street Corporation (financial services) prior to December 2004.

Paul B. Goucher (Born 1968) 5228 Ameriprise Financial Center Minneapolis, MN 55474	Assistant Secretary	2010	Vice President and Chief Counsel of Ameriprise Financial since January 2010 (formerly Vice President and Group Counsel from November 2008 to January 2010); Director, Managing Director and General Counsel of J. & W. Seligman & Co. Incorporated (Seligman) from July 2008 to November 2008 and Managing Director and Associate General Counsel of Seligman from January 2005 to July 2008.

Ryan C. Larrenaga (Born 1970) One Financial Center Boston, MA 02111	Assistant Secretary	2005	Counsel, Ameriprise Financial since May 2010; Assistant General Counsel, Bank of America from March 2005 to April 2010; Associate, Ropes & Gray LLP (law firm) from 1998 to February 2005.

Christopher O. Petersen (Born 1970) 5228 Ameriprise Financial Center Minneapolis, MN 55474	Assistant Secretary	2010	Vice President and Chief Counsel, Ameriprise Financial since January 2010 (formerly Vice President and Group Counsel or Counsel from April 2004 to January 2010); Assistant Secretary of RiverSource Funds since January 2007.

BROKERAGE ALLOCATION AND OTHER PRACTICES

General Brokerage Policy, Brokerage Transactions and Broker Selection

Subject to policies established by the Board, the Adviser (or the investment subadviser(s) who make(s) the day-to-day investment decisions for a Fund, as applicable) is responsible for decisions to buy and sell securities for each Fund, for the selection of broker/dealers, for the execution of a Fund’s securities transactions and for the allocation of brokerage commissions in connection with such transactions. The Adviser’s primary consideration in effecting a security transaction is to obtain the best net price and the most favorable execution of the order. Purchases and sales of securities on a securities exchange are effected through brokers who charge negotiated commissions for their services. Orders may be directed to any broker to the extent and in the manner permitted by applicable law.

In the over-the-counter market, securities generally are traded on a “net” basis with dealers acting as principals for their own accounts without stated commissions, although the price of a security usually includes a profit to the dealer. In underwritten offerings, securities are bought at a fixed price that includes an amount of compensation to the underwriter, generally referred to as the underwriter’s “concession” or “discount.” On occasion, certain money market instruments may be bought directly from an issuer, in which case no commissions or discounts are paid.

In placing orders for portfolio securities of a Fund, the Adviser gives primary consideration to obtaining the best net prices and most favorable execution. This means that the Adviser will seek to execute each transaction at a price and commission, if any, which provides the most favorable total cost or proceeds reasonably attainable in the circumstances. In seeking such execution, the Adviser will use its best judgment in evaluating the terms of a transaction, and will give consideration to various relevant factors, including, without limitation, the size and type of the transaction, the nature and character of the market for the security, the confidentiality, speed and certainty of effective execution required for the transaction, the general execution and operational capabilities of the broker/dealer, the reputation, reliability, experience and financial condition of the broker/dealer, the value and quality of the services rendered by the broker/dealer in this instance and other transactions and the reasonableness of the spread or commission, if any. Research services received from broker/dealers supplement the Adviser’s own research and may include the following types of information: statistical and background information on industry groups and individual companies; forecasts and interpretations with respect to U.S. and foreign economies, securities, markets, specific industry groups and individual companies; information on political developments; Fund management strategies; performance information on securities and information concerning prices of securities; and information supplied by specialized services to the Adviser and to the Board with respect to the performance, investment activities and fees and expenses of other mutual funds. Such information may be communicated electronically, orally or in written form. Research services also may include the arranging of meetings with management of companies and the provision of access to consultants who supply research information.

The outside research is useful to the Adviser since, in certain instances, the broker/dealers utilized by the Adviser may follow a different universe of securities issuers and other matters than those that the Adviser’s staff can follow. In addition, this research provides the Adviser with a different perspective on financial markets, even if the securities research obtained relates to issues followed by the Adviser. Research services that are provided to the Adviser by broker/dealers are available for the benefit of all accounts managed or advised by the Adviser. In some cases, the research services are available only from the broker/dealer providing such services. In other cases, the research services may be obtainable from alternative sources. The Adviser is of the opinion that because the broker/dealer research supplements rather than replaces the Adviser’s own research, the receipt of such research does not tend to decrease the Adviser’s expenses, but tends to improve the quality of its investment advice. However, to the extent that the Adviser would have bought any such research services had such services not been provided by broker/dealers, the expenses of such services to the Adviser could be considered to have been reduced accordingly. Certain research services furnished by broker/dealers may be useful to the clients of

the Adviser other than the Funds. Conversely, any research services received by the Adviser through the placement of transactions of other clients may be of value to the Adviser in fulfilling its obligations to the Funds. The Adviser is of the opinion that this material is beneficial in supplementing its research and analysis; and, therefore, it may benefit the Trust by improving the quality of the Adviser’s investment advice. The advisory fees paid by the Trust are not reduced because the Adviser receives such services.

Under Section 28(e) of the 1934 Act, the Adviser shall not be “deemed to have acted unlawfully or to have breached its fiduciary duty” solely because under certain circumstances it has caused the account to pay a higher commission than the lowest available. To obtain the benefit of Section 28(e), the Adviser must make a good faith determination that the commissions paid are “reasonable in relation to the value of the brokerage and research services provided by such member, broker, or dealer, viewed in terms of either that particular transaction or his overall responsibilities with respect to the accounts as to which he exercises investment discretion.” Accordingly, the price to a Fund in any transaction may be less favorable than that available from another broker/dealer if the difference is reasonably justified by other aspects of the portfolio execution services offered. Some broker/dealers may indicate that the provision of research services is dependent upon the generation of certain specified levels of commissions and underwriting concessions by the Adviser’s clients, including the Funds.

Commission rates are established pursuant to negotiations with broker/dealers based on the quality and quantity of execution services provided by broker/dealers in light of generally prevailing rates. On exchanges on which commissions are negotiated, the cost of transactions may vary among different broker/dealers. Transactions on foreign stock exchanges involve payment of brokerage commissions that generally are fixed. Transactions in both foreign and domestic over-the-counter markets generally are principal transactions with dealers, and the costs of such transactions involve dealer spreads rather than brokerage commissions. With respect to over-the-counter transactions, the Adviser, where possible, will deal directly with dealers who make a market in the securities involved, except in those circumstances in which better prices and execution are available elsewhere.

In certain instances there may be securities that are suitable for more than one Fund as well as for one or more of the other clients of the Adviser. Investment decisions for each Fund and for the Adviser’s other clients are made with the goal of achieving their respective investment objectives. A particular security may be bought or sold for only one client even though it may be held by, or bought or sold for, other clients. Likewise, a particular security may be bought for one or more clients when one or more other clients are selling that same security. Some simultaneous transactions are inevitable when a number of accounts receive investment advice from the same investment adviser, particularly when the same security is suitable for the investment objectives of more than one client. When two or more clients are engaged simultaneously in the purchase or sale of the same security, the securities are allocated among clients in a manner believed to be equitable to each. In some cases, this policy could have a detrimental effect on the price or volume of the security in a particular transaction that may affect a Fund.

The Funds may participate, if and when practicable, in bidding for the purchase of portfolio securities directly from an issuer in order to take advantage of the lower purchase price available to members of a bidding group. A Fund will engage in this practice, however, only when the Adviser, in its sole discretion, believes such practice to be otherwise in the Funds’ interests.

that the Fund has adopted pursuant to the rule. In this regard, for each transaction, the Board will determine that: (i) the transaction resulted in prices for and execution of securities transactions at least as favorable to the particular Fund as those likely to be derived from a non-affiliated qualified broker/dealer; (ii) the affiliated broker/dealer charged the Fund commission rates consistent with those charged by the affiliated broker/dealer in similar transactions to clients comparable to the Fund and that are not affiliated with the broker/dealer in question; and (iii) the fees, commissions or other remuneration paid by the Fund did not exceed 2% of the sales price of the securities if the sale was effected in connection with a secondary distribution, or 1% of the purchase or sale price of such securities if effected in other than a secondary distribution.

Certain affiliates of Ameriprise Financial, such as its subsidiary banks, may have deposit, loan or commercial banking relationships with the corporate users of facilities financed by industrial development revenue bonds or private activity bonds bought by certain of the Columbia Funds. Ameriprise Financial or certain of its affiliates may serve as trustee, custodian, tender agent, guarantor, placement agent, underwriter, or in some other capacity, with respect to certain issues of securities. Under certain circumstances, the Funds may buy securities from a member of an underwriting syndicate in which an affiliate of Ameriprise Financial is a member. The Trust has adopted procedures pursuant to Rule 10f-3 under the 1940 Act, and intends to comply with the requirements of Rule 10f-3, in connection with any purchases of municipal securities that may be subject to Rule 10f-3.

Given the breadth of the Adviser’s investment management activities, investment decisions for each Fund are not always made independently from those for other funds, or other investment companies and accounts advised or managed by the Adviser. When a purchase or sale of the same security is made at substantially the same time on behalf of one or more of the Columbia Funds and another investment portfolio, investment company or account, the transaction will be averaged as to price and available investments allocated as to amount in a manner which the Adviser believes to be equitable to each Fund and such other funds, investment portfolio, investment company or account. In some instances, this investment procedure may adversely affect the price paid or received by a Fund or the size of the position obtained or sold by the Fund. To the extent permitted by law, the Adviser may aggregate the securities to be sold or bought for the Funds with those to be sold or bought for other funds, investment portfolios, investment companies, or accounts in executing transactions.

See Investment Advisory and Other Services – Other Roles and Relationships of Ameriprise Financial and its Affiliates – Certain Conflicts of Interest for more information about these and other conflicts of interest.

Brokerage Commissions

The following tables describe the amounts of brokerage commissions paid by the Funds during their three most recently completed fiscal years. In certain instances the Funds may pay brokerage commissions to broker/dealers that are affiliates of Ameriprise Financial. As indicated above, all such transactions involving the payment of brokerage commissions to affiliates are done in compliance with Rule 17e-1 under the 1940 Act.

Aggregate Brokerage Commissions Paid by the Funds ^*


Fund	Fiscal Year Ended March 31, 2010	Fiscal Year Ended March 31, 2009		Fiscal Year Ended March 31, 2008
Corporate Bond Portfolio		$	12,273	$	1,862
Mortgage- and Asset-Backed Portfolio		$	0	$	0
Short Term Bond Fund		$	10,309	$	8,123
Total Return Bond Fund		$	89,362	$	57,337
Short Term Municipal Bond Fund		$	0	$	0
High Income Fund		$	36,672	$	75,531

^*	Differences, year to year, in the amount of brokerage commissions paid by a Fund (as disclosed in the table above) were primarily the result of increased market volatility as well as shareholder purchase and redemption activity in the Fund.

The Funds paid no brokerage commissions to affiliated broker/dealers for the fiscal years ended March 31, 2008, 2009 and 2010.

Directed Brokerage

The Funds or the Adviser, through an agreement or understanding with a broker/dealer, or otherwise through an internal allocation procedure, may direct, subject to applicable legal requirements, the Funds’ brokerage transactions to a broker/dealer because of the research services it provides the Funds or the Adviser.

During the fiscal year ended March 31, 2010, no Fund, except High Income Fund, directed brokerage transactions. High Income Fund directed brokerage transactions as follows:


Fund	Amount of Transactions	Amount of Commissions
High Income Fund

Securities of Regular Broker/Dealers

In certain cases, the Funds, as part of their principal investment strategies, or otherwise as a permissible investment, will invest in the common stock or debt obligations of the regular broker/dealers that the Adviser uses to transact brokerage for the Funds.

As of the fiscal year ended March 31, 2010, the Funds owned securities of its “regular brokers or dealers” or their parents, as defined in Rule 10b-1 under the 1940 Act, as shown in the table below.

Investments in Securities of Regular Broker/Dealers as of March 31, 2010


Fund	Broker/Dealer	Dollar Amount of Securities Held
Corporate Bond Portfolio

Mortgage- and Asset-Backed Portfolio

Short Term Bond Fund

Total Return Bond Fund

Short Term Municipal Bond Fund

High Income Fund

Additional Shareholder Servicing Payments

The Funds, along with the Transfer Agent and/or the Distributor and the Adviser may pay significant amounts to financial intermediaries (as defined below), including other Ameriprise Financial affiliates, for providing the types of services that would typically be provided directly by a mutual fund’s transfer agent. The level of payments made to financial intermediaries may vary. A number of factors may be considered in determining payments to a financial intermediary, including, without limitation, the nature of the services provided to shareholders or retirement plan participants that invest in the Fund through retirement plans. These services may include sub-accounting, sub-transfer agency or similar recordkeeping services, shareholder or participant reporting, shareholder or participant transaction processing, and/or the provision of call center support (additional shareholder services). These payments for shareholder servicing support with respect to the Columbia Funds vary by financial intermediary but generally are not expected, with certain limited exceptions, to exceed 0.40% of the average aggregate value of each Fund’s shares in the program on an annual basis for those classes of shares that pay a service fee pursuant to a Rule 12b-1 Plan, and 0.45% of the average aggregate value of each Fund’s shares in the program on an annual basis for those classes of shares that do not pay a service fee pursuant

to a Rule 12b-1 Plan. The Board has authorized the Funds to pay up to 0.15% of the average aggregate value of each Fund’s shares. Such payments will be made by a Fund to the Transfer Agent who will in turn make payments to the financial intermediary for the provision of such additional shareholder services. The Fund’s Transfer Agent, Distributor or their affiliates will pay, from its or their own resources, amounts in excess of the amount paid by the Fund to financial intermediaries in connection with the provision of these additional shareholder services and other services.

For purposes of this section the term “financial intermediary” includes any broker/dealer, bank, bank trust department, registered investment adviser, financial planner, retirement plan or other third party administrator and any other institution having a selling, services or any similar agreement with the Distributor and/or other Ameriprise Financial affiliates.

The Funds also may make additional payments to financial intermediaries that charge networking fees for certain services provided in connection with the maintenance of shareholder accounts through the NSCC.

In addition, the Distributor and other Ameriprise Financial affiliates may make lump sum payments to selected financial intermediaries receiving shareholder servicing payments in reimbursement of printing costs for literature for participants, account maintenance fees or fees for establishment of the Funds on the financial intermediary’s system or other similar services.

As of the date of this SAI, the Distributor and/or other Ameriprise Financial affiliates had agreed to make shareholder servicing payments with respect to the Columbia Funds to the financial intermediaries or their affiliates shown below.

Recipients of Shareholder Servicing Payments with Respect to the Columbia Funds from the Distributor and/or other Ameriprise Financial Affiliates

•

Acclaim Benefits, Inc.

•

A.G. Edwards

•

Alerus Retirement Solutions

•

Ameriprise Financial Services, Inc.*

•

Bank of America, N.A.

•

Benefit Plan Administrators

•

Bisys Retirement Services

•

Charles Schwab & Co.

•

Charles Schwab Trust Co.

•

Citigroup Global Markets Inc.

•

CitiStreet LLC

•

City National Bank

•

Compensation & Capital Administrative Services, Inc.

•

CPI Qualified Plan Consultants

•

Daily Access Concepts, Inc.

•

Digital Retirement Solutions

•

Dreyfus

•

Edward D. Jones & Co., L.P.

•

E*Trade Group, Inc.

•

ExpertPlan

•

Fidelity Investments Institutional Operations Co.

•

First Clearing LLC

•

Genworth Financial

•

GPC Securities, Inc.

•

Guardian Life Insurance Company

•

GWFS Equities, Inc.

•

Hartford Life Insurance Company

•

Hewitt Associates LLC

•

ICMA Retirement Corporation

•

ING Life Insurance and Annuity Company

•

ING Institutional Plan Services, LLP

•

John Hancock Life Insurance Company (USA)

•

John Hancock Life Insurance Company of New York

•

JP Morgan Retirement Plan Services LLC

•

Lincoln Financial Group

•

LPL Financial Corporation

•

Marshall & Illsley Trust Company

•

Massachusetts Mutual Life Insurance Company

•

Matrix Settlement & Clearance Services

•

Mercer HR Services, LLC

•

Merrill Lynch Life Insurance Company

•

Merrill Lynch, Pierce, Fenner & Smith Incorporated

•

Mid Atlantic Capital Corporation

•

Morgan Keegan & Co., Inc.

•

Morgan Stanley & Co., Incorporated

•

MSCS Financial Services, LLC

•

National Investor Services Corp.

•

Newport Retirement Services, Inc.

•

New York State Deferred Compensation Plan

•

NYLife Distributors LLC

•

PNC Advisors

•

Princeton Retirement Group

•

Principal Life Insurance Company

•

Prudential Insurance Company of America

•

Prudential Retirement Insurance & Annuity Co.

•

Reliance Trust Company

•

Robert W. Baird & Co., Inc.

•

Royal Alliance Associates, Inc.

•

Standard Retirement Services, Inc.

•

TD Ameritrade Clearing Inc.

•

TD Ameritrade Trust Company

•

Teachers Insurance and Annuity Association of America

•

The 401k Company

•

T. Rowe Price Group, Inc.

•

The Vanguard Group, Inc.

•

Unified Trust Company, N.A.

•

UPromise Investments, Inc.

•

VALIC Retirement Services

•

Wachovia Bank, N.A.

•

Wachovia Securities, LLC

•

Wells Fargo Bank, N.A.

•

Wells Fargo Funds Management, LLC

•

Wilmington Trust Corporation

•

Wilmington Trust Retirement & Institutional Services Company

*	Ameriprise Financial affiliate

The Distributor and/or other Ameriprise Financial affiliates may enter into similar arrangements with other financial intermediaries from time to time. Therefore, the preceding list is subject to change at any time without notice.

Additional Financial Intermediary Payments

Financial intermediaries may receive different commissions, sales charge reallowances and other payments with respect to sales of different classes of shares of the Funds. These other payments may include servicing payments to retirement plan administrators and other institutions at rates up to those described above under Brokerage Allocation and Other Practices – Additional Shareholder Servicing Payments . For purposes of this section the term “financial intermediary” includes any broker/dealer, bank, bank trust department, registered investment Adviser, financial planner, retirement plan or other third party administrator and any other institution having a selling, services or any similar agreement with the Distributor and other Ameriprise Financial affiliates.

The Distributor and other Ameriprise Financial affiliates may pay additional compensation to selected financial intermediaries, including other Ameriprise Financial affiliates, under the categories described below. These categories are not mutually exclusive, and a single financial intermediary may receive payments under all categories. A financial intermediary also may receive payments described above in Brokerage Allocation and Other Practices – Additional Shareholder Servicing Payments . These payments may create an incentive for a financial intermediary or its representatives to recommend or offer shares of a Fund to its customers. The amount of payments made to financial intermediaries may vary. In determining the amount of payments to be made, the Distributor and other Ameriprise Financial affiliates may consider a number of factors, including, without limitation, asset mix and length or relationship with the financial intermediary, the size of the customer/shareholder base of the financial intermediary, the manner in which customers of the financial intermediary make investments in the Funds, the nature and scope of marketing support or services provided by the financial intermediary (as described more fully below) and the costs incurred by the financial intermediary in connection with maintaining the infrastructure necessary or desirable to support investments in the Funds.

These additional payments by the Distributor and other Ameriprise Financial affiliates are made pursuant to agreements between the Distributor and other Ameriprise Financial affiliates and financial intermediaries, and do not change the price paid by investors for the purchase of a share, the amount a Fund will receive as proceeds from such sales or the distribution fees and expenses paid by the Fund as shown under the heading Fees and Expenses of the Fund/Portfolio in the Fund’s prospectuses.

Marketing Support Payments

The Distributor and the Adviser may make payments, from their own resources, to certain financial intermediaries, including other Ameriprise Financial affiliates, for marketing support services relating to the Columbia Funds, including, but not limited to, business planning assistance, educating financial intermediary personnel about the Funds and shareholder financial planning needs, placement on the financial intermediary’s preferred or recommended fund list or otherwise identifying the Funds as being part of a complex to be accorded a higher degree of marketing support than complexes not making such payments, access to sales meetings, sales representatives and management representatives of the financial intermediary, client servicing and systems infrastructure support. These payments are generally based upon one or more of the following factors: average net assets of the Columbia Funds distributed by the Distributor attributable to that financial intermediary, gross sales of the Columbia Funds distributed by the Distributor attributable to that financial intermediary, reimbursement of ticket charges (fees that a financial intermediary firm charges its representatives for effecting transactions in fund shares) or a negotiated lump sum payment.

While the financial arrangements vary for each financial intermediary, the marketing support payments with respect to the Columbia Funds to each financial intermediary generally are expected to be between 0.15% and 0.50% on an annual basis for payments based on average net assets of a Fund attributable to the financial intermediary. The Distributor and the Adviser may make payments in materially larger amounts or on a basis materially different from those described above when dealing with certain affiliates of Bank of America. Such increased payments to the Bank of America affiliates may enable the Bank of America affiliate to offset credits that it may provide to customers.

As of the date of this SAI, the Distributor and/or the Adviser had agreed to make marketing support payments to the financial intermediaries or their affiliates shown below.

Recipients of Marketing Support Payments with Respect to the Columba Funds from the Distributor and/or other Ameriprise Financial Affiliates

•

AIG Advisor Group

•

Ameriprise Financial Services, Inc.*

•

AXA Advisors, LLC

•

Banc of America Investment Services, Inc.

•

Banc of America Securities LLC

•

Bank of America, N.A.

•

Bank of New York

•

Citibank, N.A.

•

Citigroup Global Markets Inc.

•

Commonwealth Financial Network

•

Custodial Trust Company

•

Fidelity Brokerage Services, Inc.

•

Genworth Financial, Inc.

•

Goldman, Sachs & Co.

•

GunAllen Financial, Inc.

•

Harris Corporation

•

ING Life Insurance and Annuity Co.

•

J.J.B. Hilliard, W.L. Lyons, Inc.

•

J.P. Morgan Clearing Corp.

•

Liberty Life Insurance Co.

•

Lincoln Financial Advisors Corp.

•

Linsco/Private Ledger Corp.

•

Mellon Financial Markets, LLC

•

Merrill Lynch Life Insurance Company

•

Merrill Lynch, Pierce, Fenner & Smith Incorporated

•

Morgan Stanley & Co. Incorporated

•

MSCS Financial Services, LLC

•

National Financial Services LLC

•

Pershing LLC

•

Prudential Investment Management Services, LLC

•

Raymond James & Associates, Inc.

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Raymond James Financial Services, Inc.

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SEI Investments Inc.

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State Street Global Markets, LLC

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Transamerica Corporation

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UBS Financial Services Inc.

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US Bank National Association

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Wachovia Securities LLC

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Webster Investment Services, Inc.

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Wells Fargo Corporate Trust Services

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Wells Fargo Funds Management LLC

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Wells Fargo Investments, LLC

*	Ameriprise Financial affiliate

The Distributor and/or the Adviser may enter into similar arrangements with other financial intermediaries from time to time. Therefore, the preceding list is subject to change at any time without notice.

Other Payments

From time to time, the Distributor, from its own resources, may provide additional compensation to certain financial intermediaries that sell or arrange for the sale of shares of the Funds to the extent not prohibited by laws or the rules of any self-regulatory agency, such as the Financial Industry Regulatory Authority (FINRA). Such compensation provided by the Distributor may include financial assistance to financial intermediaries that enable the Distributor to participate in and/or present at financial intermediary-sponsored conferences or seminars, sales or training programs for invited registered representatives and other financial intermediary employees, financial intermediary entertainment and other financial intermediary-sponsored events, and travel expenses, including lodging incurred by registered representatives and other employees in connection with prospecting, retention and due diligence trips. The Distributor makes payments for entertainment events it deems appropriate, subject to the Distributor’s internal guidelines and applicable law. These payments may vary depending upon the nature of the event.

Your financial intermediary may charge you fees or commissions in addition to those disclosed in this SAI. You should consult with your financial intermediary and review carefully any disclosure your financial intermediary provides regarding its services and compensation. Depending on the financial arrangement in place at any particular time, a financial intermediary and its financial consultants may have a financial incentive for recommending a particular Fund or a particular share class over other funds or share classes. See Investment Advisory and Other Services – Other Roles and Relationships of Ameriprise Financial and its Affiliates – Certain Conflicts of Interest for more information.

CAPITAL STOCK AND OTHER SECURITIES

Description of the Trust’s Shares

The Funds offer shares in the classes shown in the table below. Subject to certain limited exceptions discussed in each Fund’s prospectuses, a Fund may no longer be accepting new investments from current shareholders or prospective investors. Class B shares of the Funds are closed to new investments, except for certain limited transactions from existing investors in Class B shares. Additional Class B shares of the Funds will be issued only in connection with (i) reinvestment of dividends and/or capital gain distributions in Class B shares of each Fund by the Fund’s existing Class B shareholders and (ii) exchanges by shareholders invested in Class B shares of a Columbia Fund may exchange those shares for Class B shares of a Fund. The Funds, however, may at any time and without notice, offer any of these classes to the general public for investment.

The Trust’s Amended and Restated Declaration of Trust (Declaration of Trust) permits it to issue an unlimited number of full and fractional shares of beneficial interest of each Fund, without par value, and to divide or combine the shares of any series into a greater or lesser number of shares of that Fund without thereby changing the proportionate beneficial interests in that Fund and to divide such shares into classes. Each share of a class of a Fund represents an equal proportional interest in that Fund with each other share in the same class and is entitled to such distributions out of the income earned on the assets belonging to that Fund as are declared in the discretion of the Board. However, different share classes of a Fund pay different distribution amounts because each share class has different expenses. Each time a distribution is made, the net asset value per share of the share class is reduced by the amount of the distribution.

Share Classes Offered by the Funds

Fund

Shares

Class A
Shares

Class B
Shares*

Class C
Shares

Class Y
Shares**

Class Z
Shares

Corporate Bond Portfolio

Mortgage- and Asset-Backed Portfolio

Short Term Bond Fund

Total Return Bond Fund

Short Term Municipal Bond Fund

High Income Fund

Class B shares of the Funds are closed to new investments, except for certain limited transactions from existing investors in Class B shares. Additional Class B shares of the Funds will be issued only in connection with (i) reinvestment of dividends and/or capital gain distributions in Class B shares of each Fund by the Fund’s existing Class B shareholders and (ii) exchanges by shareholders invested in Class B shares of a Columbia Fund may exchange those shares for Class B shares of a Fund. See the prospectuses for Class B shares of the Funds for details.

**	The Fund also offers Class Y shares, which are included in a different statement of additional information.

Restrictions on Holding or Disposing of Shares

There are no restrictions on the right of shareholders to retain or dispose of the Funds’ shares, other than the possible future termination of the Funds. The Funds may be terminated by reorganization into another mutual fund or by liquidation and distribution of their assets. Unless terminated by reorganization or liquidation, the Funds will continue indefinitely.

Shareholder Liability

Effectively, this means that a shareholder of the Funds will not be personally liable for payment of the Funds’ debts except by reason of his or her own conduct or acts. In addition, a shareholder could incur a financial loss on account of the Funds’ obligation only if the Funds had no remaining assets with which to meet such obligation. We believe that the possibility of such a situation arising is extremely remote.

Dividend Rights

The shareholders of a Fund are entitled to receive any dividends or other distributions declared for the Fund. No shares have priority or preference over any other shares of the Funds with respect to distributions. Distributions will be made from the assets of the Funds, and will be paid pro rata to all shareholders of each Fund (or class) according to the number of shares of each Fund (or class) held by shareholders on the record date. The amount of income dividends per share may vary between separate share classes of the Funds based upon differences in the way that expenses are allocated between share classes pursuant to a multiple class plan.

Voting Rights and Shareholder Meetings

Shareholders have the power to vote only as expressly granted under the 1940 Act or under Delaware statutory trust law. Shareholders have no independent right to vote on any matter, including the creation, operation, dissolution or termination of the Trust. Shareholders have the right to vote on other matters only as the Board authorizes. Currently, the 1940 Act requires that shareholders have the right to vote, under certain circumstances, to: (i) elect Trustees; (ii) approve investment advisory agreements and principal underwriting agreements; (iii) approve a change in subclassification of a Fund; (iv) approve any change in fundamental investment policies; (v) approve a distribution plan under Rule 12b-1 under the 1940 Act; and (vi) to terminate the independent accountant.

With respect to matters that affect one class but not another, shareholders vote as a class; for example, the approval of a distribution plan applicable to that class. Subject to the foregoing, all shares of the Trust have equal voting rights and will be voted in the aggregate, and not by Fund, except where voting by Fund is required by law or where the matter involved only affects one Fund. For example, a change in a Fund’s fundamental investment policy affects only one Fund and would be voted upon only by shareholders of the Fund involved. Additionally, approval of an investment advisory agreement or investment subadvisory agreement, since it only affects one Fund, is a matter to be determined separately by each Fund. Approval by the shareholders of one Fund is effective as to that Fund whether or not sufficient votes are received from the shareholders of the other series to approve the proposal as to those Funds. Shareholders are entitled to one vote for each whole share held and a proportional fractional vote for each fractional vote held, on matters on which they are entitled to vote. Fund shareholders do not have cumulative voting rights. The Trust is not required to hold, and has no present intention of holding, annual meetings of shareholders.

Liquidation Rights

In the event of the liquidation or dissolution of the Trust or the Funds, shareholders of the Funds are entitled to receive the assets attributable to the relevant class of shares of the Funds that are available for distribution and to a distribution of any general assets not attributable to a particular investment portfolio that are available for distribution in such manner and on such basis as the Board may determine.

Preemptive Rights

There are no preemptive rights associated with Fund shares.

Conversion Rights

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the prospectuses for Class B shares of the Funds, shareholders have the right, which is subject to change by the Board, to convert or “exchange” shares of one class for another. Such right is outlined and subject to certain conditions set forth in each Fund’s prospectuses.

Redemptions

Each Fund’s dividend, distribution and redemption policies can be found in its prospectuses under the headings Buying, Selling and Exchanging Shares and Distributions and Taxes . However, the Board may suspend the right of shareholders to sell shares when permitted or required to do so by law or compel sales of shares in certain cases.

Sinking Fund Provisions

The Trust has no sinking fund provisions.

Calls or Assessment

All Fund shares are issued in uncertificated form only and when issued will be fully paid and non-assessable by the Trust.

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PURCHASE, REDEMPTION AND PRICING OF SHARES

Purchase and Redemption

An investor may buy, sell and exchange shares in the Funds utilizing the methods, and subject to the restrictions, described in the Funds’ prospectuses. The following information supplements information in the Funds’ prospectuses.

The Funds have authorized one or more broker/dealers to accept buy and sell orders on the Funds’ behalf. These broker/dealers are authorized to designate other intermediaries to accept buy and sell orders on the Funds’ behalf. The Funds will be deemed to have received a buy or sell order when an authorized broker/dealer, or, if applicable, a broker/dealer’s authorized designee, accepts the order. Customer orders will be priced at each Fund’s net asset value next computed after they are accepted by an authorized broker/dealer or the broker’s authorized designee.

The Trust also may make payment for sales in readily marketable securities or other property if it is appropriate to do so in light of the Trust’s responsibilities under the 1940 Act.

Under the 1940 Act, the Funds may suspend the right of redemption or postpone the date of payment for shares during any period when (i) trading on the NYSE is restricted by applicable rules and regulations of the SEC; (ii) the NYSE is closed for other than customary weekend and holiday closings; (iii) the SEC has by order permitted such suspension; (iv) an emergency exists as determined by the SEC. (The Funds may also suspend or postpone the recordation of the transfer of their shares upon the occurrence of any of the foregoing conditions).

The Trust has elected to be governed by Rule 18f-1 under the 1940 Act, as a result of which each Fund is obligated to redeem shares, subject to the exceptions listed above, with respect to any one shareholder during any 90-day period, solely in cash up to the lesser of $250,000 or 1% of the net asset value of each Fund at the beginning of the period.

Tax-Advantaged Retirement Plans (Retirement Plans). The Transfer Agent maintains prototype tax-qualified plans, including Pension and Profit-Sharing Plans, for individuals, corporations, employees and the self-employed. The minimum initial Retirement Plan investment is $1,000, applied at the plan level. BANA is the custodian/trustee and plan sponsor of the Columbia Management prototype plans offered through the Distributor. In general a $20 annual fee is charged.

Participants in Retirement Plans not sponsored by BANA, not including IRAs, may be subject to an annual fee of $20 unless the Retirement Plan maintains an omnibus account with the Transfer Agent. Participants in BANA sponsored prototype plans (other than IRAs) who liquidate the total value of their account may also be charged a $20 close-out processing fee payable to the Transfer Agent. The close-out fee applies to plans opened after September 1, 1996. The fee is in addition to any applicable CDSC. The fee will not apply if the participant uses the proceeds to open a Columbia Management IRA Rollover account in any fund distributed by the Distributor, or if the Retirement Plan maintains an omnibus account.

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

Front-End Sales Charge Waivers

The investors listed below can buy Class A shares or Class T shares without paying a front-end sales charge.

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Employees of Ameriprise Financial (and its predecessors), its affiliates and subsidiaries.

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Trustees of funds advised or administered by the Adviser.

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Directors, officers and employees of the Adviser, the Distributor, and their respective successors, any investment subadviser and companies affiliated with the Adviser.

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Insurance company separate accounts for the benefit of group retirement plans.

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Registered representatives and employees of selling and servicing agents (including their affiliates) that are parties to dealer agreements or other sales arrangements with the Distributor.

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Broker/dealers if purchases are in accordance with the internal policies and procedures of the employing broker/dealer and made for their own investment purposes.

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Employees or partners of any service provider to the Columbia Funds.

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Families of the parties listed above and their beneficial accounts. Family members include: spouses, parents, stepparents, legal guardians, children, stepchildren, fathers-in-law and mothers-in-law.

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Individuals receiving a distribution from an Ameriprise Financial trust, fiduciary, custodial or other similar account may use the proceeds of that distribution to buy Class A shares without paying a front-end sales charge, as long as the proceeds are invested in the funds within 90 days of the date of distribution.

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Registered broker/dealer firms that have entered into a dealer agreement with the Distributor may buy Class A shares without paying a front-end sales charge for their investment account only.

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Banks, trust companies and thrift institutions, acting as fiduciaries.

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Any shareholder who owned shares of any fund of Columbia Acorn Trust (formerly named Liberty Acorn Trust) on September 29, 2000 (when all of the then outstanding shares of Columbia Acorn Trust were re-designated Class Z shares) and who since that time has remained a shareholder of any Fund, may buy Class A shares of any Fund without paying a front-end sales charge in those cases where a Columbia Fund Class Z share is not available.

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Galaxy Fund shareholders prior to December 1, 1995; and shareholders who (i) bought Galaxy Fund Prime A shares without paying a front-end sales charge and received Class A shares in exchange for those shares during the Galaxy/Liberty Fund reorganization; and (ii) continue to maintain the account in which the Prime A shares were originally bought.

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(For Class T shares only) Shareholders who (i) bought Galaxy Fund Retail A shares at net asset value and received Class T shares in exchange for those shares during the Galaxy/Liberty Fund reorganization; and (ii) continue to maintain the account in which the Retail A shares were originally bought; and Boston 1784 Fund shareholders on the date that those funds were reorganized into Galaxy Funds.

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Class A, Class E and Class T shares (Class E shares and Class T shares are not currently open to new investors) of certain funds may also be bought at reduced or no sales charge by clients of dealers, brokers or registered investment advisers that have entered into arrangements with the Distributor pursuant to which the funds are included as investment options in wrap fee accounts, other managed agency/asset allocation accounts or programs involving fee-based compensation arrangements, and by participants in certain retirement plans.

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Certain pension, profit-sharing or other employee benefit plans offered to non-U.S. investors.

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At the Fund’s discretion, front-end sales charges may be waived for shares issued in plans of reorganization, such as mergers, asset acquisitions and exchange offers, to which the Columbia Funds are a party.

Investors can also buy Class A shares without paying a sales charge if the purchase is made from the proceeds of a sale from any Columbia Fund Class A, B, C or T shares within 365 days, up to the amount of the sales proceeds. In addition, shareholders of the money market fund series of B of A Funds Series Trust, which were formerly referred to as the Columbia Money Market Funds (the Former Columbia Money Market Funds),

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can also buy Class A shares of the Columbia Funds without paying a sales charge if the purchase is made from the proceeds of a sale of shares from a Former Columbia Money Market Fund within 365 days, up to the amount of the sales proceeds, provided that the proceeds are from the sale of shares of a Former Columbia Money Market Fund purchased on or before April 30, 2010. To be eligible for these reinstatement privileges the purchase must be made into an account for the same owner, but does not need to be into the same Columbia Fund from which the shares were sold. The Transfer Agent, Distributor or their agents must receive a written reinstatement request within 365 days after the shares are sold and the purchase of Class A shares through this reinstatement privilege will be made at the NAV of such shares next calculated after the request is received in good order.

Contingent Deferred Sales Charge Waivers (Class A, Class B and Class C Shares)

Shareholders won’t pay a CDSC in the following circumstances:

Death: CDSCs may be waived on sales following the death of: (i) the sole shareholder on an individual account; (ii) a joint tenant on an account; or (iii) the beneficiary of a Uniform Gifts to Minors Act (UGMA), Uniform Transfers to Minors Act (UTMA) or other custodial account. If the account is transferred to an account registered in the name of the deceased’s estate, the CDSC will be waived on any sale from the estate account. If the account is transferred to a new registration and then a sale is requested, the applicable CDSC will be charged.

Disability: CDSCs may be waived on sales after the sole shareholder on an individual account or a joint tenant on a joint tenant account becomes disabled (as defined by Section 72(m)(7) of the Code). To be eligible for such a waiver: (i) the disability must arise after the account is opened and (ii) a letter from a physician must be signed under penalty of perjury stating the nature of the disability. If the account is transferred to a new registration and then shares are sold, the applicable CDSC will be charged.

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

Health savings accounts: CDSCs may be waived on shares sold by health savings accounts sponsored by third party platforms, including those sponsored by Ameriprise Financial affiliates.

Medical payments: Upon request by a shareholder, CDSCs may be waived on (i) shares sold for medical payments that exceed 7.5% of income and (ii) distributions made to pay for insurance by an individual who has separated from employment and who has received unemployment compensation under a federal or state program for at least twelve weeks.

Systematic Withdrawal Plan (SWP): CDSCs may be waived on sales occurring pursuant to a SWP established with the Transfer Agent, to the extent that the sales do not exceed, on an annual basis, 12% of the account’s value as long as distributions are reinvested. Otherwise, a CDSC will be charged on SWP sales until this requirement is met.

Qualified retirement plans: CDSCs may be waived on shares (except for Class B shares) sold by certain group retirement plans held in omnibus accounts.

Redemptions under certain retirement plans and accounts: CDSCs may be waived on shares sold in connection with distributions from qualified retirement plans, government (Section 457) plans, individual retirement accounts or custodial accounts under Section 403(b)(7) of the Code following normal retirement or the attainment of age 59 ¹ / 2 .

Loans from qualified retirement plans: CDSCs may be waived on shares sold in connection with loans from qualified retirement plans to shareholders.

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Accounts liquidated by Distributor: CDSCs may be waived for shares sold under the Distributor’s right to liquidate a shareholder’s account, including but not limited to, instances where the aggregate net asset value of Class A, Class B or Class C shares held in the account is less than the minimum account size.

Returns of excess contributions: CDSCs may be waived on sales required to return excess contributions made to retirement plans or individual retirement accounts, so long as the financial intermediary returns the applicable portion of any commission paid by the Distributor.

Return of commission: CDSCs may be waived on shares sold by intermediaries that are part of the Columbia Funds selling group where the intermediary has entered into an agreement with Columbia Funds not to receive (or to return if received) all or any applicable portion of an upfront commission.

Plans of reorganization: At a Fund’s discretion, CDSCs may be waived for shares issued in connection with plans of reorganization, such as mergers, asset acquisitions and exchange offers, to which the Fund is a party.

Anti-Money Laundering Compliance

The Funds are required to comply with various anti-money laundering laws and regulations. Consequently, the Funds may request additional required information from you to verify your identity. Your application will be rejected if it does not contain your name, social security number, date of birth and permanent street address. If at any time the Funds believe a shareholder may be involved in suspicious activity or if certain account information matches information on government lists of suspicious persons, the Funds may choose not to establish a new account or may be required to “freeze” a shareholder’s account. The Funds also may be required to provide a governmental agency with information about transactions that have occurred in a shareholder’s account or to transfer monies received to establish a new account, transfer an existing account or transfer the proceeds of an existing account to a governmental agency. In some circumstances, the law may not permit the Funds to inform the shareholder that it has taken the actions described above.

Offering Price

The share price of each Fund is based on each Fund’s net asset value per share, which is calculated separately for each class of shares as of the close of regular trading on the NYSE (which is usually 4:00 p.m. Eastern time unless the NYSE closes earlier) on each day the Funds are open for business, unless the Board determines otherwise.

The value of each Fund’s portfolio securities for which a market quotation is available is determined in accordance with the Trust’s valuation procedures. In general terms, the valuation procedures provide that domestic exchange traded securities (other than NASDAQ listed equity securities) generally will be valued at their last traded sale prices as reported on the principal exchange where those securities are traded. If no sales of those securities are reported on a particular day on the principal exchange, the securities generally will be valued at the mean between the latest bid and asked prices as reported on the principal exchange where those securities are traded. Securities traded on a foreign securities exchange will generally be valued at their last sale prices on the exchange where the securities are primarily traded, or in the absence of a reported sale on a particular day, at their bid prices (in the case of securities held long) or ask prices (in the case of securities held short) as reported by that exchange. Securities traded primarily on NASDAQ will generally be valued at the NASDAQ Official Closing Price (NOCP) (which is the last trade price at or before 4:00:02 p.m. (Eastern Time) adjusted up to NASDAQ’s best bid price if the last trade price is below such bid price or adjusted down to NASDAQ’s best ask price if the last trade price is above such ask price). If no NOCP is available, the security will generally be valued at the last sale price shown on NASDAQ prior to the calculation of the NAV of the Fund. If no sale price is shown on NASDAQ, the latest bid price will be used. If no sale price is shown and no latest bid price is available, the price will be deemed “stale” and the value will be determined in accordance with the Funds’ fair valuation procedures.

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Securities not traded upon any exchange will generally be valued at the mean between the latest bid and asked prices based upon quotes furnished by the appropriate market makers. If quoted prices are unavailable or are believed to be inaccurate, market values will generally be determined based on quotes obtained from one or more broker(s) or dealer(s) or based on a price obtained from a reputable independent pricing service.

Financial futures will generally be valued at the latest reported sales price. Forward foreign currency contracts will generally be valued using market quotations from a widely used quotation system that reflects the current cost of covering or off-setting the contract. Exchange traded options will generally be valued at the latest reported sales price on their exchange. If there is no reported sale on the valuation date, the options will generally be valued at the mean between the latest bid and asked prices.

Over-the-counter derivatives will generally be valued at fair value in accordance with the Funds’ fair valuation procedures.

Repurchase agreements will generally be valued at a price equal to the amount of the cash invested in the repurchase agreement at the time of valuation. The market value of the securities underlying a repurchase agreement will be determined in accordance with the procedures above, as appropriate, for the purpose of determining the adequacy of collateral.

Shares of open-end investment companies held in each Fund’s portfolio will generally be valued at the latest net asset value reported by the investment company.

Debt securities will generally be valued by a pricing service which may employ a matrix or other indications of value, including but not limited to broker quotes, to determine valuations for normal institutional size trading units. The matrix can take into account various factors including, without limitation, bids, yield spreads, and/or other market data and specific security characteristics ( e.g. , credit quality, maturity and coupon rate). Debt securities for which a pricing service does not furnish valuations and for which market quotations are readily available will generally be valued based on the mean of the latest bid prices obtained from one or more dealers. Debt securities with remaining maturities of 60 days or less will, absent unusual circumstances, be valued at amortized cost.

Securities for which market quotations are not readily available for any reason, including that the latest quotation is deemed unreliable or unreasonable, securities and other assets and liabilities are valued at “fair value” as determined in good faith by the Adviser’s valuation committee. In general, any one or more of the following factors may be taken into account in determining fair value: the fundamental analytical data relating to the security; the value of other financial instruments, including derivative securities, traded on other markets or among dealers; trading volumes on markets, exchanges, or among dealers; values of baskets of securities traded on other markets; changes in interest rates; observations from financial institutions; government (domestic or foreign) actions or pronouncements; other news events; information as to any transactions or offers with respect to the security; price and extent of public trading in similar securities of the issuer or comparable companies; nature and expected duration of the event, if any, giving rise to the valuation issue; pricing history of the security; the relative size of the position in the portfolio; and other relevant information.

With respect to securities traded on foreign markets, the following factors also may be relevant: the value of foreign securities traded on other foreign markets; ADR trading; closed-end fund trading; foreign currency exchange activity; and the trading of financial products that are tied to baskets of foreign securities, such as World Equity Benchmark Shares™.

The Board has determined, and the valuation procedures provide, that in certain circumstances it may be necessary to use an alternative valuation method, such as in-kind redemptions with affiliated benefit plans where the Department of Labor requires that valuation to be done in accordance with Rule 17a-7 of the 1940 Act.

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TAXATION

The following information supplements and should be read in conjunction with the section in the Funds’ prospectuses entitled Distributions and Taxes . The prospectuses generally describe the U.S. federal income tax treatment of distributions by the Funds. This section of the SAI provides additional information concerning U.S. federal income taxes. It is based on the Code, applicable Treasury Regulations, judicial authority, and administrative rulings and practice, all as in effect as of the date of this SAI and all of which are subject to change, including changes with retroactive effect. Except as specifically set forth below, the following discussion does not address any state, local or foreign tax matters.

A shareholder’s tax treatment may vary depending upon his or her particular situation. This discussion applies only to shareholders holding Fund shares as capital assets within the meaning of the Code. Except as otherwise noted, it may not apply to certain types of shareholders who may be subject to special rules, such as insurance companies, tax-exempt organizations, shareholders holding Fund shares through tax-advantaged accounts (such as 401(k) Plan Accounts or Individual Retirement Accounts), financial institutions, broker-dealers, entities that are not organized under the laws of the United States or a political subdivision thereof, persons who are neither citizens nor residents of the United States, shareholders holding Fund shares as part of a hedge, straddle, or conversion transaction, and shareholders who are subject to the U.S. federal alternative minimum tax.

The Trust has not requested and will not request an advance ruling from the IRS as to the U.S. federal income tax matters described below. The IRS could adopt positions contrary to those discussed below and such positions could be sustained. In addition, the following discussion and the discussions in the prospectuses applicable to each shareholder address only some of the U.S. federal income tax considerations generally affecting investments in the Funds. Prospective shareholders are urged to consult with their own tax advisors and financial planners regarding the U.S. federal tax consequences of an investment in a Fund, the application of state, local, or foreign laws, and the effect of any possible changes in applicable tax laws on their investment in the Funds.

Qualification as a Regulated Investment Company

It is intended that each Fund qualify as a “regulated investment company” under Subchapter M of Subtitle A, Chapter 1 of the Code. Each Fund will be treated as a separate entity for U.S. federal income tax purposes. Thus, the provisions of the Code applicable to regulated investment companies generally will apply separately to each Fund, even though each Fund is a series of the Trust. Furthermore, each Fund will separately determine its income, gains, losses, and expenses for U.S. federal income tax purposes.

In order to qualify for the special tax treatment accorded regulated investment companies and their shareholders, each Fund must, among other things, derive at least 90% of its gross income each taxable year generally from (i) dividends, interest, certain payments with respect to securities loans, gains from the sale or other disposition of stock, securities or foreign currencies, or other income attributable to its business of investing in such stock, securities or foreign currencies (including, but not limited to, gains from options, futures or forward contracts) and (ii) net income derived from an interest in a qualified publicly traded partnership, as defined below. In general, for purposes of this 90% gross income requirement, income derived from a partnership (other than a qualified publicly traded partnership) will be treated as qualifying income only to the extent such income is attributable to items of income of the partnership which would be qualifying income if realized directly by the regulated investment company. However, 100% of the net income derived from an interest in a qualified publicly traded partnership (defined as a partnership (x) the interests in which are traded on an established securities market or readily tradable on a secondary market or the substantial equivalent thereof, (y) that derives at least 90% of its income from the passive income sources defined in Code Section 7704(d), and (z) that derives less than 90% of its income from the qualifying income described in clause (i) above) will be treated as qualifying income. Certain of a Fund’s investments in master limited partnerships (MLPs) may qualify

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as interests in qualified publicly traded partnerships. In addition, although in general the passive loss rules do not apply to a regulated investment company, such rules do apply to a regulated investment company with respect to items attributable to an interest in a qualified publicly traded partnership.

Each Fund must also diversify its holdings so that, at the end of each quarter of the Fund’s taxable year: (i) at least 50% of the fair market value of its total assets consists of (A) cash and cash items (including receivables), U.S. government securities and securities of other regulated investment companies, and (B) securities of any one issuer (other than those described in clause (A)) to the extent such securities do not exceed 5% of the value of the Fund’s total assets and are not more than 10% of the outstanding voting securities of such issuer, and (ii) not more than 25% of the value of the Fund’s total assets consists of the securities of any one issuer (other than those described in clause (i)(A)), the securities (other than the securities of other regulated investment companies) of two or more issuers the Fund controls and which are engaged in the same, similar, or related trades or businesses, or the securities of one or more qualified publicly traded partnerships. In addition, for purposes of meeting this diversification requirement, the term “outstanding voting securities of such issuer” includes the equity securities of a qualified publicly traded partnership and in the case of a Fund’s investments in loan participations, the Fund shall treat both the financial intermediary and the issuer of the underlying loan as an issuer. The qualifying income and diversification requirements described above may limit the extent to which a Fund can engage in certain derivative transactions, as well as the extent to which it can invest in MLPs.

In addition, each Fund generally must distribute to its shareholders at least 90% of its investment company taxable income for the taxable year, which generally includes its ordinary income and the excess of any net short-term capital gain over net long-term capital loss, and at least 90% of its net tax-exempt interest income (if any) for the taxable year.

If a Fund qualifies as a regulated investment company that is accorded special tax treatment, it generally will not be subject to U.S. federal income tax on any of the investment company taxable income and net capital gain (i.e., the excess of net long-term capital gain over net short-term capital loss) it distributes to its shareholders (including Capital Gain Dividends, as defined below). Each Fund generally intends to distribute at least annually substantially all of its investment company taxable income (computed without regard to the dividends-paid deduction) and substantially all of its net capital gain. However, no assurance can be given that a Fund will not be subject to U.S. federal income taxation. Any investment company taxable income retained by the Fund will be subject to tax at regular corporate rates.

In addition, although each Fund generally intends to distribute all of its net capital gain, a Fund may determine to retain for investment all or a portion of its net capital gain. If a Fund retains any net capital gain, it will be subject to a tax at regular corporate rates on the amount retained, but may designate the retained amount as undistributed capital gains in a notice to its shareholders, who (i) will be required to include in income for U.S. federal income tax purposes, as long-term capital gain, their shares of such undistributed amount, and (ii) will be entitled to credit their proportionate shares of the tax paid by the Fund on such undistributed amount against their U.S. federal income tax liabilities, if any, and to claim refunds to the extent the credit exceeds such liabilities. For U.S. federal income tax purposes, the tax basis of shares owned by a shareholder of a Fund will be increased by an amount equal under current law to the difference between the amount of undistributed capital gains included in the shareholder’s gross income under clause (i) of the preceding sentence and the tax deemed paid by the shareholder under clause (ii) of the preceding sentence.

In determining its net capital gain for Capital Gain Dividend purposes, a regulated investment company generally must treat any net capital loss or any net long-term capital loss incurred after October 31 as if it had been incurred in the succeeding year. Treasury Regulations generally permit a regulated investment company, in determining its taxable income, to elect to treat all or part of any net capital loss, any net long-term capital loss or any foreign currency loss incurred after October 31 as if it had been incurred in the succeeding year.

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In order to comply with the distribution requirements described above applicable to regulated investment companies, a Fund generally must make the distributions in the same taxable year that it realizes the income and gain, although in certain circumstances, a Fund may make the distributions in the following taxable year in respect of income and gains from the prior taxable year. Shareholders generally are taxed on any distributions from a Fund in the year they are actually distributed. If a Fund declares a distribution to shareholders of record in October, November or December of one calendar year and pays the distribution by January 31 of the following calendar year, however, the Fund and its shareholders will be treated as if the Fund paid the distribution by December 31 of the earlier year.

If, for any taxable year, a Fund fails to qualify as a regulated investment company accorded special tax treatment under the Code, it will be taxed in the same manner as an ordinary corporation without any deduction for its distributions to shareholders, and all distributions from the Fund’s current and accumulated earnings and profits (including any distributions of its net tax-exempt income and net long-term capital gains) to its shareholders will be taxable to shareholders as dividend income. In addition, the Fund could be required to recognize unrealized gains, pay substantial taxes and interest and make substantial distributions before requalifying as a regulated investment company.

Excise Tax

If a Fund fails to distribute by December 31 of each calendar year at least the sum of 98% of its ordinary income for that year (excluding capital gains and losses) and 98% of its capital gain net income (adjusted for net ordinary losses) for the 1-year period ending on October 31 of that year, and any of its ordinary income and capital gain net income from previous years that were not distributed during such years, the Fund will be subject to a nondeductible 4% excise tax on the undistributed amounts. For these purposes, a Fund will be treated as having distributed any amount on which it has been subject to corporate income tax in the taxable year ending within the calendar year. Each Fund generally intends to actually distribute or be deemed to have distributed substantially all of its ordinary income and capital gain net income, if any, by the end of each calendar year and, thus, expects not to be subject to the excise tax. However, no assurance can be given that a Fund will not be subject to the excise tax. Moreover, each Fund reserves the right to pay an excise tax rather than make an additional distribution when circumstances warrant (for example, if the amount of excise tax to be paid is deemed de minimis by a Fund).

Capital Loss Carryforwards

Subject to certain limitations, a Fund is permitted to carry forward a net capital loss from any year to offset its capital gains, if any, realized during the eight years following the year of the loss. A Fund’s capital loss carryforward is treated as a short-term capital loss in the year to which it is carried. If future capital gains are offset by carried forward capital losses, such future capital gains are not subject to fund-level U.S. federal income taxation, regardless of whether they are distributed to shareholders. Accordingly, the Funds do not expect to distribute any such offsetting capital gains. The Funds cannot carry back or carry forward any net operating losses.

Equalization Accounting

Each Fund may use the so-called “equalization method” of accounting to allocate a portion of its “accumulated earnings and profits,” which generally equals a Fund’s undistributed net investment income and realized capital gains, with certain adjustments, to redemption proceeds. This method permits a Fund to achieve more balanced distributions for both continuing and redeeming shareholders. Although using this method generally will not affect a Fund’s total returns, it may reduce the amount of income and gains that the Fund would otherwise distribute to continuing shareholders by reducing the effect of redemptions of Fund shares on Fund distributions to shareholders. The IRS has not sanctioned the particular equalization method used by the Funds, and thus a Fund’s use of this method may be subject to IRS scrutiny.

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Taxation of Fund Investments

In general, realized gains or losses on the sale of securities held by a Fund will be treated as capital gains or losses, and long-term capital gains or losses if the Fund has held or is deemed to have held the securities for more than one year at the time of disposition.

If a Fund purchases a debt obligation with original issue discount (OID) (generally a debt obligation with an issue price less than its stated principal amount, such as a zero-coupon bond), the Fund may be required to annually include in its income a portion of the OID as ordinary income, even though the Fund will not receive cash payments for such discount until maturity or disposition of the obligation. Inflation-protected bonds generally can be expected to produce OID income as their principal amounts are adjusted upward for inflation. In general, gains recognized on the disposition of (or the receipt of any partial payment of principal on) a debt obligation (including a municipal obligation) purchased by a Fund at a market discount, generally at a price less than its principal amount, will be treated as ordinary income to the extent of the portion of market discount which accrued, but was not previously recognized pursuant to an available election, during the term that the Fund held the debt obligation. A Fund generally will be required to make distributions to shareholders representing the OID or market discount (if an election is made by the Fund to accrue market discount over the holding period of the applicable debt obligation) on debt securities that is currently includible in income, even though the cash representing such income may not have been received by the Fund. Cash to pay such distributions may be obtained from borrowing or from sales proceeds of securities held by a Fund which the Fund otherwise might have continued to hold; obtaining such cash might be disadvantageous for the Fund.

In addition, payment-in-kind securities similarly will give rise to income which is required to be distributed and is taxable even though a Fund receives no cash interest payment on the security during the year. A portion of the interest paid or accrued on certain high-yield discount obligations (such as high-yield corporate debt securities) may not (and interest paid on debt obligations owned by a Fund that are considered for tax purposes to be payable in the equity of the issuer or a related party will not) be deductible to the issuer, possibly affecting the cash flow of the issuer.

If a Fund invests in debt obligations that are in the lowest rating categories or are unrated, including debt obligations of issuers not currently paying interest or who are in default, special tax issues may exist for the Fund. Tax rules are not entirely clear about issues such as whether a Fund should recognize market discount on a debt obligation and, if so, the amount of market discount the Fund should recognize, when a Fund may cease to accrue interest, OID or market discount, when and to what extent deductions may be taken for bad debts or worthless securities and how payments received on obligations in default should be allocated between principal and income. These and other related issues will be addressed by a Fund when, as and if it invests in such securities, to ensure that it distributes sufficient income to preserve its status as a regulated investment company and does not become subject to U.S. federal income or excise tax.

If an option granted by a Fund is sold, lapses or is otherwise terminated through a closing transaction, such as a repurchase by the Fund of the option from its holder, the Fund generally will realize a short-term capital gain or loss, depending on whether the premium income is greater or less than the amount paid by the Fund in the closing transaction. Some capital losses realized by a Fund in the sale, exchange, exercise or other disposition of an option may be deferred if they result from a position that is part of a “straddle,” discussed below. If securities are sold by a Fund pursuant to the exercise of a covered call option granted by it, the Fund generally will add the premium received to the sale price of the securities delivered in determining the amount of gain or loss on the sale. If securities are purchased by a Fund pursuant to the exercise of a put option written by it, the Fund generally will subtract the premium received from its cost basis in the securities purchased.

Some regulated futures contracts, foreign currency contracts, and non-equity, listed options that may be used by a Fund will be deemed “Section 1256 contracts.” A Fund will be required to “mark to market” any such contracts held at the end of the taxable year by treating them as if they had been sold on the last day of that year

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at market value. Sixty percent of any net gain or loss realized on all dispositions of Section 1256 contracts, including deemed dispositions under the “mark-to-market” rule, generally will be treated as long-term capital gain or loss, and the remaining 40% will be treated as short-term capital gain or loss, although certain foreign currency gains and losses from such contracts may be treated as ordinary income or loss as described below. These provisions may require a Fund to recognize income or gains without a concurrent receipt of cash. Transactions that qualify as designated hedges are exempt from the mark-to-market rule and the “60%/40%” rule and may require the Fund to defer the recognition of losses on certain futures contracts, foreign currency contracts, and non-equity options.

Foreign exchange gains and losses realized by a Fund in connection with certain transactions involving foreign currency-denominated debt securities, certain options, futures contracts, forward contracts and similar instruments relating to foreign currency, foreign currencies, or payables or receivables denominated in a foreign currency are subject to Section 988 of the Code, which generally causes such gains and losses to be treated as ordinary income or loss and may affect the amount and timing of recognition of the Fund’s income. Under future Treasury Regulations, any such transactions that are not directly related to a Fund’s investments in stock or securities (or its options contracts or futures contracts with respect to stock or securities) may have to be limited in order to enable the Fund to satisfy the 90% qualifying income test described above. If the net foreign exchange loss exceeds a Fund’s net investment company taxable income (computed without regard to such loss) for a taxable year, the resulting ordinary loss for such year will not be available as a carryforward and thus cannot be deducted by the Fund or its shareholders in future years.

Offsetting positions held by a Fund involving certain derivative instruments, such as forward, futures and options contracts, may be considered, for U.S. federal income tax purposes, to constitute “straddles.” “Straddles” are defined to include “offsetting positions” in actively traded personal property. The tax treatment of “straddles” is governed by Section 1092 of the Code which, in certain circumstances, overrides or modifies the provisions of Section 1256. If a Fund is treated as entering into a “straddle” and at least one (but not all) of the Fund’s positions in derivative contracts comprising a part of such straddle is governed by Section 1256 of the Code, described above, then such straddle could be characterized as a “mixed straddle.” A Fund may make one or more elections with respect to “mixed straddles.” Depending upon which election is made, if any, the results with respect to a Fund may differ. Generally, to the extent the straddle rules apply to positions established by a Fund, losses realized by the Fund may be deferred to the extent of unrealized gain in any offsetting positions. Moreover, as a result of the straddle rules, short-term capital loss on straddle positions may be recharacterized as long-term capital loss, and long-term capital gain may be characterized as short-term capital gain. In addition, the existence of a straddle may affect the holding period of the offsetting positions. As a result, the straddle rules could cause distributions that would otherwise constitute “qualified dividend income” or qualify for the dividends-received deduction to fail to satisfy the applicable holding period requirements (as described below). Furthermore, the Fund may be required to capitalize, rather than deduct currently, any interest expense and carrying charges applicable to a position that is part of a straddle, including any interest on indebtedness incurred or continued to purchase or carry any positions that are part of a straddle. The application of the straddle rules to certain offsetting Fund positions can therefore affect the amount, timing, and character of distributions to shareholders, and may result in significant differences from the amount, timing and character of distributions that would have been made by the Fund if it had not entered into offsetting positions in respect of certain of its portfolio securities.

If a Fund enters into a “constructive sale” of any appreciated financial position in stock, a partnership interest, or certain debt instruments, the Fund will be treated as if it had sold and immediately repurchased the property and must recognize gain (but not loss) with respect to that position. A constructive sale of an appreciated financial position occurs when a Fund enters into certain offsetting transactions with respect to the same or substantially identical property, including, but not limited to: (i) a short sale; (ii) an offsetting notional principal contract; (iii) a futures or forward contract; or (iv) other transactions identified in future Treasury Regulations. The character of the gain from constructive sales will depend upon a Fund’s holding period in the appreciated financial position. Losses realized from a sale of a position that was previously the subject of a

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constructive sale will be recognized when the position is subsequently disposed of. The character of such losses will depend upon a Fund’s holding period in the position beginning with the date the constructive sale was deemed to have occurred and the application of various loss deferral provisions in the Code. Constructive sale treatment does not apply to certain closed transactions, including if such a transaction is closed on or before the 30th day after the close of the Fund’s taxable year and the Fund holds the appreciated financial position unhedged throughout the 60-day period beginning with the day such transaction was closed.

The amount of long-term capital gain a Fund may recognize from certain derivative transactions with respect to interests in certain pass-through entities is limited under the Code’s constructive ownership rules. The amount of long-term capital gain is limited to the amount of such gain the Fund would have had if the Fund directly invested in the pass-through entity during the term of the derivative contract. Any gain in excess of this amount is treated as ordinary income. An interest charge is imposed on the amount of gain that is treated as ordinary income.

If the Fund makes a distribution of income received by the Fund in lieu of dividends (a “substitute payment”) with respect to securities on loan pursuant to a securities lending transaction, such income will not constitute qualified dividend income to individual shareholders and will not be eligible for the dividends-received deduction for corporate shareholders. Similar consequences may apply to repurchase and other derivative transactions. Similarly, to the extent that Columbia Short Term Municipal Bond Fund makes distributions of income received by such Fund in lieu of tax-exempt interest with respect to securities on loan, such distributions will not constitute exempt-interest dividends (defined below) to shareholders.

In addition, a Fund’s transactions in securities and certain types of derivatives (e.g., options, futures contracts, forward contracts and swap agreements) may be subject to other special tax rules, such as the wash-sale rules or the short-sale rules, the effect of which may be to accelerate income to the Fund, defer losses to the Fund, cause adjustments in the holding periods of the Fund’s securities, convert long-term capital gains into short-term capital gains, and/or convert short-term capital losses into long-term capital losses. These rules could therefore affect the amount, timing and character of distributions to shareholders.

Certain of a Fund’s investments in derivative instruments and foreign currency-denominated instruments, as well as any of its foreign currency transactions and hedging activities, are likely to produce a difference between its book income and its taxable income. If a Fund’s book income exceeds the sum of its taxable income and net tax-exempt income (if any), the distribution (if any) of such excess generally will be treated as (i) a dividend to the extent of the Fund’s remaining earnings and profits (including earnings and profits arising from tax-exempt income), (ii) thereafter, as a return of capital to the extent of the recipient’s basis in its shares, and (iii) thereafter, as gain from the sale or exchange of a capital asset. If a Fund’s book income is less than the sum of its taxable income and net tax-exempt income (if any), the Fund could be required to make distributions exceeding book income to qualify as a regulated investment company that is accorded special tax treatment.

Rules governing the U.S. federal income tax aspects of derivatives, including swap agreements, are in a developing stage and are not entirely clear in certain respects. Accordingly, while each Fund intends to account for such transactions in a manner it deems to be appropriate, an adverse determination or future guidance by the IRS with respect to these rules (which determination or guidance could be retroactive) may affect whether a Fund has made sufficient distributions, and otherwise satisfied the relevant requirements to maintain its qualification as a regulated investment company and avoid fund-level tax. Certain requirements that must be met under the Code in order for a Fund to qualify as a regulated investment company may limit the extent to which a Fund will be able to engage in certain derivatives transactions.

Any investment by a Fund in REIT equity securities may result in the Fund’s receipt of cash in excess of the REIT’s earnings; if the Fund distributes these amounts, these distributions could constitute a return of capital to Fund shareholders for U.S. federal income tax purposes. Investments in REIT equity securities also may require a Fund to accrue and distribute income not yet received. To generate sufficient cash to make the requisite

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distributions, the Fund may be required to sell securities in its portfolio (including when it is not advantageous to do so) that it otherwise would have continued to hold. Dividends received by the Fund from a REIT generally will not constitute qualified dividend income and will not qualify for the dividends-received deduction.

A Fund may invest directly or indirectly in residual interests in REMICs or equity interests in taxable mortgage pools (TMPs). Under an IRS notice, and Treasury Regulations that have yet to be issued but may apply retroactively, a portion of a Fund’s income (including income allocated to the Fund from a REIT or other pass-through entity) that is attributable to a residual interest in a REMIC or an equity interest in a TMP (referred to in the Code as an “excess inclusion”) will be subject to U.S. federal income tax in all events. This notice also provides, and the regulations are expected to provide, that excess inclusion income of a regulated investment company, such as a Fund, will be allocated to shareholders of the regulated investment company in proportion to the dividends received by such shareholders, with the same consequences as if the shareholders held the related interest directly. As a result, the Fund may not be a suitable investment for certain tax-exempt shareholders, as noted under Tax-Exempt Shareholders below.

In general, excess inclusion income allocated to shareholders (i) cannot be offset by net operating losses (subject to a limited exception for certain thrift institutions), (ii) will constitute unrelated business taxable income (UBTI) to entities (including a qualified pension plan, an individual retirement account, a 401(k) plan, a Keogh plan or certain other tax-exempt entities) subject to tax on UBTI, thereby potentially requiring such an entity that is allocated excess inclusion income, and otherwise might not be required to file a tax return, to file a tax return and pay tax on such income, and (iii) in the case of a foreign shareholder, will not qualify for any reduction in U.S. federal withholding tax.

Some amounts received by a Fund from its investments in MLPs will likely be treated as returns of capital because of accelerated deductions available with respect to the activities of MLPs. On the disposition of an investment in such an MLP, the Fund will likely realize taxable income in excess of economic gain from that asset (or if a Fund does not dispose of the MLP, the Fund will likely realize taxable income in excess of cash flow received by the Fund from the MLP in a later period), and the Fund must take such income into account in determining whether the Fund has satisfied its regulated investment company distribution requirements. The Fund may have to borrow or liquidate securities to satisfy its distribution requirements and meet its redemption requests, even though investment considerations might otherwise make it undesirable for the Fund to borrow money or sell securities at the time. In addition, distributions attributable to gain from the sale of MLPs that are characterized as ordinary income under the Code’s recapture provisions will be taxable to Fund shareholders as ordinary income.

“Passive foreign investment companies” (PFICs) are generally defined as foreign corporations where at least 75% of their gross income for their taxable year is income from passive sources (such as interest, dividends, certain rents and royalties, or certain capital gains) or at least 50% of their assets on average produce such passive income. If a Fund acquires any equity interest in a PFIC, the Fund could be subject to U.S. federal income tax and interest charges on “excess distributions” received from the PFIC or on gain from the sale of such equity interest in the PFIC, even if all income or gain actually received by the Fund is timely distributed to its shareholders. Excess distributions and gain from the sale of interests in PFICs may be characterized as ordinary income even though, absent the application of PFIC rules, these amounts may otherwise have been classified as capital gain.

A Fund will not be permitted to pass through to its shareholders any credit or deduction for these special taxes and interest charges incurred with respect to a PFIC. Elections may be available that would ameliorate these adverse tax consequences, but such elections would require a Fund to include its share of the PFIC’s income and net capital gains annually, regardless of whether it receives any distribution from the PFIC (in the case of a “QEF election”), or to mark the gains (and to a limited extent losses) in its interests in the PFIC “to the market” as though the Fund had sold and repurchased such interests on the last day of the Fund’s taxable year, treating such gains and losses as ordinary income and loss (in the case of a “mark-to-market election”). The QEF

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and mark-to-market elections may require a Fund to recognize taxable income or gain without the concurrent receipt of cash and increase the amount required to be distributed by the Fund to avoid taxation. Making either of these elections therefore may require a Fund to liquidate other investments prematurely to meet the minimum distribution requirements described above, which also may accelerate the recognition of gain and adversely affect the Funds total return. Each Fund may attempt to limit and/or manage its holdings in PFICs to minimize tax liability and/or maximize returns from these investments but there can be no assurance that it will be able to do so. Moreover, because it is not always possible to identify a foreign corporation as a PFIC in advance of acquiring shares in the corporation, a Fund may incur the tax and interest charges described above in some instances. Dividends paid by PFICs will not be eligible to be treated as qualified dividend income, as defined below.

In addition to the investments described above, prospective shareholders should be aware that other investments made by a Fund may involve complex tax rules that may result in income or gain recognition by the Fund without corresponding current cash receipts. Although each Fund seeks to avoid significant noncash income, such noncash income could be recognized by a Fund, in which case the Fund may distribute cash derived from other sources in order to meet the minimum distribution requirements described above. In this regard, a Fund could be required at times to liquidate investments prematurely in order to satisfy its minimum distribution requirements, which may accelerate the recognition of gain and adversely affect the Fund’s total return.

Taxation of Distributions

Except for exempt-interest dividends (defined below) paid by Columbia Short Term Municipal Bond Fund, distributions paid out of a Fund’s current and accumulated earnings and profits, whether paid in cash or reinvested in the Fund, generally are deemed to be taxable distributions and must be reported by each shareholder who is required to file a U.S. federal income tax return. Dividends and distributions on a Fund’s shares are generally subject to U.S. federal income tax as described herein to the extent they do not exceed the Fund’s realized income and gains, even though such dividends and distributions may economically represent a return of a particular shareholder’s investment. Such distributions are likely to occur in respect of shares purchased at a time when the Fund’s net asset value reflects either unrealized gains, or realized but undistributed income or gains. Such realized income and gains may be required to be distributed even when the Fund’s net asset value also reflects unrealized losses. For U.S. federal income tax purposes, a Fund’s earnings and profits, described above, are determined at the end of the Fund’s taxable year and are allocated pro rata to distributions paid over the entire year. Distributions in excess of a Fund’s current and accumulated earnings and profits will first be treated as a return of capital up to the amount of a shareholder’s tax basis in his or her Fund shares and then as capital gain. A return of capital is not taxable, but it reduces a shareholder’s tax basis in his or her Fund shares, thus reducing any loss or increasing any gain on a subsequent taxable disposition by the shareholder of his or her shares. A Fund may make distributions in excess of its earnings and profits to a limited extent, from time to time.

For U.S. federal income tax purposes, distributions of investment income (except for exempt-interest dividends, defined below) are generally taxable as ordinary income, and distributions of gains from the sale of investments that a Fund owned (or is deemed to have owned) for one year or less will be taxable as ordinary income. Distributions properly designated by a Fund as capital gain dividends (Capital Gain Dividends) will be taxable to shareholders as long-term capital gain (to the extent such distributions do not exceed the Fund’s actual net long-term capital gain for the taxable year), regardless of how long a shareholder has held Fund shares, and do not qualify as dividends for purposes of the dividends-received deduction or as qualified dividend income (defined below). Each Fund will designate Capital Gain Dividends, if any, in a written notice mailed by the Fund to its shareholders not later than 60 days after the close of the Fund’s taxable year.

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repurchase agreements collateralized by U.S. government securities generally do not qualify for tax-free treatment. This exemption may not apply to corporate shareholders.

Sales and Exchanges of Fund Shares

If a shareholder sells or exchanges his or her Fund shares, he or she generally will realize a taxable capital gain or loss on the difference between the amount received for the shares (or deemed received in the case of an exchange) and his or her tax basis in the shares. This gain or loss will be long-term capital gain or loss if he or she has held (or is deemed to have held) such Fund shares for more than one year at the time of the sale or exchange, and short-term capital gain or loss otherwise.

If a shareholder sells or exchanges Fund shares within 90 days of having acquired such shares and if, as a result of having initially acquired those shares, he or she subsequently pays a reduced sales charge on a new purchase of shares of the Fund or a different regulated investment company, the sales charge previously incurred in acquiring the Fund’s shares generally shall not be taken into account (to the extent the previous sales charges do not exceed the reduction in sales charges on the new purchase) for the purpose of determining the amount of gain or loss on the disposition, but generally will be treated as having been incurred in the new purchase. Also, if a shareholder realizes a loss on a disposition of Fund shares, the loss will be disallowed under “wash sale” rules to the extent that he or she purchases substantially identical shares within the 61-day period beginning 30 days before and ending 30 days after the disposition. Any disallowed loss generally will be reflected in an adjustment to the tax basis of the purchased shares.

If a shareholder receives a Capital Gain Dividend or is deemed to receive a distribution of long-term capital gain with respect to any Fund share and such Fund share is held or treated as held for six months or less, then (unless otherwise disallowed) any loss on the sale or exchange of that Fund share will be treated as a long-term capital loss to the extent of the Capital Gain Dividend or deemed long-term capital gain distribution. If shares of Columbia Short Term Municipal Bond Fund are sold at a loss after being held for six months or less, the loss will be disallowed to the extent of any exempt-interest dividends (defined below) received on those shares.

Foreign Taxes

Amounts realized by a Fund from sources within foreign countries may be subject to withholding and other taxes imposed by such countries. Tax conventions between certain countries and the United States may reduce or eliminate such taxes. If more than 50% of the value of a Fund’s total assets at the close of its taxable year consists of securities of foreign corporations, the Fund will be eligible to file an annual election with the IRS pursuant to which the Fund may pass through to its shareholders on a pro rata basis foreign income and similar taxes paid by the Fund with respect to foreign securities that the Fund has held for at least the minimum holding periods specified in the Code and such taxes may be claimed, subject to certain limitations, either as a tax credit or deduction by the shareholders. It is not expected that any of the Funds will qualify for this election.

U.S. Federal Income Tax Rates

As of the date of this SAI, the maximum stated U.S. federal income tax rate applicable to individuals generally is 35% for ordinary income and 15% for net long-term capital gain. Long-term capital gain rates applicable to individuals have been temporarily reduced—in general, to 15% with lower rates applying to taxpayers in the 10% and 15% rate brackets—for taxable years beginning before January 1, 2011. It is currently unclear whether Congress will extend this provision for tax years beginning on or after January 1, 2011.

For taxable years beginning before January 1, 2011, U.S. federal income tax law also provides for a maximum individual U.S. federal income tax rate applicable to “qualified dividend income” equal to the highest net long-term capital gain rate, which, as described above, generally is 15%. It is currently unclear whether Congress will extend this provision for tax years beginning on or after January 1, 2011. In general, “qualified

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dividend income” is income attributable to dividends received by a Fund from certain domestic and foreign corporations, as long as certain holding period and other requirements are met by the Fund with respect to the dividend-paying corporation’s stock and by the shareholders with respect to the Fund’s shares. If 95% or more of a Fund’s gross income (excluding net long-term capital gain over net short-term capital loss) constitutes qualified dividend income, all of its distributions (other than Capital Gain Dividends) will be generally treated as qualified dividend income in the hands of individual shareholders, as long as they have owned their Fund shares for at least 61 days during the 121-day period beginning 60 days before the Fund’s ex-dividend date (or, in the case of certain preferred stock, 91 days during the 181-day period beginning 90 days before such date) and meet certain other requirements specified in the Code. In general, if less than 95% of a Fund’s income is attributable to qualified dividend income, then only the portion of the Fund’s distributions that is attributable to qualified dividend income and designated as such in a timely manner will be so treated in the hands of individual shareholders who meet the aforementioned holding period requirements. The rules regarding the qualification of Fund distributions as qualified dividend income are complex, including the holding period requirements. Individual Fund shareholders therefore are urged to consult their own tax advisors and financial planners. Fixed income funds typically do not distribute significant amounts of qualified dividend income.

The maximum stated corporate U.S. federal income tax rate applicable to ordinary income and net capital gain is 35%. Actual marginal tax rates may be higher for some shareholders, for example, through reductions in deductions. Naturally, the amount of tax payable by any taxpayer will be affected by a combination of tax laws covering, for example, deductions, credits, deferrals, exemptions, sources of income and other matters. U.S. federal income tax rates are set to increase in future years under various “sunset” provisions of U.S. federal income tax laws.

Backup Withholding

Each Fund generally is required to withhold, and remit to the U.S. Treasury, subject to certain exemptions, an amount equal to 28% of all distributions and redemption proceeds (including proceeds from exchanges and redemptions in-kind) paid or credited to a Fund shareholder if (1) the shareholder fails to furnish the Fund with a correct “taxpayer identification number” (TIN) or has not certified to the Fund that withholding does not apply or (2) the IRS notifies the Fund that the shareholder’s TIN is incorrect or the shareholder is otherwise subject to backup withholding. These backup withholding rules may also apply to distributions that are properly designated as exempt-interest dividends (defined below). This backup withholding is not an additional tax imposed on the shareholder. The shareholder may apply amounts required to be withheld as a credit against his or her future U.S. federal income tax liability, provided that the required information is furnished to the IRS. If a shareholder fails to furnish a valid TIN upon request, the shareholder can also be subject to IRS penalties. The rate of backup withholding is set to increase for amounts distributed or paid after December 31, 2010.

Tax-Deferred Plans

The shares of a Fund may be available for a variety of tax-deferred retirement and other tax-advantaged plans and accounts. Prospective investors should contact their tax advisors and financial planners regarding the tax consequences to them of holding Fund shares through such plans and/or accounts.

Corporate Shareholders

Subject to limitations and other rules, a corporate shareholder of a Fund may be eligible for the dividends-received deduction on Fund distributions attributable to dividends received by the Fund from domestic corporations, which, if received directly by the corporate shareholder, would qualify for such a deduction. For eligible corporate shareholders, the dividends-received deduction may be subject to certain reductions, and a distribution by a Fund attributable to dividends of a domestic corporation will be eligible for the deduction only if certain holding period and other requirements are met. These requirements are complex; therefore, corporate shareholders of the Funds are urged to consult their own tax advisors and financial planners.

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As discussed above, a portion of the interest paid or accrued on certain high-yield discount obligations that a Fund may own may not be deductible to the issuer. If a portion of the interest paid or accrued on these obligations is not deductible, that portion will be treated as a dividend. In such cases, if the issuer of the obligation is a domestic corporation, dividend payments by a Fund may be eligible for the dividends-received deduction to the extent of the dividend portion of such interest.

Foreign Shareholders

For purposes of this discussion, “foreign shareholders” generally include: (i) nonresident alien individuals, (ii) foreign trusts ( i.e. , a trust other than a trust with respect to which a U.S. court is able to exercise primary supervision over administration of that trust and one or more U.S. persons have authority to control substantial decisions of that trust), (iii) foreign estates ( i.e. , the income of which is not subject to U.S. tax regardless of source), and (iv) foreign corporations.

Generally, unless an exception applies, dividend distributions made to foreign shareholders other than Capital Gain Dividends and exempt-interest dividends (defined below) will be subject to non-refundable U.S. federal income tax withholding at a 30% rate (or such lower rate as may be provided under an applicable income tax treaty) even if they are funded by income or gains (such as portfolio interest, short-term capital gains, or foreign-source dividend and interest income) that, if paid to a foreign person directly, would not be subject to withholding. However, generally, for taxable years beginning before January 1, 2010, (and, for taxable year beginning before January 1, 2010 if pending legislation (discussed below) is enacted) distributions made to foreign shareholders and properly designated by a Fund as “interest-related dividends” are exempt from U.S. federal income tax withholding. The exemption for interest-related dividends does not apply to any distribution to a foreign shareholder (i) to the extent that the dividend is attributable to certain interest on an obligation if the foreign shareholder is the issuer or is a 10% shareholder of the issuer; (ii) that is within certain foreign countries that have inadequate information exchange with the United States, or (iii) to the extent the dividend is attributable to interest paid by a person that is a related person of the foreign shareholder and the foreign shareholder is a controlled foreign corporation. Interest-related dividends are generally attributable to the Fund’s net U.S.-source interest income of types similar to those not subject to U.S. federal income tax if earned directly by an individual foreign shareholder. In order to qualify as an interest-related dividend, the Fund must designate a distribution as such in a written notice mailed to its shareholders not later than 60 days after the close of the Fund’s taxable year. Notwithstanding the foregoing, if a distribution described above is “effectively connected” with a U.S. trade or business (or, if an income tax treaty applies, is attributable to a U.S. permanent establishment) of the recipient foreign shareholder, neither U.S. federal income tax withholding nor the exemption for interest-related dividends will apply. Instead, the distribution will be subject to the tax, reporting and withholding requirements generally applicable to U.S. persons, and an additional branch profits tax may apply if the recipient foreign shareholder is a foreign corporation.

In general, a foreign shareholder’s capital gains realized on the disposition of Fund shares, distributions properly designated as Capital Gain Dividends and, with respect to taxable years of a Fund beginning before January 1, 2010, (and, for taxable year beginning before January 1, 2010 if pending legislation (discussed below) is enacted) “short-term capital gain dividends” (defined below) are not subject to U.S. federal income or withholding tax, unless: (i) such gains or distributions are effectively connected with a U.S. trade or business (or, if an income tax treaty applies, are attributable to a U.S. permanent establishment) of the foreign shareholder; (ii) in the case of an individual foreign shareholder, the shareholder is present in the U.S. for a period or periods aggregating 183 days or more during the year of the disposition of Fund shares or the receipt of Capital Gain Dividends or short-term capital gain dividends and certain other conditions are met; or (iii) the Fund shares on which the foreign shareholder realized gain constitute U.S. real property interests (USRPIs, defined below) or, in certain cases, the distributions are attributable to gain from the sale or exchange of a USRPI, as discussed below. If the requirements of clause (i) are met, the tax, reporting and withholding requirements applicable to U.S. persons generally will apply to the foreign shareholder and an additional branch profits tax may apply if the foreign shareholder is a foreign corporation. If the requirements of clause (i) are not met, but the requirements of

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clause (ii) are met, such gains and distributions will be subject to U.S. federal income tax at a 30% rate (or such lower rate as may be provided under an applicable income tax treaty). Please see below for a discussion of the tax implications to foreign shareholders in the event that clause (iii) applies. “Short-term capital gain dividends” are distributions attributable to a Fund’s net short-term capital gain in excess of its net long-term capital loss and designated as such by the Fund in a written notice mailed by the Fund to its shareholders not later than 60 days after the close of the Fund’s taxable year.

Pending legislation proposes to extend the exemptions from withholding for interest-related dividends and short-term capital gain dividends for one additional year (i.e., for dividends with respect to taxable years beginning on or after January 1, 2010 but before January 1, 2011). However, as of the date of this SAI, it is unclear whether such legislation will be enacted and, if enacted, what the terms of the extension will be.

In the case of shares held through an intermediary, even if a Fund makes a designation with respect to a payment, no assurance can be made that the intermediary will respect such a designation, and an intermediary may withhold even if a Fund makes a designation with respect to a payment. Foreign shareholders should contact their intermediaries regarding the application of these rules to their accounts.

Even if permitted to do so, each Fund provides no assurance that it will designate any distributions as interest-related dividends or short-term capital gain dividends.

Special rules apply to distributions to foreign shareholders from a Fund if it is either a “U.S. real property holding corporation” (USRPHC) or would be a USRPHC but for the operation of certain exceptions from USRPI treatment for interests in domestically controlled REITs or regulated investment companies and not-greater-than-5% interests in publicly traded classes of stock in REITs or regulated investment companies. Additionally, special rules apply to the sale of shares in a Fund if it is a USRPHC. Generally, a USRPHC is a domestic corporation that holds USRPIs – defined generally as any interest in U.S. real property or any equity interest in a USRPHC – the fair market value of which equals or exceeds 50% of the sum of the fair market values of the corporation’s USRPIs, interests in real property located outside the United States and other assets. If a Fund holds (directly or indirectly) significant interests in REITs, it may be a USRPHC.

If a Fund is a USRPHC or would be a USRPHC but for certain of the above-mentioned exceptions, amounts the Fund receives from REITs derived from gains realized from USRPIs generally will retain their character as such in the hands of the Fund’s foreign shareholders. In the hands of a foreign shareholder that holds (or has held in the prior 12 months) more than a 5% interest in any class of the Fund, such amounts generally will be treated as gains “effectively connected” with the conduct of a “U.S. trade or business,” and subject to tax at graduated rates. Moreover, such shareholder generally will be required to file a U.S. income tax return for the year recognized, and the Fund must withhold 35% of the amount of such distribution. Otherwise, in the case of all other foreign shareholders (i.e., those whose interest in any class of the Fund did not exceed 5% at any time during the prior 12 months), such amounts generally will be treated as ordinary income (regardless of any designation by the Fund that such distribution is a short-term capital gain dividend (in the event that certain pending legislation is enacted, as described above) or Capital Gain Dividend), and the Fund must withhold 30% (or a lower applicable treaty rate) of the amount of the distribution paid to such shareholders. If a Fund is subject to the rules of this paragraph, its foreign shareholders may also be subject to “wash sale” rules to prevent the avoidance of the foregoing tax-filing and payment obligations through the sale and repurchase of Fund shares. Prior to January 1, 2010, if a Fund was a USRPHC or would have been a USRPHC but for certain of the above-mentioned exceptions, similar rules generally also applied to any non-REIT USRPI gains recognized by the Fund directly or indirectly through certain lower-tier regulated investment companies. Pending legislation proposes to extend such application for one additional year, i.e., to distributions made on or after January 1, 2010 but before January 1, 2011. However, as of the date of this SAI, it is unclear whether such legislation will be enacted and, if enacted, what the terms of the extension will be.

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the disposition of the USRPI and pay any additional tax due on the gain. Prior to January 1, 2010, such withholding generally was not required with respect to amounts paid in redemption of shares of a Fund if it was a domestically controlled USRPHC, or, in certain limited cases, if the Fund (whether or not domestically controlled) held substantial investments in regulated investment companies that were domestically controlled USRPHCs. Pending legislation proposes to extend this exemption from withholding for one additional year, i.e., for redemptions made on or after January 1, 2010 but before January 1, 2011. However, as of the date of this SAI, it is unclear whether such legislation will be enacted and, if enacted, what the terms of the extension will be. Unless and until such legislation is enacted, beginning on January 1, 2010, withholding is required in respect of amounts paid in redemption of shares of a Fund by a greater-than-5% foreign shareholder if the Fund is a USRPHC, without regard to whether the Fund or any regulated investment company in which it invests is domestically controlled.

In order to qualify for any exemptions from withholding described above or for lower withholding tax rates under income tax treaties, or to establish an exemption from backup withholding, a foreign shareholder must comply with applicable certification requirements relating to its foreign status (including, in general, furnishing an IRS Form W-8BEN or substitute form). Foreign shareholders should consult their tax advisers in this regard.

Special rules (including withholding and reporting requirements) apply to foreign partnerships and those holding Fund shares through foreign partnerships. In addition, additional considerations may apply to foreign trusts and foreign estates. Investors holding Fund shares through foreign entities should consult their tax advisors about their particular situation.

A beneficial holder of shares who is a foreign person may be subject to state and local tax and to the U.S. federal estate tax in addition to the U.S. federal income tax referred to above.

Tax-Exempt Shareholders

Under current law, a Fund serves to “block” (that is, prevent the attribution to shareholders of) UBTI from being realized by tax-exempt shareholders. Notwithstanding this “blocking” effect, a tax-exempt shareholder could realize UBTI by virtue of its investment in a Fund if shares in the Fund constitute debt-financed property in the hands of the tax-exempt shareholder within the meaning of Code Section 514(b).

It is possible that a tax-exempt shareholder will also recognize UBTI if a Fund recognizes excess inclusion income (as described above) derived from direct or indirect investments in residual interests in REMICs or equity interests in TMPs. Furthermore, any investment in residual interests of a CMO that has elected to be treated as a REMIC can create complex tax consequences, especially if the Fund has state or local governments or other tax-exempt organizations as shareholders.

In addition, special tax consequences apply to charitable remainder trusts (CRTs) that invest in regulated investment companies that invest directly or indirectly in residual interests in REMICs or equity interests in TMPs. Under legislation enacted in December 2006, a CRT, as defined in Section 664 of the Code, that realizes UBTI for a taxable year must pay an excise tax annually of an amount equal to such UBTI. Under IRS guidance issued in October 2006, a CRT will not recognize UBTI solely as a result of investing in a Fund to the extent that it recognizes excess inclusion income. Rather, if at any time during any taxable year a CRT (or one of certain other tax-exempt shareholders, such as the United States, a state or political subdivision, or an agency or instrumentality thereof, and certain energy cooperatives) is a record holder of a share in a Fund and the Fund recognizes excess inclusion income, then the Fund will be subject to a tax on that portion of its excess inclusion income for the taxable year that is allocable to such shareholders at the highest U.S. federal corporate income tax rate. The extent to which the IRS guidance remains applicable in light of the December 2006 legislation is unclear. To the extent permitted under the 1940 Act, each Fund may elect to specially allocate any such tax to the applicable CRT, or other shareholder, and thus reduce such shareholder’s distributions for the year by the amount

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of the tax that relates to such shareholder’s interest in the Fund. Each Fund has not yet determined whether such an election will be made. CRTs are urged to consult their tax advisors concerning the consequences of investing in a Fund.

Tax Shelter Reporting Regulations

Under Treasury Regulations, if a shareholder recognizes a loss of $2 million or more for an individual shareholder or $10 million or more for a corporate shareholder, the shareholder must file with the IRS a disclosure statement on Form 8886. Direct shareholders of portfolio securities are in many cases excepted from this reporting requirement, but under current guidance, shareholders of a regulated investment company are not excepted. Future guidance may extend the current exception from this reporting requirement to shareholders of most or all regulated investment companies. The fact that a loss is reportable under these regulations does not affect the legal determination of whether the taxpayer’s treatment of the loss is proper. Shareholders should consult their tax advisors to determine the applicability of these regulations in light of their individual circumstances.

Special Tax Considerations Pertaining to Tax-Exempt Fund

If, at the close of each quarter of a regulated investment companys taxable year, at least 50% of the value of its total assets consists of obligations the interest on which is exempt from U.S. federal income tax under Section 103(a) of the Code, then the regulated investment company may qualify to pay “exempt-interest dividends” and pass through to its shareholders the tax-exempt character of its income from such obligations.” Columbia Short Term Municipal Bond Fund (the “Tax-Exempt Fund”) intends to so qualify and is designed to provide shareholders with a high level of income in the form of exempt-interest dividends, which are generally exempt from U.S. federal income tax.

Distributions of capital gains or income not attributable to interest on the Tax-Exempt Fund’s tax-exempt obligations will not constitute exempt-interest dividends and will be taxable to shareholders as described earlier.

Not later than 60 days after the close of its taxable year, the Tax-Exempt Fund will notify its shareholders of the portion of the distributions for the taxable year which constitutes exempt-interest dividends. In general, if an amount of the Tax-Exempt Funds distribution designated as an exempt-interest dividend exceeds the Tax-Exempt Funds net-exempt interest, the amount so qualifying as tax-exempt will be scaled back ratably to the amount of its net-exempt income. In such a case, each Tax-Exempt Fund shareholder must proportionately reduce the amount of the dividend it treats as tax-exempt, and will generally include the excess income as a taxable dividend to the extent of certain disallowed deductions and thereafter as a return of capital. The deductibility of interest paid or accrued on indebtedness incurred by a shareholder to purchase or carry shares of the Tax-Exempt Fund may be limited. The portion of such interest that is non-deductible generally equals the amount of such interest times the ratio of the Tax-Exempt Fund’s exempt-interest dividends received by the shareholder to all of the Tax-Exempt Funds dividends received by the shareholder (excluding Capital Gain Dividends and any capital gains required to be included in the shareholders long term capital gains in respect of capital gains retained by the Tax-Exempt Fund, as described earlier).

Although exempt-interest dividends are generally exempt from U.S. federal income tax, there may not be a similar exemption under the laws of a particular state or local taxing jurisdiction. Thus, exempt-interest dividends may be subject to state and local taxes. You should consult your tax advisor to discuss the tax consequences of your investment in a Tax-Exempt Fund.

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preference item in determining their U.S. federal AMT, if any. Shareholders will be notified of the tax status of distributions made by the Tax-Exempt Fund. Persons who may be “substantial users” (or “related persons” of substantial users) of facilities financed by private activity bonds should consult their tax advisors before purchasing shares in the Tax-Exempt Fund. In addition, exempt-interest dividends paid by the Tax-Exempt Fund to a corporate shareholder are included in the shareholder’s “adjusted current earnings” as part of its U.S. federal AMT calculation. As of the date of this SAI, individuals are subject to the U.S. federal AMT at a maximum rate of 28% and corporations at a maximum rate of 20%. Shareholders with questions or concerns about the U.S. federal AMT should consult their own tax advisors.

Ordinarily, a Tax-Exempt Fund relies on an opinion from the issuer’s bond counsel that interest on the issuer’s obligation will be exempt from U.S. federal income taxation. However, no assurance can be given that the IRS will not successfully challenge such exemption, which could cause interest on the obligation to be taxable and could jeopardize a Tax-Exempt Fund’s ability to pay exempt-interest dividends. Similar challenges may occur as to state-specific exemptions.

A shareholder who receives Social Security or railroad retirement benefits should consult his or her tax advisor to determine what effect, if any, an investment in a Tax-Exempt Fund may have on the federal taxation of such benefits. Exempt-interest dividends are included in income for purposes of determining the amount of benefits that are taxable.

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CONTROL PERSONS AND PRINCIPAL SHAREHOLDERS

As of June 30, 2010, the name, address and percentage of ownership of each person who may be deemed to be a “principal holder “( i.e. , owns of record or is known by the Trust to own beneficially 5% or more of any class of a Fund’s outstanding shares) is listed below.

Principal Holder Ownership of the Funds


Fund / Share Class		Shareholder Account Registration		Share Balance		Percentage of Class

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As of June 30, 2010, the name, address and percentage of ownership of each person who may be deemed to be a “control person” (as that term is defined in the 1940 Act) of the Funds because it owns greater than 25% of the outstanding shares, either beneficially or by virtue of its fiduciary or trust roles or otherwise, is shown below. A controlling person’s vote could have a more significant effect on matters presented to shareholders for approval than the vote of other Fund shareholders.

Control Person Ownership of the Funds


Fund		Shareholder Account Registration		Share Balance		Percent of Fund

[To Come]

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LEGAL PROCEEDINGS

In June 2004, an action captioned John E. Gallus et al. v. American Express Financial Corp. and American Express Financial Advisors Inc. , was filed in the United States District Court for the District of Arizona. The plaintiffs allege that they are investors in several American Express Company (now known as RiverSource) mutual funds and they purport to bring the action derivatively on behalf of those funds under the 1940 Act. The plaintiffs allege that fees allegedly paid to the defendants by the funds for investment advisory and administrative services are excessive. The plaintiffs seek remedies including restitution and rescission of investment advisory and distribution agreements. The plaintiffs voluntarily agreed to transfer this case to the United States District Court for the District of Minnesota (the District Court). In response to defendants’ motion to dismiss the complaint, the District Court dismissed one of plaintiffs’ four claims and granted plaintiffs limited discovery. Defendants moved for summary judgment in April 2007. Summary judgment was granted in the defendants’ favor on July 9, 2007. The plaintiffs filed a notice of appeal with the Eighth Circuit Court of Appeals (the Eighth Circuit) on August 8, 2007. On April 8, 2009, the Eighth Circuit reversed summary judgment and remanded to the District Court for further proceedings. On August 6, 2009, defendants filed a writ of certiorari with the U.S. Supreme Court (the Supreme Court), asking the Supreme Court to stay the District Court proceedings while the Supreme Court considered and ruled in a case captioned Jones v. Harris Associates , which involved issues of law similar to those presented in the Gallus case. On March 30, 2010, the Supreme Court issued its ruling in Jones v. Harris Associates , and on April 5, 2010, the Supreme Court vacated the Eighth Circuit’s decision in the Gallus case and remanded the case to the Eighth Circuit for further consideration in light of the Supreme Court’s decision in Jones v. Harris Associates .

In December 2005, without admitting or denying the allegations, American Express Financial Corporation (AEFC, which is now known as Ameriprise Financial), entered into settlement agreements with the SEC and Minnesota Department of Commerce (MDOC) related to market timing activities. As a result, AEFC was censured and ordered to cease and desist from committing or causing any violations of certain provisions of the Investment Advisers Act of 1940, the 1940 Act, and various Minnesota laws. AEFC agreed to pay disgorgement of $10 million and civil money penalties of $7 million. AEFC also agreed to retain an independent distribution consultant to assist in developing a plan for distribution of all disgorgement and civil penalties ordered by the SEC in accordance with various undertakings detailed at http://www.sec.gov/litigation/admin/ia-2451.pdf. Ameriprise Financial and its affiliates have cooperated with the SEC and the MDOC in these legal proceedings.

On November 7, 2008, the Adviser acquired J. & W. Seligman & Co., Inc. (Seligman). In late 2003, Seligman conducted an extensive internal review concerning mutual fund trading practices. Seligman’s review, which covered the period 2001-2003, noted one arrangement that permitted frequent trading in certain open-end registered investment companies managed by Seligman (the Seligman Funds); this arrangement was in the process of being closed down by Seligman before September 2003. Seligman identified three other arrangements that permitted frequent trading, all of which had been terminated by September 2002. In January 2004, Seligman, on a voluntary basis, publicly disclosed these four arrangements to its clients and to shareholders of the Seligman Funds. Seligman also provided information concerning mutual fund trading practices to the SEC and the Office of the Attorney General of the State of New York (NYAG).

In September 2006, the NYAG commenced a civil action in New York State Supreme Court against Seligman, Seligman Advisors, Inc. (which is now known as Columbia Management Investment Distributors, Inc.), Seligman Data Corp. and Brian T. Zino (collectively, the Seligman Parties), alleging, in substance, that the Seligman Parties permitted various persons to engage in frequent trading and, as a result, the prospectus disclosure used by the registered investment companies then managed by Seligman was and had been misleading. The NYAG included other related claims and also claimed that the fees charged by Seligman to the Seligman Funds were excessive. On March 13, 2009, without admitting or denying any violations of law or wrongdoing, the Seligman Parties entered into a stipulation of settlement with the NYAG and settled the claims made by the NYAG. Under the terms of the settlement, Seligman paid $11.3 million to four Seligman Funds. This settlement resolved all outstanding matters between the Seligman Parties and the NYAG. In addition to the

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foregoing matter, the New York staff of the SEC indicated in September 2005 that it was considering recommending to the Commissioners of the SEC the instituting of a formal action against Seligman and Seligman Advisors, Inc. relating to frequent trading in the Seligman Funds. Seligman responded to the staff in October 2005 that it believed that any action would be both inappropriate and unnecessary, especially in light of the fact that Seligman had previously resolved the underlying issue with the Independent Directors of the Seligman Funds and made recompense to the affected Seligman Funds. There have been no further developments with the SEC on this matter.

Ameriprise Financial and certain of its affiliates have historically been involved in a number of legal, arbitration and regulatory proceedings, including routine litigation, class actions, and governmental actions, concerning matters arising in connection with the conduct of their business activities. Ameriprise Financial believes that the Funds are not currently the subject of, and that neither Ameriprise Financial nor any of its affiliates are the subject of, any pending legal, arbitration or regulatory proceedings that are likely to have a material adverse effect on the Funds or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Funds. Ameriprise Financial is required to make 10-Q, 10-K and, as necessary, 8-K filings with the SEC on legal and regulatory matters that relate to Ameriprise Financial and its affiliates. Copies of these filings may be obtained by accessing the SEC website at www.sec.gov.

There can be no assurance that these matters, or the adverse publicity associated with them, will not result in increased fund redemptions, reduced sale of fund shares or other adverse consequences to the Funds. Further, although we believe proceedings are not likely to have a material adverse effect on the Funds or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Funds, these proceedings are subject to uncertainties and, as such, we are unable to estimate the possible loss or range of loss that may result. An adverse outcome in one or more of these proceedings could result in adverse judgments, settlements, fines, penalties or other relief that could have a material adverse effect on the consolidated financial condition or results of operations of Ameriprise Financial.

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APPENDIX A — DESCRIPTIONS OF SECURITIES RATINGS

This Appendix summarizes the various descriptions of securities ratings applicable to securities purchased by the Columbia Funds. Please refer to a Fund’s prospectus and statement of additional information to determine whether that Fund may invest in securities that have ratings described in this Appendix.

STANDARD & POOR’S (S&P)

Bonds

The following summarizes the ratings used by S&P for bonds. The ratings AAA, AA, A and BBB denote investment grade securities.

AAA bonds have the highest rating assigned by S&P and are considered to have an extremely strong capacity to pay interest and repay principal.

AA bonds are considered to have a very strong capacity to pay interest and repay principal, and they differ from AAA only in small degree.

A bonds are considered to have a strong capacity to pay interest and repay principal, although they are somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than debt in higher rated categories.

BBB bonds are considered to have an adequate capacity to pay interest and repay principal. Whereas they normally exhibit adequate protection parameters, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity to pay interest and repay principal than for bonds in the A category.

BB, B, CCC, CC and C bonds are considered to have predominantly speculative characteristics with respect to capacity to pay interest and repay principal in accordance with the terms of the obligation. BB indicates the lowest degree of speculation and C the highest degree. While such debt will likely have some quality and protective characteristics, these are outweighed by large uncertainties or large exposures to adverse conditions.

BB bonds are considered to have less near-term vulnerability to default than other speculative issues. However, they face major ongoing uncertainties or exposure to adverse business, financial, or economic conditions which could lead to inadequate capacity to meet timely interest and principal payments. The BB rating category is also used for debt subordinated to senior debt that is assigned an actual or implied BBB – rating.

B bonds are considered to have a greater vulnerability to default but currently have the capacity to meet interest payments and principal repayments. Adverse business, financial, or economic conditions will likely impair capacity or willingness to pay interest and repay principal. The B rating category is also used for debt subordinated to senior debt that is assigned an actual or implied BB or BB – rating.

CCC bonds are considered to have a currently identifiable vulnerability to default, and are dependent upon favorable business, financial, and economic conditions to meet timely payment of interest and repayment of principal. In the event of adverse business, financial, or economic conditions, the bonds are not likely to have the capacity to pay interest and repay principal. The CCC rating category is also used for debt subordinated to senior debt that is assigned an actual or implied B or B – rating.

CC rating typically is applied to debt subordinated to senior debt that is assigned an actual or implied CCC rating.

A-1

C rating typically is applied to debt subordinated to senior debt that is assigned an actual or implied CCC – debt rating. The C rating may be used to cover a situation, for example, where a bankruptcy petition has been filed, but debt service payments are continued.

CI rating is reserved for income bonds on which no interest is being paid.

D bonds are in payment default. The D rating category is used when interest payments or principal payments are not made on the date due even if the applicable grace period has not expired, unless S&P believes that such payments will be made during such grace period. The D rating also will be used upon the filing of a bankruptcy petition if debt service payments are jeopardized.

Plus (+) or minus (-) : The ratings from AA to CCC may be modified by the addition of a plus or minus sign to show relative standing within the major rating categories.

Municipal Notes

SP-1. Notes rated SP-1 are considered to have very strong or strong capacity to pay principal and interest. Those issues determined to possess overwhelming safety characteristics are designated as SP-1+.

SP-2. Notes rated SP-2 are considered to have satisfactory capacity to pay principal and interest.

Notes due in three years or less normally receive a note rating. Notes maturing beyond three years normally receive a bond rating, although the following criteria are used in making that assessment:

Amortization schedule (the larger the final maturity relative to other maturities, the more likely the issue will be rated as a note).

Source of payment (the more dependent the issue is on the market for its refinancing, the more likely it will be rated as a note).

Commercial Paper

A. Issues assigned this highest rating are regarded as having the greatest capacity for timely payment. Issues in this category are further refined with the designations 1, 2, and 3 to indicate the relative degree of safety.

A-1. Issues assigned to this rating are considered to have overwhelming or very strong capacity for timely payment. Those issues determined to possess overwhelming safety characteristics are designed A-1+.

MOODY’S INVESTORS SERVICE, INC. (MOODY’S)

Municipal Bonds

Aaa bonds are considered to be of the best quality. They are considered to have the smallest degree of investment risk and are generally referred to as “gilt edge”. Interest payments are protected by a large or by an exceptionally stable margin and principal is secure. While various protective elements are likely to change, such changes as can be visualized are most unlikely to impair a fundamentally strong position of such issues.

Aa bonds are considered to be of high quality by all standards. Together with Aaa bonds they comprise what are generally known as high-grade bonds. They are rated lower than the best bonds because margins of protection may not be as large in Aaa securities or fluctuation of protective elements may be of greater amplitude or there may be other elements present which make the long-term risks appear somewhat larger than in Aaa securities.

A-2

Those bonds in the Aa through B groups that Moody’s believes possess the strongest investment attributes are designated by the symbols Aa1, A1 or Baa1.

A bonds are considered to possess many favorable investment attributes and are to be considered to be upper-medium-grade obligations. Factors giving security to principal and interest are considered adequate, but elements may be present that suggest a susceptibility to impairment at some time in the future.

Baa bonds are considered to be medium grade obligations: they are neither highly protected nor poorly secured. Interest payments and principal security appear adequate for the present but certain protective elements may be lacking or may be characteristically unreliable over any great period of time. Such bonds lack outstanding investment characteristics and, in fact, have speculative characteristics as well.

Ba bonds are considered to have speculative elements: their future cannot be considered as well secured. Often, the protection of interest and principal payments may be very moderate and thereby not well safeguarded during both good and bad times in the future. Uncertainty of position characterizes bonds in this grade.

B bonds are considered generally to lack characteristics of a desirable investment. Assurance of interest and principal payments or of maintenance of other terms of the contract over any long period of time may be small.

Caa bonds are considered to be of poor standing. Such issues may be in default or there may be present elements of danger with respect to principal or interest.

Ca bonds are considered to represent obligations that are speculative in a high degree. Such issues are often in default or have other marked shortcomings.

C bonds are the lowest rated class of bonds and issues so rated are considered to have extremely poor prospects of ever attaining any real investment standing.

Conditional Ratings . Bonds for which the security depends upon the completion of some act or the fulfillment of some condition are rated conditionally. These are bonds secured by (a) earnings of projects under construction, (b) earnings of projects unseasoned in operating experience, (c) rentals which begin when facilities are completed, or (d) payments to which some other limiting conditions attach. Parenthetical rating denotes probable credit stature upon completion of construction or elimination of basis of condition.

Corporate Bonds

The description of the applicable rating symbols (Aaa, Aa, A, Baa, etc.) and their meanings is identical to that of the Municipal Bond ratings as set forth above, except for the numerical modifiers. Moody’s applies numerical modifiers 1, 2, and 3 in the Aa and A classifications of its corporate bond rating system. The modifier 1 indicates that the security ranks in the higher end of its generic rating category; the modifier 2 indicates a midrange ranking; and the modifier 3 indicates that the issuer ranks in the lower end of its generic rating category.

Municipal Notes

MIG 1. This designation denotes best quality. There is present strong protection by established cash flows, superior liquidity support or demonstrated broad-based access to the market for refinancing.

MIG 2. This designation denotes high quality. Margins of protection are ample although not so large as in the preceding group.

A-3

MIG 3. This designation denotes favorable quality. All security elements are accounted for, but there is lacking the undeniable strength of the preceding grades. Liquidity and cash flow protection may be narrow and market access for refinancing is likely to be less well established.

Commercial Paper

Moody’s employs the following three designations, all judged to be investment grade, to indicate the relative repayment capacity of rated issuers:

Prime-1 Highest Quality

Prime-2 Higher Quality

Prime-3 High Quality

If an issuer represents to Moody’s that its commercial paper obligations are supported by the credit of another entity or entities, Moody’s, in assigning ratings to such issuers, evaluates the financial strength of the indicated affiliated corporations, commercial banks, insurance companies, foreign governments, or other entities, but only as one factor in the total rating assessment.

FITCH, INC. (FITCH)

Long-Term Debt

Investment Grade Bond Ratings

AAA bonds are considered to be investment grade and of the highest credit quality. The obligor has an exceptionally strong ability to pay interest and/or dividends and repay principal, which is unlikely to be affected by reasonably foreseeable events.

AA bonds are considered to be investment grade and of very high credit quality. The obligor’s ability to pay interest and repay principal is very strong, although not quite as strong as bonds rated AAA. Because bonds rated in the AAA and AA categories are not significantly vulnerable to foreseeable future developments, short-term debt of these issuers is generally rated F-1+.

A bonds are considered to be investment grade and of high credit quality. The obligor’s ability to pay interest and repay principal is considered to be strong, but may be more vulnerable to adverse changes in economic conditions and circumstances than debt securities with higher ratings.

BBB bonds are considered to be investment grade and of satisfactory credit quality. The obligor’s ability to pay interest or dividends and repay principal is considered to be adequate. Adverse changes in economic conditions and circumstances, however, are more likely to have adverse impact on these securities and, therefore, impair timely payment. The likelihood that the ratings of these bonds will fall below investment grade is higher than for securities with higher ratings.

Speculative Grade Bond Ratings

BB bonds are considered speculative. The obligor’s ability to pay interest and repay principal may be affected over time by adverse economic changes. However, business and financial alternatives can be identified, which could assist the obligor in satisfying its debt service requirements.

B bonds are considered highly speculative. While securities in this class are currently meeting debt service requirements, the probability of continued timely payment of principal and interest reflects the obligor’s limited margin of safety and the need for reasonable business and economic activity throughout the life of the issue.

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CCC bonds are considered to have certain identifiable characteristics that, if not remedied, may lead to default. The ability to meet obligations requires an advantageous business and economic environment.

CC bonds are considered to be minimally protected. Default in payment of interest and/or principal seems probable over time.

C bonds are in imminent default in payment of interest or principal.

DDD, DD, and D bonds are in default on interest and/or principal payments. Such securities are extremely speculative and should be valued on the basis of their ultimate recovery value in liquidation or reorganization of the obligor. DDD represents the highest potential for recovery on these securities and D represents the lowest potential for recovery.

Plus (+) or minus (-) : Plus or minus signs are used to show relative standing within the major rating categories. Plus and minus signs, however, are not used in the DDD, DD, or D categories.

Short-Term Debt

Fitch’s short-term ratings apply to debt obligations that are payable on demand or have original maturities of up to three years, including commercial paper, certificates of deposit, medium-term notes, and investment notes.

F-1+ obligations have exceptionally strong credit quality and are considered to have the strongest degree of assurance for timely payment.

F-1 obligations are considered to reflect an assurance of timely payment only slightly less in degree than issues rated F-1+.

F-2 obligations are considered to have good credit quality. Securities in this class have a satisfactory degree of assurance for timely payment, but the margin of safety is not as great as for issues assigned F-1+ and F-1 ratings.

F-3 obligations are considered to have characteristics suggesting that the degree of assurance for timely payment is adequate; however, near-term adverse changes could cause these securities to be rated below investment grade.

F-S rating is assigned to obligations that are considered to have a minimal degree of assurance for timely payment and to be vulnerable to near-term adverse changes in financial and economic conditions.

B obligations are considered to have a minimal capacity for timely payment of financial commitments and a susceptibility to the adverse effects of changes in circumstances and economic conditions.

C rating is assigned to obligations that are considered to have a high default risk and whose capacity for meeting financial commitments is solely reliant upon a sustained, favorable business and economic environment.

D obligations are in actual or imminent payment default.

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APPENDIX B — PROXY VOTING POLICIES AND PROCEDURES

COLUMBIA MANAGEMENT INVESTMENT ADVISERS, LLC

PROXY VOTING POLICY FOR LEGACY COLUMBIA MANAGEMENT CLIENTS

EFFECTIVE MAY 1, 2010

Columbia Management Investment Advisers, LLC (CMIA) has adopted the attached Proxy Voting Policy for purposes of voting proxies of securities held in certain client accounts ¹ , with the following changes:

•

References to Columbia Management Advisors, LLC and CMA are deemed to be references to Columbia Management Investment Advisers, LLC; and

•

References to Bank of America Corporation and BAC are deemed to be references to Ameriprise Financial, Inc.

In addition, the text of footnote 1 in the Proxy Voting Policy is hereby deleted and replaced with the following:

Ameriprise Financial, Inc., the corporate parent of Columbia Management Investment Advisers, LLC, and all of its numerous affiliates own, operate and have interests in many lines of business that may create or give rise to the appearance of a conflict of interest between Ameriprise Financial, Inc. or its affiliates and those of clients advised by Columbia Management Investment Advisers, LLC. For example, Ameriprise Financial, Inc. and its affiliates may have interests with respect to issuers of voting securities that could appear to or even actually conflict with Columbia Management Investment Advisers, LLC’s duty, in the proxy voting process, to act in the best economic interest of its clients.

On April 30, 2010, Ameriprise Financial, Inc., the parent company of CMIA, acquired from Bank of America, N.A. a portion of the asset management business of Columbia Management Group, LLC, the parent company of Columbia Management Advisors, LLC (“CMA”). In connection with this transaction, CMIA became the investment adviser of certain client accounts previously advised by CMA. CMIA will apply CMA’s Proxy Voting Policy to certain of these and other client accounts.

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Columbia Management Advisors, LLC (“CMA”) – Proxy Voting Policy

Last Review Date:

April 2010

Applicable Regulatory Authority:

Rule 206(4)-6 under the Investment Advisers Act of 1940

Form N-PX

ERISA Department of Labor Bulletin 08-2

Institutional Shareholder Services, Inc. (SEC No Action Letter dated September 15, 2004)

Explanation/Summary of Regulatory Requirements

An investment adviser that exercises voting authority over clients’ proxies must adopt written policies and procedures that are reasonably designed to ensure that those proxies are voted in the best economic interests of clients. An adviser’s policies and procedures must address how the adviser resolves material conflicts of interest between its interests and those of its clients. An investment adviser must comply with certain record keeping and disclosure requirements with respect to its proxy voting responsibilities. In addition, an investment adviser to Employee Retirement Income Security Act (“ERISA”) accounts has an affirmative obligation to vote proxies for an ERISA account, unless the client expressly retains proxy voting authority.

Policy Summary

Columbia Management Advisors, LLC (“CMA”) has adopted and implemented the following policy, which it believes is reasonably designed to: (1) ensure that proxies are voted in the best economic interest of clients; and (2) address material conflicts of interest that may arise. This policy applies primarily to the Global Wealth and Investment Management (“GWIM”) Investment Operations Group, the Investment groups (particularly, Equity and Chief Investment Officer’s Office), as well as to Compliance Risk Management (“CRM”) and Legal. CRM and Business groups to which this policy directly applies must adopt written procedures to implement this Policy.

Policy

All proxies regarding client securities for which CMA has authority to vote will, unless CMA determines in accordance with policies stated below to refrain from voting, be voted in a manner considered by CMA to be in the best interest of CMA’s clients without regard to any resulting benefit or detriment to CMA, its associates, or its affiliates. The best interest of clients is defined for this purpose as the interest of enhancing or protecting the economic value of client accounts, considered as a group rather than individually, as CMA determines in its sole and absolute discretion. In the event a client believes that its other interests require a different vote, CMA will vote as the client clearly instructs, provided CMA receives such instructions in time to act accordingly. Information regarding CMA’s proxy voting decisions is confidential. Therefore, the information may be shared on a need to know basis only, including within CMA and with CMA affiliates. Advisory clients, including mutual funds’ and other funds’ boards, may obtain information on how their proxies were voted by CMA. However, CMA will not selectively disclose its investment company clients’ proxy voting records to third parties. Rather, the investment company clients’ proxy records will be disclosed to shareholders by publicly-available annual filings for 12-month periods ending each year on June 30 ^th on Form N-PX.

CMA endeavors to vote, in accordance with this Policy, all proxies of which it becomes aware prior to the vote deadline date, subject to certain general exceptions described below.

CMA seeks to avoid the occurrence of actual or apparent material conflicts of interest in the proxy voting process by voting in accordance with predetermined voting guidelines and observing other procedures that are intended to prevent where practicable and manage conflicts of interest (refer to Conflicts of Interest section below). CMA’s proxy voting policy and practices are summarized in its Form ADV. Additionally, CMA will provide clients with a copy of its policies, as they may be updated from time to time, upon request.

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Means of Achieving Compliance

The Proxy Group within GWIM Investment Operations is primarily responsible for overseeing the day-to-day operations of the proxy voting process. The Proxy Group’s monitoring will take into account the following elements: (1) periodic review of the proxy vendor’s votes to ensure that the proxy vendor is accurately voting consistent with CMA’s Voting Guidelines; and (2) review of the Columbia Funds’ fund website to ensure that annual proxy voting reports are posted in a timely and accurate manner. CMA has established a Proxy Committee which is responsible for overseeing the proxy voting process.

The specific responsibilities of the Proxy Committee and scope of its oversight are described in the Proxy Committee’s charter.

CMA’S INVESTMENT ASSOCIATES’ RESPONSIBILITIES

Under CMA’s Voting Guidelines, certain matters must be determined on a case-by-case basis. In general, the Proxy Group within GWIM Investment Operations will refer these matters first to the relevant CMA research analyst after first confirming that the proxy matter does not present a potential conflict to CMA. If there is not a research analyst assigned to the particular security, the matter will be referred to the appropriate portfolio manager.

In considering a particular proxy matter, the research analyst or portfolio manager must vote in the clients’ best interest as defined above. Information regarding CMA’s proxy voting decisions is confidential information. Therefore, research analysts and portfolio managers generally must not discuss proxy votes with any person outside of CMA and within CMA except on a need to know basis only.

Research analysts and portfolio managers must discharge their responsibilities consistent with the obligations set forth below (refer to Management of Conflicts of Interest – Additional Procedures). A research analyst or portfolio manager must disclose in writing any inappropriate attempt to influence their recommendation or any other personal interest that they have with the issuer (see Appendix B – Conflicts of Interest Disclosure and Certification Form). For each Proxy Referral (defined below), the research analyst or portfolio manager is responsible for memorializing their recommendation on the Proxy Voting Recommendation Form (see Appendix C) and communicating their recommendation to the Proxy Group.

Research analysts and portfolio managers should seek advice from CRM or Legal with respect to any questions that they have regarding personal conflicts of interests, communications regarding proxies, or other related matters.

CONFLICTS OF INTEREST

For purposes of this policy, a material conflict of interest is a relationship or activity engaged in by CMA, a CMA affiliate ¹ , or a CMA associate that creates an incentive (or appearance thereof) to favor the interests of CMA, the affiliate, or associate, rather than the clients’ interests. However, a material conflict of interest is not automatically created when there is a relationship or activity engaged in by a CMA affiliate, but there is a possibility that a CMA affiliate could cause a conflict. CMA may have a conflict of interest if either CMA has a significant business relationship with a company that is soliciting a proxy, or if a CMA associate involved in the proxy voting decision-making process has a significant personal or family relationship with the particular

Bank of America Corporation (“BAC”), the ultimate corporate parent of CMA, Bank of America, N.A. and all of their numerous affiliates owns, operates and has interests in many lines of business that may create or give rise to the appearance of a conflict of interest between BAC or its affiliates and those of CMA-advised clients. For example, the commercial and investment banking business lines may have interests with respect to issuers of voting securities that could appear to or even actually conflict with CMA’s duty, in the proxy voting process, to act in the best economic interest of its clients.

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company. A conflict of interest is considered to be “material” to the extent that a reasonable person could expect the conflict to influence CMA’s decision on the particular vote at issue. In all cases where there is deemed to be a material conflict of interest, CMA will seek to resolve said conflict in the clients’ best interests.

For those proxy proposals that: (1) are not addressed by CMA’s proxy voting guidelines; (2) the guidelines specify the issue must be evaluated and determined on a case-by-case basis; or (3) a CMA investment associate believes that an exception to the guidelines may be in the best economic interest of CMA’s clients (collectively, “Proxy Referrals”), CMA may vote the proxy, subject to the conflicts of interest procedures set forth below.

In the case of Proxy Referrals, CRM identifies companies with which CMA has a significant business relationships and Proxy Referrals of such companies will be voted consistent with CMA’s conflicts management procedures described below. For Proxy Referrals that do not involve companies with which CMA has a significant business relationship the relevant CMA investment personnel (i.e. research analyst, portfolio manager, members of Proxy Committee) involved in the particular Proxy Referral must report any personal conflict of interest circumstances (e.g., relationships with nominees for directorship, members of an issuer’s or dissident’s management or otherwise, unusual communications with parties outside the investment organization concerning a proxy matter) to Columbia Management’s Conflicts of Interest Officer in writing (see Appendix B). In the event any member of the Proxy Committee has a conflict of interest regarding a given matter, he or she will similarly disclose the circumstance and abstain from participating in the Committee’s determination of whether and/or how to vote in the matter.

If the Proxy Committee, the Chairperson of the Proxy Committee, or the Conflicts Officer determines that a proxy matter presents a material conflict of interest, or a material conflict of interest is otherwise determined to exist through the application of this Policy, CMA will invoke one or more of the following conflict management procedures:

•

Causing the proxies to be voted in accordance with the recommendations of an independent third party (which generally will be CMA’s proxy voting agent);

•

Causing the proxies to be delegated to a qualified, independent third party, which may include CMA’s proxy voting agent; or

•

In unusual cases, with the Client’s consent and upon ample notice, forwarding the proxies to CMA’s clients so that they may vote the proxies directly.

Affiliate Investment Companies and Public Companies

CMA considers (1) proxies solicited by open-end and closed-end investment companies for which CMA or an affiliate serves as an investment adviser or principal underwriter; and (2) proxies solicited by Bank of America Corporation (“BAC”) or other public companies within the BAC organization to present a material conflict of interest for CMA. Consequently, the proxies of such affiliates will be voted following one of the conflict management practices discussed above.

Management of Conflicts of Interest – Additional Procedures

In certain circumstances, CMA follows the proxy guidelines and uses other research services provided by the proxy vendor or another independent third party. CMA reviews its proxy vendor’s conflicts of interest procedures as part of its oversight of the proxy vendor’s services.

CMA and other BAC affiliates have adopted various other policies and procedures that help reinforce this Policy. Please see any associated documents.

Ownership Limits – Delegation of Proxy Voting to an Independent Third Party

From time to time, CMA may face regulatory or compliance limits on the types or amounts of voting securities that it may purchase or hold for client accounts. Among other limits, federal, state, foreign regulatory restrictions, or company-specific ownership limits may restrict the total percentage of an issuer’s voting securities that CMA can hold for clients (collectively, “Ownership Limits”).

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The regulations or company-specific documents governing a number of these Ownership Limits often focus upon holdings in voting securities. As a result, in limited circumstances in order to comply with such Ownership Limits and/or internal policies designed to comply with such limits, CMA may delegate proxy voting in certain issuers to a qualified, independent third party, who may be CMA’s proxy voting agent.

PROXY VOTING GUIDELINES

A. CMA’s Proxy Voting Guidelines – General Practices.

The Proxy Committee has adopted the guidelines for voting proxies specified in Appendix A of this policy. CMA uses an independent, third-party proxy vendor to implement its proxy voting process as CMA’s proxy voting agent. In general, whenever a vote is solicited, the proxy vendor will execute the vote according to CMA’s Voting Guidelines.

B. Ability to Vote Proxies Other than as Provided by Voting Guidelines.

A Portfolio Manager or other party involved with a client’s account may conclude that the best interest of the firm’s client, as defined above, requires that a proxy be voted in a manner that differs from the predetermined proxy Voting Guidelines. In this situation, he or she will request in writing that the Proxy Committee consider voting the proxy other than according to such Guidelines and provide information as the Proxy Committee may request. The Proxy Committee may consider the matter, subject to the conflicts of interest procedures discussed above.

C. Other Proxy Matters

For the following categories, proxies will be voted as stated below:

1. New Proposals . For certain new proposals that are expected to be proposed to shareholders of multiple companies, the Proxy Committee may develop a Voting Guideline which will be incorporated into this Policy.

2. Accounts Adhering to Taft Hartley Principles. All proposals for accounts adhering to Taft Hartley principles will be voted according to the Taft Hartley Guidelines developed by the proxy vendor.

3. Accounts Adhering to Socially Responsible Principles. All proposals for accounts adhering to socially responsible principles will be voted according to the Socially Responsible Guidelines developed by the proxy vendor or as specified by the client.

4. Proxies of International Issuers . In general, CMA will refrain from voting securities in cases where international issuers impose share blocking restrictions. However, in the exceptional circumstances that CMA determines that it would be appropriate to vote such securities, all proposals for these securities will be voted only on the specific instruction of the Proxy Committee and to the extent practicable in accordance with the Voting Guidelines set forth in this Policy. Additionally, proxies will typically not be voted in markets where powers of attorney are required to be executed in order to vote shares.

5. Proxy Referrals for Passive Index Accounts. Proxy Referrals for a security that is held only within a passive index account managed by CMA’s Quantitative Strategies Group and not in any other account within CMA, shall be voted according to the guidelines developed by the proxy vendor or as specified by the client. However, if a security is held within a passive index account managed by CMA’s Quantitative Strategies Group and within another CMA-managed account (including without limitation an account actively managed by CMA’s Quantitative Strategies Group), all proposals, including Proxy Referrals, will be voted in accordance with the Voting Guidelines, subject to the other provisions of this Policy.

6. Proxy Voting for Securities on Loan . CMA generally votes in cases where shares have been loaned from actively managed Columbia Funds as long as the shares have been recalled in a timely manner. However, CMA generally does not vote shares that have been loaned from passively managed Columbia Index Funds. Other CMA clients may have their own stock loan programs and may or may not recall their shares for proxy voting.

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Supervision

Managers and supervisory personnel are responsible for ensuring that their associates understand and follow this policy and any applicable procedures adopted by the business group to implement the policy. The Proxy Committee has ultimate responsibility for the implementation of this Policy.

Escalation

With the exception of conflicts of interest-related matters, issues arising under this policy should be escalated to the Proxy Committee. Issues involving potential or actual conflicts of interest should be promptly communicated to the Columbia Management Conflicts Officer.

Monitoring/Oversight

CRM and/or Corporate Internal Audit Group perform periodic reviews and assessments of various lines of businesses, including a review of Columbia Management’s compliance with the Proxy Voting Policy.

Recordkeeping

CMA will create and maintain records of each investment company’s proxy record for 12-month periods ended June 30 ^th . CMA will compile the following information for each matter relating to a portfolio security considered at any shareholder meeting during the period covered by the annual report and for which CMA was entitled to vote:

•

The name of the issuer of the security;

•

The exchange ticker symbol of the portfolio security (if symbol is available through reasonably practicable means);

•

The Council on Uniform Securities Identification Procedures number for the portfolio security (if number is available through reasonably practicable means);

•

The shareholder meeting date;

•

A brief identification of the matter voted on;

•

Whether the matter was proposed by the issuer or by a security holder;

•

Whether the company cast its vote on the matter;

•

How the company cast its vote (e.g., for or against proposal, or abstain; for or withhold regarding the election of directors); and

•

Whether the company cast its vote for or against management.

Business groups and support partners are responsible for maintaining all records necessary to evidence compliance with this policy. The records must be properly maintained and readily accessible in order to evidence compliance with this policy.

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These records include:


Document		Responsible Party
Proxy Committee Meeting Minutes and Related Materials		Proxy Group in GWIM Investment Operations

Proxy Vote Recommendation Form and Supporting Materials of Investment Management Personnel Concerning Proxy Decisions and Recommendations (or any other document created by CMA that was material to making a voting decision or that memorializes the basis for the voting decision)		Proxy Group in GWIM Investment Operations


Conflicts of Interest Review Documentation, including Conflicts of Interest Forms		Compliance Risk Management

Client Communications Regarding Proxy Matters		Client Service Group

Copy of Each Applicable Proxy Statement Unless it has been Filed with the SEC and may be Obtained from the SEC’s EDGAR System		Proxy Group in GWIM Investment Operations

Records should be retained for a period of not less than six years plus the current year. Records must be retained in an appropriate office of CM for the first three years.

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APPENDIX A – CMA’s Proxy Voting Policy

CMA’S VOTING GUIDELINES

A. The Proxy Committee has adopted the following guidelines for voting proxies:

1. Matters Relating to the Board of Directors/Corporate Governance

CMA generally will vote FOR:

•

Proposals for the election of directors or for an increase or decrease in the number of directors, provided that no more than one-third of the Board of Directors would, presently or at any time during the previous three-year period, be from management.

However, CMA generally will WITHHOLD votes from pertinent director nominees if:

(i)

the board as proposed to be constituted would have more than one-third of its members from management;

(ii)

the board does not have audit, nominating, and compensation committees composed solely of directors who qualify as being regarded as “independent,” i.e. having no material relationship, directly or indirectly, with the Company, as CMA’s proxy voting agent may determine (subject to the Proxy Committee’s contrary determination of independence or non-independence);

(iii)

the nominee, as a member of the audit committee, permitted the company to incur excessive non-audit fees (as defined below regarding other business matters — ratification of the appointment of auditors);

(iv)

a director serves on more than six public company boards;

(v)

the CEO serves on more than two public company boards other than the company’s board; or

(vi)

CMA generally will vote AGAINST Director nominee of a company who is chief executive officer of another company on whose board the company’s chief executive officer sits (i.e. interlocking executives).

One a CASE-BY-CASE basis, CMA may WITHHOLD votes for a director nominee who has failed to observe good corporate governance practices or, through specific corporate action or inaction (e.g. failing to implement policies for which a majority of shareholders has previously cast votes in favor; served voted for the adoption of a poison pill without approval of shareholders), has demonstrated a disregard for the interests of shareholders.

•

Proposals requesting that the board audit, compensation and/or nominating committee be composed solely of independent directors. The Audit Committee must satisfy the independence and experience requirements established by the Securities and Exchange Commission (“SEC”) and the New York Stock Exchange, or appropriate local requirements for foreign securities. At least one member of the Audit Committee must qualify as a “financial expert” in accordance with SEC rules.

•

Proposals to declassify a board, absent special circumstances that would indicate that shareholder interests are better served by a classified board structure.

CMA generally will vote FOR:

•

Proposals to separate the role of Chairman of the Board and CEO.

•

Proposals that grant or restore shareholder ability to remove directors with or without cause.

•

Proposals to permit shareholders to elect directors to fill board vacancies.

•

Proposals that encourage directors to own a minimum amount of company stock.

•

Proposals to provide or to restore shareholder appraisal rights.

•

Proposals for the company to adopt confidential voting.

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CMA will generally vote FOR shareholder proposals calling for majority voting thresholds for director elections unless the company has adopted formal corporate governance principles that present a meaningful alternative to the majority voting standard and/or provides an adequate response to both new nominees as well as incumbent nominees who fail to receive a majority of votes cast.

CMA will generally vote FOR 162(m) bonus plans unless the Proxy Administrator recommends voting against a specific plan, in which case CMA will vote on a CASE-BY-CASE basis.

CMA generally will vote AGAINST:

•

Proposals to classify boards, absent special circumstances indicating that shareholder interests would be better served by a classified board structure.

•

Proposals that give management the ability to alter the size of the board without shareholder approval.

•

Proposals that provide directors may be removed only by supermajority vote.

•

Proposals which allow more than one vote per share in the election of directors.

•

Proposals that provide that only continuing directors may elect replacements to fill board vacancies.

•

Proposals that mandate a minimum amount of company stock that directors must own.

•

Proposals to limit the tenure of non-management directors.

CMA will vote on a CASE-BY-CASE basis:

•

In contested elections of directors. Proposals to adopt or eliminate cumulative voting.

•

CMA generally will vote on a CASE-BY-CASE basis on board approved proposals relating to corporate governance. Such proposals include, but are not limited to:

•

Reimbursement of proxy solicitation expenses taking into consideration whether or not CMA was in favor of the dissidents.

•

Proxy contest advance notice. CMA generally will vote FOR proposals that allow shareholders to submit proposals as close to the meeting date as possible while allowing for sufficient time for Company response, SEC review, and analysis by other shareholders.

•

CMA will vote on a CASE-BY-CASE basis to indemnify directors and officers, and AGAINST proposals to indemnify external auditors.

•

CMA will vote FOR the indemnification of internal auditors, unless the costs associated with the approval are not disclosed.

2. Compensation

CMA generally will vote FOR:

•

CMA generally will vote FOR management sponsored compensation plans (such as bonus plans, incentive plans, stock option plans, pension and retirement benefits, stock purchase plans or thrift plans) if they are consistent with industry and country standards.

•

Proposals requiring that executive severance arrangements be submitted for shareholder ratification.

•

Proposals asking a company to expense stock options.

•

Proposals to put option repricings to a shareholder vote.

•

Employee stock purchase plans that have the following features: (i) the shares purchased under the plan are acquired for no less than 85% of their market value, (ii) the offering period under the plan is 27 months or less, and (iii) dilution is 10% or less.

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•

Shareholder proposals to adopt a non-binding advisory vote on Executive Compensation (“Say on Pay”).

•

CMA recognizes that individual compensation committees are in the best position to determine the optimal design of share based plans. However, CMA generally prefers a greater use of restricted stock in place of stock options due to the greater uncertainty involved with the valuation of stock options at the time of issue.

CMA generally will vote AGAINST:

•

Stock option plans that permit issuance of options with an exercise price below the stock’s current market price, or that permit replacing or repricing of out-of-the money options.

•

Proposals to authorize the replacement or repricing of out-of-the money options.

•

Proposals requesting that plan administrators have advance authority to amend the terms of a plan without detailed disclosure of the specific amendments. When sufficient details are provided on the amendments permitted by the advance authority, CMA will recommend on such proposals on a CASE-BY-CASE basis.

•

CMA generally is opposed to compensation plans that substantially dilute ownership interest in a company, provide participants with excessive awards, or have objectionable structural features. Specifically, for equity-based plans, if the proposed number of shares authorized for option programs (excluding authorized shares for expired options) exceeds 5% of the average number of shares outstanding for the last 3 years, or exceeds 1% of the average number of shares outstanding for the last 3 years (for directors only), CMA will vote on such proposals on a CASE-BY-CASE basis. CMA requires that management provide substantial justification for the repricing of options.

CMA will vote on a CASE-BY-CASE basis:

•

Proposals regarding approval of specific executive severance arrangements.

•

-Management proposals regarding “Say on Pay” (i.e. non-binding advisory vote on pay).

•

Proposals that involve awarding 50% or more of the equity shares of an equity-based compensation plan to the top five or fewer executives.

3. Capitalization

CMA generally will vote FOR:

•

Proposals to increase the authorized shares for stock dividends, stock splits (and reverse stock splits) or general issuance, unless proposed as an anti-takeover measure or a general issuance proposal increases the authorization by more than 30% without a clear need presented by the company. Proposals for reverse stock splits should include an overall reduction in authorization.

For companies recognizing preemptive rights for existing shareholders, CMA generally will vote FOR general issuance proposals that increase the authorized shares by more than 30%. CMA will vote on a CASE-BY-CASE basis all such proposals by companies that do not recognize preemptive rights for existing shareholders.

•

Proposals for the elimination of authorized but unissued shares or retirement of those shares purchased for sinking fund or treasury stock.

•

Proposals to institute/renew open market share repurchase plans in which all shareholders may participate on equal terms.

•

Proposals to reduce or change the par value of common stock, provided the number of shares is also changed in order to keep the capital unchanged.

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CMA will evaluate on a CASE-BY-CASE basis proposals regarding:

•

Management proposals that allow listed companies to de-list and terminate the registration of their common stock. CMA will determine whether the transaction enhances shareholder value by giving consideration to:

•

Whether the company has attained benefits from being publicly traded.

•

Cash-out value

•

Balanced interests of continuing vs. cashed-out shareholders

•

Market reaction to public announcement of transaction

4. Mergers, Restructurings and Other Transactions

CMA will review, on a CASE-BY-CASE basis, business transactions such as mergers, acquisitions, reorganizations, liquidations, spinoffs, buyouts and sale of all or substantially all of a company’s assets.

5. Anti-Takeover Measures

CMA generally will vote AGAINST proposals intended largely to avoid acquisition prior to the occurrence of an actual event or to discourage acquisition by creating a cost constraint. With respect to the following measures, CMA generally will vote as follows:

Poison Pills

•

CMA votes FOR shareholder proposals that ask a company to submit its poison pill for shareholder ratification.

•

CMA generally votes FOR shareholder proposals to eliminate a poison pill.

•

CMA generally votes AGAINST management proposals to ratify a poison pill.

Greenmail

•

CMA will vote FOR proposals to adopt anti-greenmail charter or bylaw amendments or to otherwise restrict a company’s ability to make greenmail payments.

Supermajority vote

•

CMA will vote AGAINST board-approved proposals to adopt anti-takeover measures such as supermajority voting provisions, issuance of blank check preferred stock, the creation of a separate class of stock with disparate voting rights and charter amendments adopting control share acquisition provisions.

Control Share Acquisition Provisions

•

CMA will vote FOR proposals to opt out of control share acquisition statutes.

6. Other Business Matters

CMA generally will vote FOR:

•

Bylaw amendments giving holders of at least 25% of outstanding common stock the ability to call a special meeting of stockholders.

•

Board governance document amendments or other proposals which give the lead independent director the authority to call special meetings of the independent directors at any time.

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CMA generally will vote FOR:

•

Proposals to approve routine business matters such as changing the company’s name and procedural matters relating to the shareholder meeting such as approving the minutes of a prior meeting.

•

Proposals to ratify the appointment of auditors, unless any of the following apply in which case CMA will generally vote AGAINST the proposal:

•

Credible reason exists to question:

•

The auditor’s independence, as determined by applicable regulatory requirements.

•

The accuracy or reliability of the auditor’s opinion as to the company’s financial position.

•

Fees paid to the auditor or its affiliates for “non-audit” services exceeds 25% of the total fees paid for “audit,” “audit-related” and “tax compliance” and/or “tax return preparation” services, as disclosed in the company’s proxy materials.

•

Bylaw or charter changes that are of a housekeeping nature (e.g., updates or corrections).

•

Proposals to approve the annual reports and accounts provided the certifications required by the Sarbanes Oxley Act of 2002 have been provided.

CMA generally will vote AGAINST:

•

Proposals to eliminate the right of shareholders to act by written consent or call special meetings.

•

Proposals providing management with authority to adjourn an annual or special shareholder meeting absent compelling reasons, or to adopt, amend or repeal bylaws without shareholder approval, or to vote unmarked proxies in favor of management.

•

Shareholder proposals to change the date, time or location of the company’s annual meeting of shareholders.

CMA will vote AGAINST:

•

Authorization to transact other unidentified substantive (as opposed to procedural) business at a meeting.

CMA will vote on a CASE-BY-CASE basis:

•

Proposals to change the location of the company’s state of incorporation. CMA considers whether financial benefits (e.g., reduced fees or taxes) likely to accrue to the company as a result of a reincorporation or other change of domicile outweigh any accompanying material diminution of shareholder rights.

•

Proposals on whether and how to vote on “bundled” or otherwise conditioned proposals, depending on the overall economic effects upon shareholders.

CMA generally will ABSTAIN from voting on shareholder proposals predominantly involving social, socio-economic, environmental, political or other similar matters on the basis that their impact on share value can rarely be anticipated with any high degree of confidence. CMA may, on a CASE-BY-CASE basis , vote:

•

FOR proposals seeking inquiry and reporting with respect to, rather than cessation or affirmative implementation of, specific policies where the pertinent issue warrants separate communication to shareholders; and

•

FOR or AGAINST the latter sort of proposal in light of the relative benefits and detriments (e.g. distraction, costs, other burdens) to share value which may be expected to flow from passage of the proposal.

B-12

7. Other Matters Relating to Foreign Issues

CMA generally will vote FOR:

•

Most stock (scrip) dividend proposals. CMA votes AGAINST proposals that do not allow for a cash option unless management demonstrates that the cash option is harmful to shareholder value.

•

Proposals to capitalize the company’s reserves for bonus issues of shares or to increase the par value of shares.

•

Proposals to approve control and profit transfer agreements between a parent and its subsidiaries.

•

Management proposals seeking the discharge of management and supervisory board members, unless there is concern about the past actions of the company’s auditors/directors and/or legal action is being taken against the board by other shareholders.

•

Management proposals concerning allocation of income and the distribution of dividends, unless the proxy vendor would vote against such proposal in accordance with its guidelines, in which case CMA will evaluate the proposal on a CASE-BY-CASE basis.

•

Proposals for the adoption of financing plans if they are in the best economic interests of shareholders.

CMA will generally vote FOR proposals to approve Directors’ Fees, unless the proxy vendor would vote against such proposal in accordance with its guidelines, in which case CMA will evaluate the proposal on a CASE-BY-CASE basis.

CMA will evaluate management proposals to approve protective preference shares for Netherlands located company-friendly foundations proposals on a CASE-BY-CASE basis and will only support resolutions if:

•

The supervisory board needs to approve an issuance of shares while the supervisory board is independent within the meaning of CMA’ categorization rules and the Dutch Corporate Governance Code.

•

No call/put option agreement exists between the company and the foundation.

•

There is a qualifying offer clause or there are annual management and supervisory board elections.

•

The issuance authority is for a maximum of 18 months.

•

The board of the company-friendly foundation is independent.

•

The company has disclosed under what circumstances it expects to make use of the possibility to issue preference shares.

•

There are no priority shares or other egregious protective or entrenchment tools.

•

The company releases its proxy circular, with details of the poison pill proposal, at least three weeks prior to the meeting.

•

Art 2:359c Civil Code of the legislative proposal has been implemented.

8. Investment Company Matters

Election of Directors:

CMA will vote on a CASE-BY-CASE basis proposals for the election of directors, considering the following factors:

•

Board structure

•

Attendance at board and committee meetings.

B-13

CMA will WITHHOLD votes from directors who:

•

Attend less than 75 percent of the board and committee meetings without a valid excuse for the absences. Valid reasons include illness or absence due to company business. Participation via telephone is acceptable. In addition, if the director missed only one meeting or one day’s meetings, votes should not be withheld even if such absence dropped the director’s attendance below 75 percent.

•

Ignore a shareholder proposal that is approved by a majority of shares outstanding;

•

Ignore a shareholder proposal this is approved by a majority of the votes cast for two consecutive years;

•

Are interested directors and sit on the audit or nominating committee; or

•

Are interested directors and the full board serves as the audit or nominating committee or the company does not have one of these committees.

Proxy Contests:

CMA will vote on a CASE-BY-CASE basis proposals for proxy contests, considering the following factors:

•

Past performance relative to its peers

•

Market in which fund invests

•

Measures taken by the board to address the pertinent issues (e.g., closed-end fund share market value discount to NAV)

•

Past shareholder activism, board activity and votes on related proposals

•

Strategy of the incumbents versus the dissidents

•

Independence of incumbent directors; director nominees

•

Experience and skills of director nominees

•

Governance profile of the company

•

Evidence of management entrenchment

Converting Closed-end Fund to Open-end Fund:

CMA will vote conversion proposals on a CASE-BY-CASE basis, considering the following factors:

•

Past performance as a closed-end fund

•

Market in which the fund invests

•

Measures taken by the board to address the discount

•

Past shareholder activism, board activity, and votes on related proposals.

Investment Advisory Agreements:

CMA will vote investment advisory agreements on a CASE-BY-CASE basis, considering the following factors:

•

Proposed and current fee schedules

•

Fund category/investment objective

•

Performance benchmarks

•

Share price performance as compared with peers

•

Resulting fees relative to peers

•

Assignments (where the adviser undergoes a change of control)

B-14

Approving New Classes or Series of Shares:

CMA will vote FOR the establishment of new classes or series of shares.

Preferred Stock Proposals:

CMA will vote on a CASE-BY-CASE basis proposals for the authorization for or increase in the preferred shares, considering the following factors:

•

Stated specific financing purpose

•

Possible dilution for common shares

•

Whether the shares can be used for anti-takeover purposes

Policies Addressed by the Investment Company Act of 1940 (“1940 Act”):

CMA will vote proposals regarding adoption or changes of policies addressed by the 1940 Act on a CASE-BY-CASE basis, considering the following factors:

•

Potential competitiveness

•

Regulatory developments

•

Current and potential returns

•

Current and potential risk

CMA generally will vote FOR these amendments as long as the proposed changes do not fundamentally alter the investment focus of the fund and do comply with current SEC interpretations.

Changing a Fundamental Restriction to a Non-fundamental Restriction:

CMA will vote on a CASE-BY-CASE basis proposals to change a fundamental restriction to a non-fundamental restriction, considering the following factors:

•

Fund’s target investments

•

Reasons given by the fund for the change

•

Projected impact of the change on the portfolio

Change Fundamental Investment Objective to Non-fundamental:

CMA will vote AGAINST proposals to change a fund’s investment objective from fundamental to non-fundamental unless management acknowledges meaningful limitations upon its future requested ability to change the objective

Name Change Proposals:

CMA will vote on a CASE-BY-CASE basis proposals to change a fund’s name, considering the following factors:

•

Political/economic changes in the target market

•

Consolidation in the target market

•

Current asset composition

B-15

Change in Fund’s Subclassification:

CMA will vote on a CASE-BY-CASE basis proposals to change a fund’s subclassification, considering the following factors:

•

Potential competitiveness

•

Current and potential returns

•

Risk of concentration

•

Consolidation in target industry

Disposition of Assets/Termination/Liquidation:

CMA will vote on a CASE-BY-CASE basis these proposals, considering the following factors:

•

Strategies employed to salvage the company

•

Past performance of the fund

•

Terms of the liquidation

Changes to the Charter Document:

CMA will vote on a CASE-BY-CASE basis proposals to change the charter document, considering the following factors:

•

The degree of change implied by the proposal

•

The efficiencies that could result

•

The state of incorporation; net effect on shareholder rights

•

Regulatory standards and implications

CMA will vote FOR:

•

Proposals allowing the Board to impose, without shareholder approval, fees payable upon redemption of fund shares, provided imposition of such fees is likely to benefit long-term fund investors (e.g., by deterring market timing activity by other fund investors)

•

Proposals enabling the Board to amend, without shareholder approval, the fund’s management agreement(s) with its investment adviser(s) or sub-advisers, provided the amendment is not required by applicable law (including the Investment Company Act of 1940) or interpretations thereunder to require such approval

CMA will vote AGAINST:

•

Proposals enabling the Board to:

•

Change, without shareholder approval the domicile of the fund

•

Adopt, without shareholder approval, material amendments of the fund’s declaration of trust or other organizational document

Changing the Domicile of a Fund:

CMA will vote on a CASE-BY-CASE basis proposals to reincorporate, considering the following factors:

•

Regulations of both states

•

Required fundamental policies of both states

•

The increased flexibility available

B-16

Authorizing the Board to Hire and Terminate Subadvisors Without Shareholder Approval:

CMA will vote FOR proposals to enable the Board or Investment Adviser to hire and terminate sub-advisers, without shareholder approval, in accordance with applicable rules or exemptive orders under the Investment Company Act of 1940

Distribution Agreements:

CMA will vote these proposals on a CASE-BY-CASE basis, considering the following factors:

•

Fees charged to comparably sized funds with similar objectives

•

The proposed distributor’s reputation and past performance

•

The competitiveness of the fund in the industry

•

Terms of the agreement

Master-Feeder Structure:

CMA will vote FOR the establishment of a master-feeder structure.

Mergers:

CMA will vote merger proposals on a CASE-BY-CASE basis, considering the following factors:

•

Resulting fee structure

•

Performance of both funds

•

Continuity of management personnel

•

Changes in corporate governance and their impact on shareholder rights

Shareholder Proposals to Establish Director Ownership Requirement:

CMA will generally vote AGAINST shareholder proposals that mandate a specific minimum amount of stock that directors must own in order to qualify as a director or to remain on the board. While CMA favors stockownership on the part of directors, the company should determine the appropriate ownership requirement.

Shareholder Proposals to Reimburse Shareholder for Expenses Incurred:

CMA will vote on a CASE-BY-CASE basis proposals to reimburse proxy solicitation expenses.

Shareholder Proposals to Terminate the Investment Adviser:

CMA will vote on a CASE-BY-CASE basis proposals to terminate the investment adviser, considering the following factors:

•

Performance of the fund’s NAV

•

The fund’s history of shareholder relations

•

The performance of other funds under the adviser’s management

B-17

APPENDIX B

Conflicts of Interest Disclosure and Certification Form

Conflict Review Questionnaire for Proxy Voting Working Group Members and Other Individuals

Participating in the Proxy Voting Decision-Making Process.

Instructions : Please complete each of the questions. Please provide an explanation for any affirmative responses. Return the completed questionnaire to Columbia Management Conflicts of Interest Officer.


Issuer and Proxy Matter:

Do you or any member of your immediate family have an existing (or potential) business, financial, personal or other relationship with any management personnel of the issuer ¹ ?

___________________________________________________________________________________

Do you or any member of your immediate family have an existing (or potential) business, financial, personal or other relationship with any person participating, supporting, opposing or otherwise connected with the particular proxy proposal (e.g., principals of the issuer; director nominees of issuer company; shareholder activists)?

___________________________________________________________________________________

Have you discussed this particular proxy proposal with anyone outside of Columbia Management’s investment group ² ?

___________________________________________________________________________________

Are you aware of any other potential personal conflicts of interest not described above? Please detail below.

___________________________________________________________________________________


Name:



Signed:



Date:

¹	Personal investing in the issuer by you or a member of your immediate family does not require an affirmative response to this item.

²	Communications with issuer or solicitors in the regular course of business would not have to be disclosed on this form.

B-18

APPENDIX C

CMA Proxy Vote Recommendation/Proxy Committee Request Form


Name of Investment Associate:


Company Name:


Overview of Proxy Vote and Meeting Date:

Proxy Agenda Item(s)


Description of Item:


(The above information will be pre-populated by the Proxy Department.)


Recommendation (FOR, AGAINST, ABSTAIN) including brief rationale:

Please attach any supporting information other than analysis or reports provided by the Proxy Department.

Signed

By signing, I am certifying that I either have no conflicts of interest-related information to report or have sent a completed “Conflicts of Interest Disclosure and Certification Form” to Compliance Risk Management (Conflicts Officer).

Send Completed Forms to:

GWIM Investment Operations – Proxy Department

In the case of Proxy Votes to be referred to the Proxy Committee, submit this form and materials to the Chair of the Proxy Committee

B-19

Columbia Management ^®

COLUMBIA FUNDS SERIES TRUST

Class A, Class B, Class C and Class Z Shares

STATEMENT OF ADDITIONAL INFORMATION

August 1, 2010

State Intermediate Municipal Bond Funds


Fund	Class A Shares	Class B Shares	Class C Shares	Class Z Shares
Columbia California Intermediate Municipal Bond Fund	NACMX	N/A	N/A	NCMAX
Columbia Georgia Intermediate Municipal Bond Fund	NGIMX	NGITX	NGINX	NGAMX
Columbia Maryland Intermediate Municipal Bond Fund	NMDMX	NMITX	NMINX	NMDBX
Columbia North Carolina Intermediate Municipal Bond Fund	NNCIX	NNITX	NNINX	NNIBX
Columbia South Carolina Intermediate Municipal Bond Fund	NSCIX	NISCX	NSICX	NSCMX
Columbia Virginia Intermediate Municipal Bond Fund	NVAFX	NVANX	NVRCX	NVABX

This Statement of Additional Information (SAI) is not a prospectus, is not a substitute for reading any prospectus and is intended to be read in conjunction with the Funds’ prospectuses dated August 1, 2010 . The most recent annual report for the Funds, which include the Funds’ audited financial statements dated March 31, 2010, are incorporated by reference into this SAI.

INT [ ]

TABLE OF CONTENTS


		Page
SAI PRIMER		3
ABOUT THE TRUST		6
ABOUT THE FUNDS’ INVESTMENTS		7
Certain Investment Activity Limits		7
Fundamental and Non-Fundamental Investment Policies		7
Exemptive Orders		8
Permissible Investments and Related Risks		9
Borrowings		42
Short Sales		42
Lending Securities		43
Portfolio Turnover		44
Disclosure of Portfolio Information		44
INVESTMENT ADVISORY AND OTHER SERVICES		50
The Adviser and Investment Advisory Services		50
The Administrator		56
Pricing and Bookkeeping Services		57
The Principal Underwriter/Distributor		58
	Other Roles and Relationships of Ameriprise Financial and its Affiliates – Certain Conflicts of Interest	60
Other Services Provided		64
Distribution and Servicing Plans		65
Expense Limitations		66
Codes of Ethics		67
Proxy Voting Policies and Procedures		67
Expenses Paid by Third Parties		68
FUND GOVERNANCE		69
The Board		69
The Officers		77
BROKERAGE ALLOCATION AND OTHER PRACTICES		81
General Brokerage Policy, Brokerage Transactions and Broker Selection		81
Brokerage Commissions		83
Directed Brokerage		84
Securities of Regular Broker/Dealers		84
Additional Shareholder Servicing Payments		84
Additional Financial Intermediary Payments		86
CAPITAL STOCK AND OTHER SECURITIES		89
Description of the Trust’s Shares		89
PURCHASE, REDEMPTION AND PRICING OF SHARES		92
Purchase and Redemption		92
Offering Price		95
TAXATION		97
CONTROL PERSONS AND PRINCIPAL SHAREHOLDERS		114
LEGAL PROCEEDINGS		116
APPENDIX A — DESCRIPTIONS OF SECURITIES RATINGS		A-1
APPENDIX B — PROXY VOTING POLICIES AND PROCEDURES		B-1
APPENDIX C — DESCRIPTION OF STATE CONDITIONS		C-1

SAI PRIMER

•

the organization of the Trust;

•

the Funds’ investments;

•

the governance of the Funds;

•

the Funds’ brokerage practices;

•

the share classes offered by the Funds;

•

the purchase, redemption and pricing of Fund shares; and

•

the application of U.S. federal income tax laws.

Investors may find this information important and helpful. If you have any questions about the Funds, please call Columbia Funds at 800.345.6611 or contact your financial advisor.

Before reading the SAI, you should consult the Glossary below, which defines certain of the terms used in the SAI.

Glossary


Term		Definition
1933 Act		Securities Act of 1933, as amended

1934 Act		Securities Exchange Act of 1934, as amended

1940 Act		Investment Company Act of 1940, as amended

Administrative Services Agreement		The administrative services agreement between the Trust, on behalf of the Funds, and the Administrator

Administrator		Columbia Management Investment Advisers, LLC

Adviser		Columbia Management Investment Advisers, LLC

Ameriprise Financial		Ameriprise Financial, Inc.

BANA		Bank of America, National Association

Bank of America		Bank of America Corporation

BFDS/DST		Boston Financial Data Services, Inc./DST Systems, Inc.

Board		The Trust’s Board of Trustees

Brandes		Brandes Investment Partners, L.P.


Term		Definition
California Intermediate Municipal Bond Fund		Columbia California Intermediate Municipal Bond Fund

CMOs		Collateralized mortgage obligations

Code		Internal Revenue Code of 1986, as amended

Codes of Ethics		The codes of ethics adopted by the Board pursuant to Rule 17j-1 under the 1940 Act

Columbia Funds Complex		The mutual fund complex that is comprised of the open-end investment management companies advised by the Adviser or its affiliates and principally underwritten by Columbia Management Investment Distributors, Inc., including funds using the RiverSource, Threadneedle and Seligman brands and funds using the Columbia brand

Columbia Funds or Columbia Funds Family		The funds within the Columbia Funds Complex using the Columbia brand

Custodian or State Street		State Street Bank and Trust Company

Distribution Agreement		The distribution agreement between the Trust, on behalf of the Funds, and the Distributor

Distribution Plan(s)		One or more of the plans adopted by the Board pursuant to Rule 12b-1 under the 1940 Act for the distribution of the Funds’ shares

Distributor		Columbia Management Investment Distributors, Inc.

FHLMC		The Federal Home Loan Mortgage Corporation

FDIC		Federal Deposit Insurance Corporations

Fitch		Fitch, Inc.

FNMA		Federal National Mortgage Association

The Fund(s) or a Fund		One or more of the open-end management investment companies listed on the front cover of this SAI that are series of the Trust

Georgia Intermediate Municipal Bond Fund		Columbia Georgia Intermediate Municipal Bond Fund

GNMA		Government National Mortgage Association

Independent Trustees		The Trustees of the Board who are not “interested persons” (as defined in the 1940 Act) of the Funds

Interested Trustee		A Trustee of the Board who is an “interested person” (as defined in the 1940 Act) of the Funds

Investment Management Services Agreement		The investment management services agreement between the Trust, on behalf of the Funds, and the Adviser

IRS		United States Internal Revenue Service

LIBOR		London Interbank Offered Rate

Maryland Intermediate Municipal Bond Fund		Columbia Maryland Intermediate Municipal Bond Fund

Marsico		Marsico Capital Management, LLC

Moody’s		Moody’s Investors Service, Inc.

NASDAQ		National Association of Securities Dealers Automated Quotations system


Term		Definition
North Carolina Intermediate Municipal Bond Fund		Columbia North Carolina Intermediate Municipal Bond Fund

NRSRO		Nationally recognized statistical ratings organization (such as Moody’s, Fitch or S&P)

NSCC		National Securities Clearing Corporation

NYSE		New York Stock Exchange

Previous Administrator		Columbia Management Advisors, LLC

Previous Adviser		Columbia Management Advisors, LLC

Previous Distributor		Columbia Management Distributors, LLC

Previous Transfer Agent		Columbia Management Services, Inc.

REIT		Real estate investment trust

REMIC		Real estate mortgage investment conduit

RIC		A “regulated investment company,” as such term is used in the Internal Revenue Code of 1986, as amended

S&P		Standard & Poor’s, a division of McGraw-Hill Companies (“Standard & Poor’s” and “S&P” are trademarks of The McGraw-Hill Companies, Inc. and have been licensed for use by the Adviser. The Columbia Funds are not sponsored, endorsed, sold or promoted by Standard & Poor’s and Standard & Poor’s makes no representation regarding the advisability of investing in the Columbia Funds)

SAI		This Statement of Additional Information

SEC		United States Securities and Exchange Commission

Selling Agent(s)		One or more of the banks, broker/dealers or other financial institutions that have entered into a sales support agreement with the Distributor

Servicing Agent(s)		One or more of the banks, broker/dealers or other financial institutions that have entered into a shareholder servicing agreement with the Distributor

South Carolina Intermediate Municipal Bond Fund		Columbia South Carolina Intermediate Municipal Bond Fund

State Intermediate Municipal Bond Fund(s)		One or more of the state intermediate municipal bond funds in the Columbia Funds Family

Transfer Agency Agreement		The transfer agency agreement between the Trust, on behalf of the Funds, and Columbia Management Investment Services Corp.

Transfer Agent		Columbia Management Investment Services Corp.

The Trust or CFST		Columbia Funds Series Trust, the registered investment company in the Columbia Funds Family to which this SAI relates

Trustee(s)		One or more of the Board’s Trustees

Virginia Intermediate Municipal Bond Fund		Columbia Virginia Intermediate Municipal Bond Fund

ABOUT THE TRUST

On September 26, 2005, the names of the Funds were changed as follows: Nations California Intermediate Municipal Bond Fund to Columbia California Intermediate Municipal Bond Fund, Nations Georgia Intermediate Municipal Bond Fund to Columbia Georgia Intermediate Municipal Bond Fund, Nations Maryland Intermediate Municipal Bond Fund to Columbia Maryland Intermediate Municipal Bond Fund, Nations North Carolina Intermediate Municipal Bond Fund to Columbia North Carolina Intermediate Municipal Bond Fund, Nations South Carolina Intermediate Municipal Bond Fund to Columbia South Carolina Intermediate Municipal Bond Fund and Nations Virginia Intermediate Municipal Bond Fund to Columbia Virginia Intermediate Municipal Bond Fund.

Each of the Funds represents a separate series of the Trust and, except for the Maryland Intermediate Municipal Bond Fund, is an open-end diversified management investment company. Each of the Funds has a fiscal year end of March 31 ^st .

ABOUT THE FUNDS’ INVESTMENTS

Certain Investment Activity Limits

The overall investment and other activities of the Adviser and its affiliates may limit the investment opportunities for each Fund in certain markets where limitations are imposed by regulators upon the amount of investment by affiliated investors, in the aggregate or in individual issuers. From time to time, each Fund’s activities also may be restricted because of regulatory restrictions applicable to the Adviser and its affiliates and/or because of their internal policies. See Investment Advisory and Other Services – Other Roles and Relationships of Ameriprise Financial and its Affiliates – Certain Conflicts of Interest .

Fundamental and Non-Fundamental Investment Policies

Fundamental Investment Policies

Each Fund may not, as a matter of fundamental policy:

2.	Purchase or sell real estate, except each Fund may purchase securities of issuers which deal or invest in real estate and may purchase securities which are secured by real estate or interests in real estate;

Purchase any securities which would cause 25% or more of the value of its total assets at the time of purchase to be invested in the securities of one or more issuers conducting their principal business activities in the same industry, provided that: (i) there is no limitation with respect to obligations issued or guaranteed

by the U.S. Government, any state or territory of the United States, or any of their agencies, instrumentalities or political subdivisions; and (ii) notwithstanding this limitation or any other fundamental investment limitation, assets may be invested in the securities of one or more management investment companies to the extent permitted by the 1940 Act, the rules and regulations thereunder and any exemptive relief obtained by the Funds;

5.	Make loans, except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any exemptive relief obtained by the Funds;

6.	Borrow money or issue senior securities except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any exemptive relief obtained by the Funds; and

Except the Maryland Intermediate Municipal Bond Fund , Purchase securities (except securities issued or guaranteed by the U.S. Government, its agencies or instrumentalities) of any one issuer if, as a result, more than 5% of its total assets will be invested in the securities of such issuer or it would own more than 10% of the voting securities of such issuer, except that: (i) up to 25% of its total assets may be invested without regard to these limitations; and (ii) a Fund’s assets may be invested in the securities of one or more management investment companies to the extent permitted by the 1940 Act, the rules and regulations thereunder and any exemptive relief obtained by the Funds.

8.	Under normal circumstances,

•

California Intermediate Municipal Bond Fund , Georgia Intermediate Municipal Bond Fund , Maryland Intermediate Municipal Bond Fund , North Carolina Intermediate Municipal Bond Fund , South Carolina Intermediate Municipal Bond Fund and Virginia Intermediate Municipal Bond Fund , each will invest at least 80% of its assets in securities that pay interest exempt from federal income tax, other than the federal alternative minimum tax, and state individual income tax.

Non-Fundamental Investment Policies

2.	Each Fund may not invest more than 15% of its net assets in illiquid securities.

3.	The Funds may not sell securities short, except as permitted by the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief.

Maryland Intermediate Municipal Bond Fund may not purchase securities of any one issuer (other than U.S. Government Obligations and securities of other investment companies) if, immediately after such purchase, more than 25% of the value of the Fund’s total assets would be invested in the securities of one issuer, and with respect to 50% of the Fund’s total assets, more than 5% of its assets would be invested in the securities of one issuer.

Exemptive Orders

1.	Pursuant to an exemptive order dated October 5, 1993, all current and future Funds advised by the Adviser may, subject to certain conditions, pool their uninvested cash balances in one or more joint accounts and use

the daily balance of such accounts to enter into repurchase agreements, including the condition that such agreements have a maturity of not more than seven days.

Permissible Investments and Related Risks

Temporary Defensive Positions. A Fund may temporarily invest in money market instruments or hold cash. It may do so without limit, when the Adviser or a Fund’s subadviser, if applicable: (i) believes that the market conditions are not favorable for profitable investing; (ii) is unable to locate favorable investment opportunities or (iii) determines that a temporary defensive position is advisable or necessary in order to meet anticipated redemption requests, or for other reasons. While a Fund engages in such strategies, it may not achieve its investment objective.

Permissible Fund Investments

Investment Type

California
Intermediate
Municipal
Bond Fund

Georgia
Intermediate
Municipal
Bond Fund

Maryland
Intermediate
Municipal
Bond Fund

North
Carolina
Intermediate
Municipal
Bond Fund

South
Carolina
Intermediate
Municipal
Bond Fund

Virginia
Intermediate
Municipal
Bond Fund

Asset-Backed Securities

Bank Obligations (Domestic and Foreign)

Common Stock

Convertible Securities

Corporate Debt Securities

Derivatives

Index or Linked Securities (Structured Products)

Futures Contracts and Options on Futures Contracts

Stock Options and Stock Index Options

Swap Agreements

Dollar Rolls

Foreign Currency Transactions

Foreign Securities

Guaranteed Investment Contracts (Funding Agreements)

Illiquid Securities

Investments in Other Investment Companies

Low and Below Investment Grade Securities

Money Market Instruments

Mortgage-Backed Securities

Municipal Securities

Participation Interests

Preferred Stock

Private Placement and Other Restricted Securities

Real Estate Investment Trusts and Master Limited Partnerships

Repurchase Agreements

Reverse Repurchase Agreements

U.S. Government and Related Obligations

Variable- and Floating-Rate Obligations

Zero-Coupon, Pay-in-Kind and Step-Coupon Securities

Asset-Backed Securities

Declining or low interest rates may lead to a more rapid rate of repayment on the underlying assets, resulting in accelerated payments on asset-backed securities that then would be reinvested at a lesser rate of interest. Rising or high interest rates tend to lead to a slower rate of repayment on the underlying assets, resulting in slower than expected payments on asset-backed securities that can, in turn, lead to a decline in value. The impact of changing interest rates on the value of asset-backed securities may be difficult to predict and result in greater volatility. Holders of asset- backed securities generally have no recourse against the originator of the underlying assets in the event of a default on the underlying assets. Credit risk reflects the risk that a holder of asset-backed securities, backed by pools of receivables such as mortgage loans, may not receive all or part of its principal because the issuer, any credit enhancer and/or an underlying obligor has defaulted on its obligations. Credit risk is increased for asset-backed securities that are subordinated to another security (i.e., if the holder of an asset-backed security is entitled to receive payments only after payment obligations to holders of the other security are satisfied). The more deeply subordinated the security, the greater the credit risk associated with the security will be.

Bank Obligations (Domestic and Foreign)

maturities of less than two years and have interest rates that typically are pegged to the London Interbank Offered Rate or LIBOR. A time deposit can be either a savings account or CD that is an obligation of a financial institution for a fixed term. Typically, there are penalties for early withdrawals of time deposits. Promissory notes are written commitments of the maker to pay the payee a specified sum of money either on demand or at a fixed or determinable future date, with or without interest.

Common Stock

If a corporation is liquidated, the claims of secured and unsecured creditors and owners of debt securities and “preferred” stock take priority over the claims of those who own common stock.

larger competitors. Common stocks of these types of companies may have a higher potential for gains, but also may be subject to greater risk of loss.

Convertible Securities

Corporate Debt Securities

Corporate debt securities include fixed income securities issued by businesses to finance their operations. Notes, bonds, debentures and commercial paper are the most common types of corporate debt securities, with the primary difference being their interest rates, maturity dates and secured or unsecured status. Commercial paper has the shortest term and usually is unsecured. The broad category of corporate debt securities includes debt issued by domestic or foreign companies of all kinds, including those with small-, mid- and large-capitalizations. The category also includes bank loans, as well as assignments, participations and other interests in bank loans. Corporate debt securities may be rated investment grade or below investment grade and may be structured as fixed-, variable- or floating-rate obligations or as zero-coupon, pay-in-kind and step-coupon securities and may be privately placed or publicly offered. See Permissible Fund Investments – Variable- and Floating-Rate Obligations, Permissible Fund Investments – Zero-Coupon, Pay-in-Kind and Step-Coupon Securities and Permissible Fund Investments – Private Placement and Other Restricted Securities for more information.

Derivatives

General

A Fund may use derivatives for a variety of reasons, including, for example: (i) to enhance its return; (ii) to attempt to protect against possible changes in the market value of securities held in or to be purchased for its portfolio resulting from securities markets or currency exchange rate fluctuations (i.e., to hedge); (iii) to protect its unrealized gains reflected in the value of its portfolio securities; (iv) to facilitate the sale of such securities for investment purposes; (v) to reduce transaction costs; and/or (vi) to manage the effective maturity or duration of its portfolio.

Index or Linked Securities (Structured Products)

A Fund may also invest in so-called “inverse floaters” or “residual interest bonds” on which the interest rates vary inversely with a floating rate (which may be reset periodically by a dutch auction, a remarketing agent, or by reference to a short-term tax-exempt interest rate index). A Fund may purchase synthetically-created inverse floating rate bonds evidenced by custodial or trust receipts. Generally, income on inverse floating rate bonds will decrease when interest rates increase, and will increase when interest rates decrease. Such securities have the effect of providing a degree of investment leverage, since they may increase or decrease in value in response to changes, as an illustration, in market interest rates at a rate that is a multiple of the rate at which fixed-rate securities increase or decrease in response to such changes. As a result, the market values of such securities will generally be more volatile than the market values of fixed-rate securities. To seek to limit the volatility of these securities, a Fund may purchase inverse floating obligations that have shorter-term maturities or that contain limitations on the extent to which the interest rate may vary. Certain investments in such obligations may be illiquid. A Fund may invest in indexed and inverse securities for hedging purposes or to seek to increase returns. When used for hedging purposes, indexed and inverse securities involve correlation risk. Furthermore, where such a security includes a contingent liability, in the event of an adverse movement in the underlying index or interest rate, a Fund may be required to pay substantial additional margin to maintain the position.

Index-, Commodity-, Currency- and Equity-Linked Securities . “Index-linked” or “commodity-linked” notes are debt securities of companies that call for interest payments and/or payment at maturity in different terms than the typical note where the borrower agrees to make fixed interest payments and to pay a fixed sum at maturity. Principal and/or interest payments on an index-linked or commodity-linked note depend on the performance of one or more market indices, such as the S&P 500 ^® Index, a weighted index of commodity futures such as crude oil, gasoline and natural gas or the market prices of a particular commodity or basket of commodities. Equity-linked securities are short-term or intermediate term instruments having a value at maturity and /or interest rate determined by reference to the market prices of one or more equity securities. At maturity, the principal amount of an equity-linked debt security is often exchanged for common stock of the issuer or is payable in an amount based on the issuer’s common stock price at the time of maturity. Currency-linked debt securities are short-term or intermediate-term instruments having a value at maturity, and/or an interest rate, determined by reference to

one or more foreign currencies. Payment of principal or periodic interest may be calculated as a multiple of the movement of one currency against another currency, or against an index.

Futures Contracts and Options on Futures Contracts

maturities and investing in bonds with short maturities when interest rates are expected to increase, or conversely, selling bonds with short maturities and investing in bonds with long maturities when interest rates are expected to decline. However, because of the liquidity that is often available in the futures market, the protection is more likely to be achieved, perhaps at a lower cost and without changing the rate of interest being earned by a Fund, through using futures contracts.

Interest rate futures contracts are traded in an auction environment on the floors of several exchanges –principally, the Chicago Board of Trade, the Chicago Mercantile Exchange and the New York Futures Exchange. Each exchange guarantees performance under contract provisions through a clearing corporation, a nonprofit organization managed by the exchange membership. A public market exists in futures contracts covering various financial instruments including long-term U.S. Treasury Bonds and Notes; GNMA modified pass-through mortgage backed securities; three-month U.S. Treasury Bills; and ninety-day commercial paper. A Fund may also invest in exchange-traded Eurodollar contracts, which are interest rate futures on the forward level of LIBOR. These contracts are generally considered liquid securities and trade on the Chicago Mercantile Exchange. Such Eurodollar contracts are generally used to “lock-in” or hedge the future level of short-term rates. A Fund may trade in any interest rate futures contracts for which there exists a public market, including, without limitation, the foregoing instruments.

applicable margin deposits) have been deposited in a segregated account. A Fund will be required to deposit initial margin and maintenance margin with respect to put and call options on futures contracts written by it pursuant to brokers’ requirements similar to those described above.

limit for several consecutive trading days with little or no trading, thereby preventing prompt liquidation of futures positions and subjecting some futures traders to substantial losses.

Use by Tax-Exempt Funds of Interest Rate and U.S. Treasury Security Futures Contracts and Options . If a Fund invests in tax-exempt securities it may purchase and sell futures contracts and related options on interest rate and U.S. Treasury securities when, in the opinion of the Adviser, price movements in these security futures and related options will correlate closely with price movements in the tax-exempt securities which are the subject of the hedge. Interest rate and U.S. Treasury securities futures contracts require the seller to deliver, or the purchaser to take delivery of, the type of security called for in the contract at a specified date and price. Options on interest rate and U.S. Treasury security futures contracts give the purchaser the right in return for the premium paid to assume a position in a futures contract at the specified option exercise price at any time during the period of the option.

Stock Options and Stock Index Options

There is a key difference between stock options and stock index options in connection with their exercise. In the case of stock options, the underlying security, common stock, is delivered. However, upon the exercise of an index option, settlement does not occur by delivery of the securities comprising the index. The option holder who exercises the index option receives an amount of cash if the closing level of the stock index upon which the option is based is greater than (in the case of a call) or less than (in the case of a put) the exercise price of the option. This amount of cash is equal to the difference between the closing price of the stock index and the exercise price of the option expressed in dollars times a specified multiple. A stock index fluctuates with changes in the market value of the securities included in the index. For example, some stock index options are based on a

broad market index, such as the S&P 500 ^® Index or a narrower market index, such as the S&P 100 ^® Index. Indices may also be based on an industry or market segment.

the premium paid by a Fund as well as loss of the expected benefit of the transaction. Exchange-traded options generally have a continuous liquid market while dealer options more often may not. Consequently, a Fund can realize the value of a dealer option it has purchased only by exercising or reselling the option to the issuing dealer. Similarly, when a Fund writes a dealer option, a Fund can close out the option prior to its expiration only by entering into a closing purchase transaction with the dealer. While each Fund seeks to enter into dealer options only with dealers who will agree to and can enter into closing transactions with a Fund, no assurance exists that a Fund will at any time be able to liquidate a dealer option at a favorable price at any time prior to expiration. Unless a Fund, as a covered dealer call option writer, can effect a closing purchase transaction, it will not be able to liquidate securities (or other assets) used as cover until the option expires or is exercised. In the event of insolvency of the other party, a Fund may be unable to liquidate a dealer option. With respect to options written by a Fund, the inability to enter into a closing transaction may result in material losses to a Fund. For example, because a Fund must maintain a secured position with respect to any call option on a security it writes, a Fund may not sell the assets, which it has segregated to secure the position while it is obligated under the option. This requirement may impair a Fund’s ability to sell portfolio securities at a time when such sale might be advantageous.

A Fund’s obligation to sell an instrument subject to a call option written by it, or to purchase an instrument subject to a put option written by it, may be terminated prior to the expiration date of the option by a Fund’s execution of a closing purchase transaction, which is effected by purchasing on an exchange an offsetting option

of the same series (i.e., same underlying instrument, exercise price and expiration date) as the option previously written. A closing purchase transaction will ordinarily be effected in order to realize a profit on an outstanding option, to prevent an underlying instrument from being called, to permit the sale of the underlying instrument or to permit the writing of a new option containing different terms on such underlying instrument. A Fund realizes a profit or loss from a closing purchase transaction if the cost of the transaction (option premium plus transaction costs) is less or more than the premium received from writing the option. Because increases in the market price of a call option generally reflect increases in the market price of the security underlying the option, any loss resulting from a closing purchase transaction may be offset in whole or in part by unrealized appreciation of the underlying security.

Swap Agreements

Dollar Rolls

Foreign Currency Transactions

Foreign Securities

Foreign securities include debt, equity and derivative securities that the Adviser determines are “foreign” based on the consideration of an issuer’s domicile, its principal place of business, its primary stock exchange listing, the source of its revenue or other factors. Foreign securities may be structured as fixed-, variable- or floating-rate obligations or as zero-coupon, pay-in-kind and step-coupon securities and may be privately placed or publicly offered. See Permissible Fund Investments – Variable- and Floating-Rate Obligations, Permissible Fund Investments – Zero-Coupon, Pay-in-Kind and Step-Coupon Securities and Permissible Fund Investments – Private Placement and Other Restricted Securities for more information.

the costs of such facilities and the depositary of an unsponsored facility frequently is under no obligation to distribute interest holder communications received from the issuer of the deposited security or to pass through voting rights to the holders of such receipts in respect of the deposited securities. The issuers of unsponsored depositary receipts are not obligated to disclose material information in the United States, and, therefore, there may be limited information available regarding such issuers and/or limited correlation between available information and the market value of the depositary receipts.

Guaranteed Investment Contracts (Funding Agreements)

Illiquid Securities

Investments in Other Investment Companies

Except with respect to funds structured as funds-of-funds or so-called master/feeder funds, the 1940 Act generally requires that a fund limit its investments in another investment company or series thereof so that, as determined at the time a securities purchase is made: (i) no more than 5% of the value of its total assets will be invested in the securities of any one investment company; (ii) no more than 10% of the value of its total assets will be invested in the aggregate in securities of other investment companies; and (iii) no more than 3% of the outstanding voting stock of any one investment company or series thereof will be owned by a fund or by companies controlled by the fund. Such other investment companies may include ETFs, which are shares of publicly traded unit investment trusts, open-end funds or depositary receipts that seek to track the performance of specific indexes or companies in related industries.

Under the 1940 Act and rules and regulations thereunder, a Fund may purchase shares of affiliated funds, subject to certain conditions. Investing in affiliated funds may present certain actual or potential conflicts of interest. For more information about such actual and potential conflicts of interest, see Investment Advisory and Other Services – Other Roles and Relationships of Ameriprise Financial and its Affiliates - Certain Conflicts of Interest .

Low and Below Investment Grade Securities

Moody’s), that are below investment grade (e.g., lower than BBB by S&P and Fitch or Baa by Moody’s) or that are unrated but determined by the Adviser to be of comparable quality. These types of securities may be issued to fund corporate transactions or restructurings, such as leveraged buyouts, mergers, acquisitions, debt reclassifications or similar events, are more speculative in nature than securities with higher ratings and tend to be more sensitive to credit risk, particularly during a downturn in the economy. These types of securities generally are issued by unseasoned companies without long track records of sales and earnings, or by companies or municipalities that have questionable credit strength. Low and below investment grade securities and comparable unrated securities: (i) likely will have some quality and protective characteristics that, in the judgment of one or more NRSROs, are outweighed by large uncertainties or major risk exposures to adverse conditions; (ii) are speculative with respect to the issuer’s capacity to pay interest and repay principal in accordance with the terms of the obligation; and (iii) may have a less liquid secondary market, potentially making it difficult to value or sell such securities. Low and below investment grade securities may be structured as fixed-, variable- or floating-rate obligations or as zero-coupon, pay-in-kind and step-coupon securities and may be privately placed or publicly offered. See Permissible Fund Investments – Variable- and Floating-Rate Obligations, Permissible Fund Investments – Zero-Coupon, Pay-in-Kind and Step-Coupon Securities and Permissible Fund Investments – Private Placement and Other Restricted Securities for more information.

The risk of loss due to default is greater for low and below investment grade and comparable unrated securities than it is for higher rated securities because low and below investment grade securities and comparable unrated securities generally are unsecured and frequently are subordinated to more senior indebtedness. A Fund may incur additional expenses to the extent that it is required to seek recovery upon a default in the payment of principal or interest on its holdings of such securities. The existence of limited markets for lower-rated debt securities may diminish a Fund’s ability to: (i) obtain accurate market quotations for purposes of valuing such securities and calculating portfolio net asset value; and (ii) sell the securities at fair market value either to meet redemption requests or to respond to changes in the economy or in financial markets.

Money Market Instruments

agreements; (iv) obligations of the United States, foreign countries and supranational entities, and each of their subdivisions, agencies and instrumentalities; (v) certain corporate debt securities, such as commercial paper, short-term corporate obligations and extendible commercial notes; (vi) participation interests; and (vii) municipal securities. Money market instruments may be structured as fixed-, variable- or floating-rate obligations and may be privately placed or publicly offered. See Permissible Fund Investments – Variable- and Floating-Rate Obligations and Permissible Fund Investments – Private Placement and Other Restricted Securities for more information.

Mortgage-Backed Securities

Mortgage-backed securities may be issued or guaranteed by the GNMA (also known as Ginnie Mae), the FNMA (also known as Fannie Mae), or the FHLMC (also known as Freddie Mac), but also may be issued or guaranteed by other issuers, including private companies. GNMA is a government-owned corporation that is an agency of the U.S. Department of Housing and Urban Development. It guarantees, with the full faith and credit of the United States, full and timely payment of all monthly principal and interest on its mortgage-backed securities. Until recently, FNMA and FHLMC were government-sponsored corporations owned entirely by private stockholders. Both issue mortgage-related securities that contain guarantees as to timely payment of interest and principal but that are not backed by the full faith and credit of the U.S. Government. The value of the companies’ securities fell sharply in 2008 due to concerns that the firms did not have sufficient capital to offset losses. In mid-2008, the U.S. Treasury was authorized to increase the size of home loans that FNMA and FHLMC could purchase in certain residential areas and, until 2009, to lend FNMA and FHLMC emergency funds and to purchase the companies’ stock. More recently, in September 2008, the U.S. Treasury announced that FNMA and FHLMC had been placed in conservatorship by the Federal Housing Finance Agency (FHFA), a newly created independent regulator. In addition to placing the companies in conservatorship, the U.S. Treasury announced three additional steps that it intended to take with respect to FNMA and FHLMC. First, the U.S. Treasury has entered into “Preferred Stock Purchase Agreements” (PSPAs) under which, if the FHFA determines that FNMA’s or FHLMC’s liabilities have exceeded its assets under generally accepted accounting principles, the U.S. Treasury will contribute cash capital to the company in an amount equal to the difference between liabilities and assets. The PSPAs are designed to provide protection to the senior and subordinated debt and the mortgage-backed securities issued by FNMA and FHLMC. Second, the U.S. Treasury established a new secured lending credit facility that is available to FNMA and FHLMC until December 2009. Third, the U.S. Treasury initiated a

temporary program to purchase FNMA and FHLMC mortgage-backed securities, which is expected to continue until December 2009. No assurance can be given that the U.S. Treasury initiatives discussed above with respect to the debt and mortgage-backed securities issued by FNMA and FHLMC will be successful.

Municipal Securities

purpose public authorities. If the issuer of moral obligation securities is unable to meet its debt service obligations from current revenues, it may draw on a reserve fund, the restoration of which is a moral commitment but not a legal obligation of the governmental entity that created the special purpose public authority. Municipal securities may be structured as fixed-, variable- or floating-rate obligations or as zero-coupon, pay-in-kind and step-coupon securities and may be privately placed or publicly offered. See Permissible Fund Investments – Variable- and Floating-Rate Obligations, Permissible Fund Investments – Zero-Coupon, Pay-in-Kind and Step-Coupon Securities and Permissible Fund Investments – Private Placement and Other Restricted Securities for more information.

Master demand obligations are tax-exempt municipal obligations that provide for a periodic adjustment in the interest rate paid and permit daily changes in the amount borrowed. The interest on such obligations is, in the opinion of counsel for the borrower, excluded from gross income for federal income tax purposes (but not necessarily for alternative minimum tax purposes). Although there is no secondary market for master demand obligations, such obligations are considered by a Fund to be liquid because they are payable upon demand.

budget for, appropriate, and make the payments due under the lease obligation. However, certain lease obligations contain “non-appropriation” clauses that provide that the government has no obligation to make lease or installment purchase payments in future years unless money is appropriated for such purpose on a periodic basis. In the case of a “non-appropriation” lease, a Fund’s ability to recover under the lease in the event of non-appropriation or default likely will be limited to the repossession of the leased property in the event that foreclosure proves difficult.

There are particular considerations and risks relevant to investing in a portfolio of a single state’s municipal securities, such as the greater risk of the concentration of portfolio holdings.

The Fund ordinarily purchases municipal securities whose interest, in the opinion of bond counsel, is excluded from gross income for federal income tax purposes. The opinion of bond counsel may assert that such interest is not an item of tax preference for the purposes of the alternative minimum tax or is exempt from certain state or local taxes. There is no assurance that applicable taxing authorities will agree with this opinion. In the event, for example, that the IRS determines that an issuer does not comply with the relevant tax requirements, interest payments from a security could become federally taxable, possibly retroactively to the date the security was issued. As a shareholder of the Fund, you may be required to file an amended tax return as a result, reporting such income as taxable.

For more information about the economic conditions, legal matters and key risks associated with investments in certain states, see Appendix C.

Participation Interests

the payments made on the underlying debt obligations. The purchaser of a participation interest receives an undivided interest in the underlying debt obligations. The issuers of the underlying debt obligations make interest and principal payments to the intermediary, as an initial purchaser, which are passed through to purchasers in the secondary market, such as a Fund. Mortgage-backed securities are a common type of participation interest. Participation interests may be structured as fixed-, variable- or floating-rate obligations or as zero-coupon, pay-in-kind and step-coupon securities and may be privately placed or publicly offered. See Permissible Fund Investments – Variable- and Floating-Rate Obligations, Permissible Fund Investments – Zero-Coupon, Pay-in-Kind and Step-Coupon Securities and Permissible Fund Investments – Private Placement and Other Restricted Securities for more information.

Preferred Stock

In addition to reinvestment risk if interest rates fall, some specific risks with regard to APS include:

•

Failed auction: A breakdown in the auction process can occur; in the event that the process fails, the rate is reset at the maximum applicable rate, which is usually described in the prospectuses and typically is influenced by the issuer’s credit rating. In a failed auction, current shareholders generally are unable to sell some, or all, of the shares when the auction is completed. Typically, the liquidity for APS that have experienced a failed auction becomes very limited. If a failed auction were to occur, the shareholder generally would hold his or her shares until the next auction. Should there not be subsequent auctions that “cure” the failed process, the shareholder may: (1) hold the APS in anticipation of a refinancing by the issuer that would cause the APS to be called, or (2) hold securities either indefinitely or in anticipation of the development of a secondary market.

•

Early call risk: APS generally is redeemable at any time, usually upon notice, at the issuer’s option, at par plus accrued dividends.

Private Placement and Other Restricted Securities

Investing in private placement and other restricted securities is subject to certain risks. Private placements may be considered illiquid securities. Private placements typically are subject to restrictions on resale as a matter of contract or under federal securities laws. Because there may be relatively few potential purchasers for such securities, especially under adverse market or economic conditions or in the event of adverse changes in the financial condition of the issuer, a Fund could find it more difficult to sell such securities when it may be advisable to do so or it may be able to sell such securities only at prices lower than if such securities were more widely held. At times, it also may be more difficult to determine the fair value of such securities for purposes of computing a Fund’s net asset value due to the absence of a trading market.

Real Estate Investment Trusts and Master Limited Partnerships

provide its shareholders with income from the leasing of its properties and with capital gains from any sales of properties. A mortgage REIT generally specializes in lending money to owners of properties and passes through any interest income it may earn to its shareholders.

Repurchase Agreements

If a counterparty defaults, a Fund could realize a loss on the sale of the underlying security to the extent that the proceeds of the sale are less than the resale price provided in the repurchase agreement including interest. In the event that a counterparty fails to perform because it is insolvent or otherwise subject to insolvency proceedings against it, a Fund’s right to take possession of the underlying securities would be subject to applicable insolvency law and procedure, including an automatic stay (which would preclude immediate enforcement of the Fund’s rights) and exemptions thereto (which would permit the Fund to take possession of the underlying securities or to void a repurchase agreement altogether). Since it is possible that an exemption from the automatic stay would not be available, a Fund might be prevented from immediately enforcing its rights against the counterparty. Accordingly, if a counterparty becomes insolvent or otherwise subject to insolvency proceedings against it, a Fund may incur delays in or be prevented from liquidating the underlying securities and could experience losses, including the possible decline in value of the underlying securities during the period in which the Fund seeks to enforce its rights thereto, possible subnormal levels of income or lack of access to income during such time, as well as the costs incurred in enforcing the Fund’s rights. For example, if a Fund enters into a repurchase agreement with a broker that becomes insolvent, it is possible for the Securities Investor Protection Corporation (SIPC) to institute a liquidation proceeding in federal court against the broker counterparty which could lead to a foreclosure by SIPC of the underlying securities or SIPC may stay, or preclude, the Fund’s ability under contract to terminate the repurchase agreement.

Reverse Repurchase Agreements

U.S. Government and Related Obligations

Variable- and Floating-Rate Obligations

Variable- and floating-rate obligations provide for periodic adjustments in the interest rate and, under certain circumstances, varying principal amounts. Unlike a fixed interest rate, a variable, or floating, rate is one that rises and declines based on the movement of an underlying index of interest rates and may pay interest at rates that are adjusted periodically according to a specified formula. Asset-backed securities, bank obligations, convertible securities, corporate debt securities, foreign securities, low and below investment grade securities, mortgage-backed securities, municipal securities, participation interests, stripped securities, U.S. Government and related obligations and other types of debt instruments may be structured as variable- and floating-rate obligations.

Investing in variable- and floating-rate obligations is subject to certain risks. Variable- and floating-rate obligations may involve direct lending arrangements between the purchaser and the issuer and there may be no active secondary market, making it difficult to resell such obligations to a third party. Variable- and floating-rate obligations also may be subject to interest rate and credit risks. Changes in interest rates can affect the rate of return on such obligations. If an issuer of a variable- or floating-rate obligation defaults, a Fund could sustain a loss to the extent of such default.

Zero-Coupon, Pay-in-Kind and Step-Coupon Securities

Zero-coupon securities do not pay interest on a current basis but instead accrue interest over the life of the security. These securities include, among others, zero-coupon bonds, which either may be issued at a discount by a corporation or government entity or may be created by a brokerage firm when it strips the coupons from a bond or note and then sells the bond or note and the coupon separately. This technique is used frequently with U.S. Treasury bonds, and zero-coupon securities are marketed under such names as CATS (Certificate of Accrual on Treasury Securities), TIGERs (Treasury Investor Growth Receipts) or STRIPS (Separate Trading of Registered Interest and Principal of Securities). Zero-coupon bonds also are issued by municipalities. Buying a municipal zero-coupon bond frees its purchaser of the obligation to pay regular federal income tax on imputed interest, since the interest is exempt for regular federal income tax purposes. Zero-coupon certificates of deposit and zero-coupon mortgages are generally structured in the same fashion as zero-coupon bonds; the certificate of deposit holder or mortgage holder receives face value at maturity and no payments until then.

Borrowings

Each Fund has a fundamental policy with respect to borrowing that can be found under the heading About the Funds’ Investments – Fundamental and Non-Fundamental Investment Policies . Specifically, each Fund may not borrow money or issue senior securities except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any exemptive relief obtained by the Funds. In general, pursuant to the 1940 Act, a Fund may borrow money only from banks in an amount not exceeding 33 ¹ / 3 % of its total assets (including the amount borrowed) less liabilities (other than borrowings). Any borrowings that come to exceed this amount must be reduced within three days (not including Sundays and holidays) to the extent necessary to comply with the 33 ¹ / 3 % limitation.

Short Sales

A Fund may sometimes sell securities short when it owns an equal amount of such securities as those securities sold short. This is a technique known as selling short “against the box.” If a Fund makes a short sale “against the box,” it would not immediately deliver the securities sold and would not receive the proceeds from the sale. The seller is said to have a short position in the securities sold until it delivers the securities sold, at which time it receives the proceeds of the sale. To secure its obligation to deliver securities sold short, a Fund will deposit in escrow in a separate account with the custodian an equal amount of the securities sold short or securities convertible into or exchangeable for such securities. A Fund can close out its short position by purchasing and delivering an equal amount of the securities sold short, rather than by delivering securities already held by a Fund, because a Fund might want to continue to receive interest and dividend payments on securities in its portfolio that are convertible into the securities sold short.

the case where a Fund owns convertible securities, changes in the investment values or conversion premiums of such securities. Short sales may have adverse tax consequences to a Fund and its shareholders.

Lending Securities

and other institutional investors. Securities loans by a Fund are made pursuant to agreements that require that loans be secured continuously by collateral in cash. A Fund retains all or a portion of the income received on investment of cash collateral. A borrower will pay to a Fund an amount equal to any dividends or interest received on securities loaned, but the borrower typically will receive a portion of the income earned on investments of cash collateral. Although voting rights, or rights to consent, with respect to loaned securities pass to a borrower, a Fund retains the right to call the loans at any time on reasonable notice, and may do so in order to vote upon matters affecting, or to sell, the loaned securities.

A Fund typically invests the cash collateral it receives in connection with its securities lending program directly or indirectly in high quality, short-term investments. A Fund may invest some or all of such cash collateral in one or more pooled investment vehicles, including, among other vehicles, money market funds managed by the Fund’s securities lending agent or its affiliates. The securities lending agent shares in any income resulting from the investment of such cash collateral, and an affiliate of the securities lending agent receives asset-based fees for the management of such pooled investment vehicles, which may create a conflict of interest between the securities lending agent (or its affiliate) and a Fund with respect to the management of such cash collateral.

Portfolio Turnover

For each Fund’s portfolio turnover rate, see the Fees and Expenses of the Fund/Portfolio – Portfolio Turrnover section in the prospectuses for that Fund.

Disclosure of Portfolio Information

The Board has adopted policies and procedures with respect to the disclosure of the Columbia Funds’ portfolio holdings. These policies and procedures are designed to ensure that disclosure of information regarding the Columbia Funds’ portfolio securities is in the best interests of Columbia Fund shareholders and to address conflicts between the interests of Columbia Fund shareholders, on the one hand, and those of the Adviser, the Distributor or any affiliated person of a Columbia Fund, on the other. These policies and procedures provide that Columbia Funds portfolio holdings information generally may not be disclosed to any party prior to the earlier of: (i) the business day next following the posting of such information on the Columbia Funds’ website, if applicable, or (ii) the time a Columbia Fund discloses the information in a publicly available SEC filing required to include such information. Certain limited exceptions that have been approved consistent with the policies and procedures are described below. The Board is updated as needed regarding compliance with these policies and procedures. The policies and procedures prohibit the Adviser and the Columbia Funds’ other service providers from entering into any agreement to disclose Columbia Fund portfolio holdings information in exchange for any form of consideration. These policies and procedures apply to all categories of Columbia Funds and include some variations tailored to the different categories of Columbia Funds. Accordingly, some of the provisions described below do not apply to the Columbia Fund(s) covered by this SAI. The Adviser also has adopted policies and procedures to monitor for compliance with these portfolio holdings disclosure policies and procedures.

Public Disclosures

•

For small cap and specialty Columbia Funds and those Columbia Funds that are sub-advised by Marsico and Brandes, subadvisers to certain Columbia Funds, a complete list of portfolio holdings as of a month end is posted approximately 30 calendar days after such month-end.

•

For fixed-income funds, a complete list of portfolio holdings as of a calendar quarter-end is posted approximately 30 calendar days after such quarter-end.

•

For Columbia Funds that are money market funds, a complete list of portfolio holdings as of a month-end is posted approximately 5 business days after such month-end.

The Adviser may also disclose more current portfolio holdings information as of specified dates on the Columbia Funds’ website.

The scope of the information that is made available on the Columbia Funds’ website pursuant to the Columbia Funds policies relating to a Columbia Fund’s portfolio may change from time to time without prior notice.

The Columbia Funds, the Adviser and their affiliates may include portfolio holdings information that already has been made public through a website posting or SEC filing in marketing literature and other communications to shareholders, advisors or other parties, provided that the information is disclosed no earlier than the business day after the date the information is disclosed publicly on the Columbia Funds’ website or no earlier than the time a Columbia Fund files such information in a publicly available SEC filing required to include such information.

Other Disclosures

In addition, the Columbia Funds periodically disclose their portfolio information on a confidential basis to various service providers that require such information to assist the Columbia Funds with their day-to-day business affairs. In addition to the Adviser and its affiliates, these service providers include each Columbia Fund’s subadviser(s) (if any), the Columbia Funds’ custodian, sub-custodian independent registered public accounting firm, legal counsel, financial printers, proxy solicitor and proxy voting service provider, as well as ratings agencies that maintain ratings on certain Columbia Funds. These service providers are required to keep such information confidential, and are prohibited from trading based on the information or otherwise using the information except as necessary in providing services to the Columbia Funds. The Columbia Funds also may disclose portfolio holdings information to broker/dealers and certain other entities in connection with potential transactions and management of the Columbia Funds, provided that reasonable precautions, including limitations on the scope of the portfolio holdings information disclosed, are taken to avoid any potential misuse of the disclosed information.

Ongoing Portfolio Holdings Disclosure Arrangements


IDENTITY OF RECIPIENT	COMPENSATION/ CONSIDERATION RECEIVED	CONDITIONS/RESTRICTIONS ON USE OF INFORMATION	FREQUENCY OF DISCLOSURE
Standard & Poor’s	None	Use to maintain ratings for certain money market funds.	Weekly

InvestorTools, Inc.	None	Access granted solely for the purpose of testing back office conversion of trading systems.	Real time

ING Insurance Company	None	Access granted for specific Columbia Funds for ING’s creation of client/shareholder materials. ING may not distribute materials until the holdings information is made public.	Quarterly

Glass-Lewis & Co.	None	Access in connection with testing the firm’s proxy services.	Daily

CMS Bondedge	None	Access when assisting in resolving technical difficulties with application used by the Adviser’s Fixed Income Portfolio Management team as an analytical and trading tool.	Ad hoc


IDENTITY OF RECIPIENT	COMPENSATION/ CONSIDERATION RECEIVED	CONDITIONS/RESTRICTIONS ON USE OF INFORMATION	FREQUENCY OF DISCLOSURE
Linedata Services, Inc.	None	Access when assisting in resolving technical difficulties with the software for the LongView Trade Order Management System.	Ad hoc

JP Morgan	None	Access to provide the Adviser’s High Yield portfolio management team with peer group analysis reports for purposes of analyzing the portfolio.	Monthly

Malaspina Communications	None	Use to facilitate writing, publishing and mailing Columbia Fund shareholder reports and communications including shareholder letters and management’s discussion of Columbia Fund performance.	Quarterly

Evare LLP	None	Use for standardizing and reformatting data according to the Adviser’s specifications for use in the reconciliation process.	Daily

FactSet Research Systems, Inc.	None	Use for provision of quantitative analytics, charting and fundamental data to the Adviser, and Marsico, sub-adviser to certain Columbia Funds.	Daily

RR Donnelley/WE Andrews	None	Access as printers for the Columbia Funds’ prospectuses, supplements, SAIs, fact sheets and brochures.	Monthly

Merrill Corporation	None	Use to provide fulfillment of the Columbia Funds’ prospectuses, supplements, SAIs and sales materials.	Monthly

Citigroup	None	Access when assisting in resolving technical difficulties with Yield Book, an analytic software program that the Adviser uses to perform ongoing risk analysis and management of certain fixed income Columbia Funds and fixed income separately managed accounts.	Daily


IDENTITY OF RECIPIENT	COMPENSATION/ CONSIDERATION RECEIVED	CONDITIONS/RESTRICTIONS ON USE OF INFORMATION	FREQUENCY OF DISCLOSURE
Institutional Shareholder Services (ISS)	None	Proxy voting administration and research on proxy matters utilized by MacKay Shields LLC, subadviser to certain Columbia Funds.	Daily

Cogent Consulting LLC	None	Utilized by Marsico, sub-adviser for certain Columbia Funds, to facilitate the evaluation of commission rates and to provide flexible commission reporting.	Daily

Moody’s	None	Ongoing portfolio surveillance for ratings it maintains on certain money market funds.	Monthly

Kynex	None	Use to provide portfolio attribution reports.	Daily

Bowne & Co.	None	Use for printing of the following materials: prospectuses, supplements and SAIs.	Monthly/quarterly

Bloomberg	None	Use for portfolio analytics.	Daily

Barclays Point	None	Use for analytics including risk and attribution assessment.	Daily

Broadridge Financial Solutions, Inc.	None	Proxy voting and research utilized by Marsico, subadviser to certain Columbia Funds.	Daily

Investment Technology Group, Inc. (ITG, formerly known as Macgregor)	None	Order management system utilized by Marsico, subadviser to certain Columbia Funds that stores trading data and is used for trading and compliance purposes.	Ad hoc

Advent/AXP	None	Portfolio accounting system utilized by Marsico, subadviser to certain Columbia Funds, for both portfolio accounting and internal recordkeeping purposes.	Ad hoc

Investment Technology Group, Inc. (ITG, formerly known as Plexus Group)	None	Evaluation and assessment of trading activity, execution and practices by the Adviser.	Five days after quarter-end

BANA and State Street	None	Credit analysis performed by lenders.	Ad hoc


IDENTITY OF RECIPIENT	COMPENSATION/ CONSIDERATION RECEIVED	CONDITIONS/RESTRICTIONS ON USE OF INFORMATION	FREQUENCY OF DISCLOSURE
State Street	None	Use to provide custodian services.	Real time

Lipper	None	Use to create metrics for board and executive management reporting, product and marketing analysis, and fund performance.	Daily

Morningstar, Inc.	None	Use for independent research and ranking of Columbia Funds.	Daily

INVESTMENT ADVISORY AND OTHER SERVICES

The Adviser and Investment Advisory Services

Services Provided

Advisory Fee Rates and Fees Paid

The Funds pay the Adviser an annual fee for its investment advisory services, as set forth in the Investment Management Services Agreement, and as shown in the section entitled Fees and Expenses of the Fund – Annual Fund Operating Expenses in each Fund’s prospectuses. The fee is calculated as a percentage of the average daily net assets of each Fund and is paid monthly. The Adviser also may pay amounts from its own assets to the Distributor and/or to selling and/or servicing agents for services they provide.

The Adviser receives a monthly investment advisory fee based on each Fund’s average daily net assets at the following annual rates:


Fund	First $500 million		$500 million to $1 billion		$1 billion to $1.5 billion		$1.5 billion to $3 billion		$3 billion to $6 billion		Over $6 billion
Columbia California Intermediate Municipal Bond Fund	0.40	%	0.35	%	0.32	%	0.29	%	0.28	%	0.27	%
Columbia Georgia Intermediate Municipal Bond Fund	0.40	%	0.35	%	0.32	%	0.29	%	0.28	%	0.27	%
Columbia Maryland Intermediate Municipal Bond Fund	0.40	%	0.35	%	0.32	%	0.29	%	0.28	%	0.27	%
Columbia North Carolina Intermediate Municipal Bond Fund	0.40	%	0.35	%	0.32	%	0.29	%	0.28	%	0.27	%
Columbia South Carolina Intermediate Municipal Bond Fund	0.40	%	0.35	%	0.32	%	0.29	%	0.28	%	0.27	%
Columbia Virginia Intermediate Municipal Bond Fund	0.40	%	0.35	%	0.32	%	0.29	%	0.28	%	0.27	%

Advisory Fees Paid by the Funds


Fund	Fiscal Year Ended March 31, 2010	Fiscal Year Ended March 31, 2009		Fiscal Year Ended March 31, 2008
California Intermediate Municipal Bond Fund
Advisory Fee Paid to the Previous Adviser		$	895,804	$	628,029
Amount Waived by the Previous Adviser		$	299,298		—
Amount Reimbursed by the Previous Adviser			—	$	245,824

Georgia Intermediate Municipal Bond Fund
Advisory Fee Paid to the Previous Adviser		$	508,291	$	483,879
Amount Waived by the Previous Adviser		$	212,433		—
Amount Reimbursed by the Previous Adviser			—	$	246,888

Maryland Intermediate Municipal Bond Fund
Advisory Fee Paid to the Previous Adviser		$	637,768	$	665,252
Amount Waived by the Previous Adviser			—		—
Amount Reimbursed by the Previous Adviser		$	239,429	$	267,402

North Carolina Intermediate Municipal Bond Fund
Advisory Fee Paid to the Previous Adviser		$	743,468	$	716,191
Amount Waived by the Previous Adviser			—		—
Amount Reimbursed by the Previous Adviser		$	259,156	$	293,196

South Carolina Intermediate Municipal Bond Fund
Advisory Fee Paid to the Previous Adviser		$	831,600	$	735,156
Amount Waived by the Previous Adviser			—		—
Amount Reimbursed by the Previous Adviser		$	267,234	$	273,304

Virginia Intermediate Municipal Bond Fund
Advisory Fee Paid to the Previous Adviser		$	1,321,628	$	1,314,492
Amount Waived by the Previous Adviser			—		—
Amount Reimbursed by the Previous Adviser		$	367,033	$	386,045

Portfolio Manager(s)

The following provides additional information about the portfolio manager(s) of the Adviser who are responsible for making the day-to-day investment decisions for the Funds. As described in the Management of the Fund – Primary Service Providers section of each Fund’s prospectuses, the portfolio manager(s) of the Adviser who are responsible for the Funds are:

Portfolio Manager(s) of the Adviser


Portfolio Manager		Fund
James D’Arcy		California Intermediate Municipal Bond Fund
James D’Arcy		Georgia Intermediate Municipal Bond Fund
James D’Arcy		Maryland Intermediate Municipal Bond Fund
James D’Arcy		North Carolina Intermediate Municipal Bond Fund
James D’Arcy		South Carolina Intermediate Municipal Bond Fund
James D’Arcy		Virginia Intermediate Municipal Bond Fund

Compensation of Legacy Columbia Management Advisors, LLC Portfolio Managers

This section describes the compensation structure of the portfolio managers who were associates of the Previous Adviser prior to May 1, 2010.

Performance Benchmarks


Portfolio Manager	Fund(s)	Primary Benchmark(s)	Peer Group
James D’Arcy	California Intermediate Municipal Bond Fund	Barclays Capital 3-15 Year Blend Municipal Bond Index	Lipper California Intermediate Municipal Debt Funds Classification

James D’Arcy	Georgia Intermediate Municipal Bond Fund	Barclays Capital 3-15 Year Blend Municipal Bond Index	Lipper Other States Intermediate Municipal Debt Funds Classification

James D’Arcy	Maryland Intermediate Municipal Bond Fund	Barclays Capital 3-15 Year Blend Municipal Bond Index	Lipper Other States Intermediate Municipal Debt Funds Classification


Portfolio Manager	Fund(s)	Primary Benchmark(s)	Peer Group
James D’Arcy	North Carolina Intermediate Municipal Bond Fund	Barclays Capital 3-15 Year Blend Municipal Bond Index	Lipper Other States Intermediate Municipal Debt Funds Classification

James D’Arcy	South Carolina Intermediate Municipal Bond Fund	Barclays Capital 3-15 Year Blend Municipal Bond Index	Lipper Other States Intermediate Municipal Debt Funds Classification

James D’Arcy	Virginia Intermediate Municipal Bond Fund	Barclays Capital 3-15 Year Blend Municipal Bond Index	Lipper Other States Intermediate Municipal Debt Funds Classification

Other Accounts

The following table shows the number and assets of other investment accounts (or portions of investment accounts) that the portfolio manager(s) of the Adviser managed, as of March 31, 2010.

Other Accounts Managed by the Portfolio Manager(s)

Portfolio Manager

Other SEC-registered open-end
and closed-end funds

Other pooled
investment vehicles

Other accounts

Number of
accounts

Assets

Number of
accounts

Assets

Number of
accounts

Assets

James D’Arcy ^(a)

James D’Arcy ^(b)

James D’Arcy ^(c)

James D’Arcy ^(d)

James D’Arcy ^(e)

James D’Arcy ^(f)

^(a)	“Other SEC-registered open-end and closed-end funds” represents funds other than Georgia Intermediate Municipal Bond Fund.

^(b)	“Other SEC-registered open-end and closed-end funds” represents funds other than Virginia Intermediate Municipal Bond Fund.

^(c)	“Other SEC-registered open-end and closed-end funds” represents funds other than North Carolina Intermediate Municipal Bond Fund.

^(d)	“Other SEC-registered open-end and closed-end funds” represents funds other than South Carolina Intermediate Municipal Bond Fund.

^(e)	“Other SEC-registered open-end and closed-end funds” represents funds other than California Intermediate Municipal Bond Fund.

^(f)	“Other SEC-registered open-end and closed-end funds” represents funds other than Maryland Intermediate Municipal Bond Fund.

The following table shows the number and assets of the above accounts (or portions of such accounts) for which the advisory fee is based on performance, as of March 31, 2010.

Other Accounts Managed by the Portfolio Manager(s) for which the Advisory Fee is Based on Performance

Portfolio Manager

Other SEC-registered open-end
and closed-end funds

Other pooled
investment vehicles

Other accounts

Number of
accounts

Assets

Number of
accounts

Assets

Number of
accounts

Assets

James D’Arcy ^(a)

—

James D’Arcy ^(b)

—

James D’Arcy ^(c)

—

James D’Arcy ^(d)

—

James D’Arcy ^(e)

—

James D’Arcy ^(f)

—

^(a)	“Other SEC-registered open-end and closed-end funds” represents funds other than Georgia Intermediate Municipal Bond Fund.

^(b)	“Other SEC-registered open-end and closed-end funds” represents funds other than Virginia Intermediate Municipal Bond Fund.

^(c)	“Other SEC-registered open-end and closed-end funds” represents funds other than North Carolina Intermediate Municipal Bond Fund.

^(d)	“Other SEC-registered open-end and closed-end funds” represents funds other than South Carolina Intermediate Municipal Bond Fund.

^(e)	“Other SEC-registered open-end and closed-end funds” represents funds other than California Intermediate Municipal Bond Fund.

^(f)	“Other SEC-registered open-end and closed-end funds” represents funds other than Maryland Intermediate Municipal Bond Fund.

Ownership of Securities

Portfolio Manager Ownership of the Funds as of March 31, 2010


Portfolio Manager	Fund	Dollar Range of Equity Securities in the Fund Beneficially Owned
James D’Arcy	Georgia Intermediate Municipal Bond Fund
James D’Arcy	Virginia Intermediate Municipal Bond Fund
James D’Arcy	North Carolina Intermediate Municipal Bond Fund
James D’Arcy	South Carolina Intermediate Municipal Bond Fund
James D’Arcy	California Intermediate Municipal Bond Fund
James D’Arcy	Maryland Intermediate Municipal Bond Fund

The Adviser’s Portfolio Managers and Potential Conflicts of Interest

The Administrator

Columbia Management Investment Advisers, LLC (which is also the Adviser) serves as Administrator of the Funds.

Services Provided

Administration Fee Rates and Fees Paid

The following chart shows the administration fees paid to the Previous Administrator for the three most recently completed fiscal years.

Administration Fees Paid by the Funds


Fund	Fiscal Year Ended March 31, 2010	Fiscal Year Ended March 31, 2009		Fiscal Year Ended March 31, 2008
California Intermediate Municipal Bond Fund
Administration Fee Paid to the Previous Administrator		$	264,344	$	163,661
Amount Waived/Reimbursed by the Previous Administrator			—		—

Georgia Intermediate Municipal Bond Fund
Administration Fee Paid to the Previous Administrator		$	133,545	$	115,028
Amount Waived/Reimbursed by the Previous Administrator			—		—

Maryland Intermediate Municipal Bond Fund
Administration Fee Paid to the Previous Administrator		$	177,259	$	176,246
Amount Waived/Reimbursed by the Previous Administrator			—		—

North Carolina Intermediate Municipal Bond Fund
Administration Fee Paid to the Previous Administrator		$	212,808	$	193,432
Amount Waived/Reimbursed by the Previous Administrator			—		—

South Carolina Intermediate Municipal Bond Fund
Administration Fee Paid to the Previous Administrator		$	242,696	$	199,829
Amount Waived/Reimbursed by the Previous Administrator			—		—


Fund	Fiscal Year Ended March 31, 2010	Fiscal Year Ended March 31, 2009		Fiscal Year Ended March 31, 2008
Virginia Intermediate Municipal Bond Fund
Administration Fee Paid to the Previous Administrator		$	408,177	$	395,351
Amount Waived/Reimbursed by the Previous Administrator			—		—

Pricing and Bookkeeping Services

Services Provided

Effective December 15, 2006, the Trust entered into a Financial Reporting Services Agreement with State Street and the Previous Adviser (the Financial Reporting Services Agreement) pursuant to which State Street provides financial reporting services to the Funds. Also effective December 15, 2006, the Trust entered into an Accounting Services Agreement with State Street and the Previous Adviser (collectively with the Financial Reporting Services Agreement, the State Street Agreements) pursuant to which State Street provides accounting services to the Funds. Effective May 1, 2010, the State Street Agreements were amended to, among other things, assign and delegate the Previous Adviser’s rights and obligations under the State Street Agreements to the Administrator. Under the State Street Agreements, the Funds pay State Street an annual fee of $38,000 paid monthly plus an additional monthly fee based on an annualized percentage rate of average daily net assets of a Fund for the month. The aggregate fee for a Fund during any year shall not exceed $140,000 annually (exclusive of out-of-pocket expenses and charges). The Funds also reimburse State Street for certain out-of-pocket expenses and charges.

Pricing and Bookkeeping Fees Paid

Pricing and Bookkeeping Fees Paid by the Funds


Fund	Fiscal Year Ended March 31, 2010	Fiscal Year Ended March 31, 2009		Fiscal Year Ended March 31, 2008
California Intermediate Municipal Bond Fund		$	93,328	$	82,942
Amount Paid to the Previous Adviser			—	$	10,280
Amount Paid to State Street		$	93,328	$	72,662

Georgia Intermediate Municipal Bond Fund		$	66,874	$	74,426
Amount Paid to the Previous Adviser			—	$	10,280
Amount Paid to State Street		$	66,874	$	64,146

Maryland Intermediate Municipal Bond Fund		$	73,866	$	83,948
Amount Paid to the Previous Adviser			—	$	10,280
Amount Paid to State Street		$	73,866	$	73,668

North Carolina Intermediate Municipal Bond Fund		$	77,582	$	86,956
Amount Paid to the Previous Adviser			—	$	10,280
Amount Paid to State Street		$	77,582	$	76,676

South Carolina Intermediate Municipal Bond Fund		$	81,703	$	84,427
Amount Paid to the Previous Adviser			—	$	10,280
Amount Paid to State Street		$	81,703	$	74,147

Virginia Intermediate Municipal Bond Fund		$	105,618	$	113,544
Amount Paid to the Previous Adviser			—	$	10,280
Amount Paid to State Street		$	105,618	$	103,264

The Principal Underwriter/Distributor

Distribution Obligations

Underwriting Commissions

Underwriting Commissions Paid by the Funds and Retained by the Distributor


Fund	Fiscal Period Ended March 31, 2010	Fiscal Period Ended March 31, 2009		Fiscal Period Ended March 31, 2008
California Intermediate Municipal Bond Fund
Amount Paid
Class A shares		$	13,086	$	1,585
Amount Retained
Class A shares		$	21,316	$	162
Class B shares		$	1,377	$	540
Class C shares		$	406	$	0

Georgia Intermediate Municipal Bond Fund
Amount Paid
Class A shares		$	4,631	$	7,927
Amount Retained
Class A shares		$	454	$	839
Class B shares		$	0	$	2,301
Class C shares		$	0	$	0

Maryland Intermediate Municipal Bond Fund
Amount Paid
Class A shares		$	31,838	$	11,083
Amount Retained
Class A shares		$	3,179	$	1,176
Class B shares		$	283	$	654
Class C shares		$	0	$	0

North Carolina Intermediate Municipal Bond Fund
Amount Paid
Class A shares		$	21,324	$	6,097
Amount Retained
Class A shares		$	2,537	$	669
Class B shares		$	229	$	2,893
Class C shares		$	0	$	263

South Carolina Intermediate Municipal Bond Fund
Amount Paid
Class A shares		$	18,959	$	4,052
Amount Retained
Class A shares		$	7,258	$	345
Class B shares		$	0	$	1,134
Class C shares		$	141	$	1,210

Virginia Intermediate Municipal Bond Fund
Amount Paid
Class A shares		$	22,633	$	21,118
Amount Retained
Class A shares		$	2,300	$	2,173
Class B shares		$	97	$	1,746
Class C shares		$	947	$	21

Other Roles and Relationships of Ameriprise Financial and its Affiliates – Certain Conflicts of Interest

accounts. As a result, the performance of a Fund may differ from the performance of other funds or accounts advised/managed by the Adviser or other Ameriprise Financial affiliates. Similarly, a position taken by Ameriprise Financial and its affiliates, including the Adviser, on behalf of other funds or accounts may be contrary to a position taken on behalf of a Fund. Moreover, Ameriprise Financial and its affiliates, including the Adviser, may take a position on behalf of other advised/managed funds and accounts, or for their own proprietary accounts, that is adverse to companies or other issuers in which a Fund is invested. For example, a Fund may hold equity securities of a company while another advised/managed fund or account may hold debt securities of the same company. If the portfolio company were to experience financial difficulties, it might be in the best interest of the Fund for the company to reorganize while the interests of the other advised/managed fund or account might be better served by the liquidation of the company. This type of conflict of interest could arise as the result of circumstances that cannot be generally foreseen within the broad range of investment advisory/management activities in which Ameriprise Financial and its affiliates engage.

Sharing of Information among Advised/Managed Accounts

Soft Dollar Benefits

Services Provided to Other Advised/Managed Accounts

Proxy Voting

Certain Trading Activities

Affiliate Transactions

Investment Limitations Arising from Ameriprise Financial Activities

Actual and Potential Conflicts of Interest Related to Ameriprise Financial and its Affiliates’ Non-Advisory Relationships with Clients and Customers other than the Funds

Actual and Potential Conflicts of Interest Related to Ameriprise Financial Affiliates’ Marketing and Use of the Columbia Funds as Investment Options

Ameriprise Financial and its affiliates, including the Adviser, may make payments to their affiliates in connection with the promotion and sale of the Funds’ shares, in addition to the sales-related and other compensation that these parties may receive from the Funds. As a general matter, personnel of Ameriprise Financial and its affiliates do not receive compensation in connection with their sales or use of the Funds that is greater than that paid in connection with their sales of other comparable products and services. Nonetheless, because the compensation that the Adviser and other affiliates of Ameriprise Financial may receive for providing services to the Funds is generally based on the Funds’ assets under management and those assets will grow as shares of the Funds are sold, potential conflicts of interest may exist. See Brokerage Allocation and Other Practices – Additional Financial Intermediary Payments for more information.

Other Services Provided

The Transfer Agent

The Transfer Agent retains BFDS/DST, 2 Heritage Drive, North Quincy, MA 02171 as the Funds’ sub-transfer agent. BFDS/DST assists the Transfer Agent in carrying out its duties.

The Custodian

Independent Registered Public Accounting Firm

The Reports of Independent Registered Public Accounting Firm and the audited financial statements included in the Annual Report to Shareholders of the Funds dated March 31, 2010 are incorporated herein by reference. No other parts of the annual report or semi-annual report to shareholders are incorporated by reference herein. The financial statements incorporated by reference into the prospectuses and this SAI have been so incorporated in reliance upon the report of the Funds’ independent registered public accounting firm, given on its authority as an expert in auditing and accounting.

Counsel

Goodwin Procter LLP serves as legal counsel to the Trust. Its address is 901 New York Avenue, N.W., Washington D.C. 20001.

Distribution and Servicing Plans

The Trust has adopted a Rule 12b-1, or distribution plan, for Class A shares, Class B shares and Class C shares of the Funds that offer those classes. See Capital Stock and Other Securities for information about which Funds offer which classes of shares. The Funds no longer accept investments from new or existing investors in Class B Shares, except for certain limited transactions from existing investors in Class B shares. See the prospectus for Class B shares of the Funds for details.

The annual rates in effect and plan limits, as a percentage of average daily net assets are as follows:


	Current Rate		Plan Limit
Class A Combined Distribution and Shareholder Servicing Plan	0.25	%	0.25	%
Class B and Class C Shareholder Servicing Plans	0.25	%	0.25	%
Class B and Class C Distribution Plans	0.75	%	0.75	%

Expenses incurred by the Distributor pursuant to a Distribution Plan in any given year may exceed the sum of the fees received under the Distribution Plan. Any such excess may be recovered by the Distributor in future years so long as the Distribution Plan is in effect. If the Distribution Plan were terminated or not continued, a Fund would not be contractually obligated to pay the Distributor for any expenses not previously reimbursed by the Fund. There were no unreimbursed expenses incurred under any of the Distribution Plans in the previous fiscal year to be carried over to the current fiscal year.

Distribution and Service Fees Paid by the Funds for the Fiscal Year Ended March 31, 2010


Fund	Class A Shares	Class B Shares	Class C Shares
California Intermediate Municipal Bond Fund
Combined Shareholder Servicing and Distribution Fee		—	—
Distribution Fee	—
Service Fee	—

Georgia Intermediate Municipal Bond Fund
Combined Shareholder Servicing and Distribution Fee		—	—
Distribution Fee	—
Service Fee	—

Maryland Intermediate Municipal Bond Fund
Combined Shareholder Servicing and Distribution Fee		—	—
Distribution Fee	—
Service Fee	—

North Carolina Intermediate Municipal Bond Fund
Combined Shareholder Servicing and Distribution Fee		—	—
Distribution Fee	—
Service Fee	—

South Carolina Intermediate Municipal Bond Fund
Combined Shareholder Servicing and Distribution Fee		—	—
Distribution Fee	—
Service Fee	—

Virginia Intermediate Municipal Bond Fund
Combined Shareholder Servicing and Distribution Fee		—	—
Distribution Fee	—
Service Fee	—

Expense Limitations

The Adviser has voluntarily agreed to reimburse a portion of each Fund’s expenses so that the Fund’s ordinary operating expenses (excluding any distribution and service fees, brokerage commissions, interest, taxes and extraordinary expenses, but including custodian charges relating to overdrafts, if any), after giving effect to any balance credits from the Fund’s custodian, do not exceed the following percentages:


Fund		Expenses Exceeding:
California Intermediate Municipal Bond Fund ^*		0.55% of average daily net assets
Georgia Intermediate Municipal Bond Fund ^*		0.55% of average daily net assets
Maryland Intermediate Municipal Bond Fund ^*		0.55% of average daily net assets
North Carolina Intermediate Municipal Bond Fund ^*		0.55% of average daily net assets
South Carolina Intermediate Municipal Bond Fund ^*		0.55% of average daily net assets
Virginia Intermediate Municipal Bond Fund ^*		0.55% of average daily net assets

*	The Adviser is entitled to recover from the Fund any fees waived or expenses reimbursed for a three year period following the date of such waiver or reimbursement if such recovery does not cause the Fund’s expenses to exceed the expense limitations in effect at the time of recovery.

Codes of Ethics

The Funds, the Adviser and the Distributor have adopted Codes of Ethics pursuant to the requirements of the 1940 Act, including Rule 17j-1 under the 1940 Act. These Codes of Ethics permit personnel subject to the Codes of Ethics to invest in securities, including securities that may be bought or held by the Funds. These Codes of Ethics are included as exhibits to Part C of the Funds’ registration statement. These Codes of Ethics can be reviewed and copied at the SEC’s Public Reference Room and may be obtained by calling the SEC at 202.551.8090; they also are available on the SEC’s website at www.sec.gov, and may be obtained, after paying a duplicating fee, by electronic request to publicinfo@sec.gov or by writing to the SEC’s Public Reference Section, Washington, D.C. 20549-1520.

Proxy Voting Policies and Procedures

The Funds have delegated to the Adviser or, as applicable, a sub-adviser, the responsibility to vote proxies relating to portfolio securities held by the Funds. In deciding to delegate this responsibility to the Adviser, the Board reviewed and approved the policies and procedures adopted by the Adviser and, as applicable, a sub-adviser. These included the procedures that the Adviser follows when a vote presents a conflict between the interests of the Funds and their shareholders and the Adviser (or subadviser), its affiliates, its other clients or other persons.

members are required to disclose to the Committee any relationship with a party making a proposal or other matter known to the person that would create a potential conflict of interest.

Information regarding how the Columbia Funds (except certain Columbia Funds that do not invest in voting securities) voted proxies relating to portfolio securities during the most recent twelve month period ended June 30 will be available by August 31 of this year free of charge: (i) through the Columbia Funds’ website at www.columbiafunds.com and (ii) on the SEC’s website at www.sec.gov. For a copy of the Adviser’s policies and procedures that are used to determine how to vote proxies relating to portfolio securities held by the Columbia Funds, see Appendix B to this SAI.

Expenses Paid by Third Parties

The Funds pay or cause to be paid all other expenses of the Funds, including, without limitation: the fees of the Adviser, the Distributor and the Administrator; the charges and expenses of any registrar, any custodian or depository appointed by the Funds for the safekeeping of their cash, Fund securities and other property, and any stock transfer, dividend or accounting agent or agents appointed by the Funds; brokerage commissions chargeable to the Funds in connection with Fund securities transactions to which the Funds are a party; all taxes, including securities issuance and transfer taxes; corporate fees payable by the Funds to federal, state or other governmental agencies; all costs and expenses in connection with the registration and maintenance of registration of the Funds’ shares with the SEC and various states and other jurisdictions (including filing fees, legal fees and disbursements of counsel); the costs and expenses of preparing and typesetting prospectuses and statements of additional information of the Funds (including supplements thereto) and periodic reports and of printing and distributing such prospectuses and statements of additional information (including supplements thereto) to the Funds’ shareholders; all expenses of shareholders’ and Trustee meetings and of preparing, printing and mailing proxy statements and reports to shareholders; fees and travel expenses of directors or director members of any advisory board or committee; all expenses incident to the payment of any distribution, whether in shares or cash; charges and expenses of any outside service used for pricing of the Funds’ shares; fees and expenses of legal counsel and of independent auditors in connection with any matter relating to the Funds; membership dues of industry associations; interest payable on Fund borrowings; postage and long-distance telephone charges; insurance premiums on property or personnel (including officers and directors) of the Funds which inure to their benefit; extraordinary expenses (including, but not limited to, legal claims and liabilities and litigation costs and any indemnification related thereto); and all other charges and costs of the Funds’ operation unless otherwise explicitly assumed by the Adviser or the Administrator.

Expenses of the Funds which are not attributable to the operations of any class of shares or Fund are pro-rated among all classes of shares or certain Columbia Funds, including the Funds, based upon the relative net assets of each class or Fund. Expenses which are not directly attributable to a specific class of shares but are attributable to a specific Fund are prorated among all the classes of shares of such Fund based upon the relative net assets of each such class of shares. Expenses which are directly attributable to a class of shares are charged against the income available for distribution as dividends to such class of shares.

FUND GOVERNANCE

The Board

Leadership Structure and Risk Oversight

investment policies and risks in connection with its review of the Funds’ performance, and meets periodically with the portfolio managers of the Funds to receive reports regarding the management of the Funds, including their investment risks. In addition, as part of the Board’s periodic review of the Funds’ advisory, subadvisory and other service provider agreements, the Board may consider risk management aspects of their operations and the functions for which they are responsible.

Standing Committees

The Trust has four standing Committees, which are the Audit Committee, the Contracts Review Committee, the Governance Committee and the Investment Committee.

Following is a summary of each Trustee’s particular professional and other experience that qualifies each person to serve as a Trustee of the Trust as of the date of this SAI:

Independent Trustee Biographical Information


Name, Year of Birth and Position Held with the Trust	Year First Appointed or Elected to a Board in the Columbia Funds Complex	Principal Occupation(s) During the Past Five Years	Number of Funds in the Columbia Funds Complex Overseen	Other Directorships Held by Trustee During the Past Five Years
Edward J. Boudreau, Jr. (Born 1944) Trustee	Indefinite term; Trustee since January 2005	Managing Director – E.J. Boudreau & Associates (consulting), from 2000 through current	52	Trustee – BofA Funds Series Trust

William P. Carmichael (Born 1943) Trustee and Chairman of the Board	Indefinite term; Trustee since 1999	Retired	52	Director – Cobra Electronics Corporation (electronic equipment manufacturer); Simmons Company (bedding); and The Finish Line (athletic shoes and apparel); Trustee – BofA Funds Series Trust

William A. Hawkins (Born 1942) Trustee	Indefinite term; Trustee since January 2005	President and Chief Executive Officer – California Bank, N.A., from January 2008 through current	52	Trustee – BofA Funds Series Trust

R. Glenn Hilliard (Born 1943) Trustee	Indefinite term; Trustee since January 2005	Chairman and Chief Executive Officer – Hilliard Group LLC (investing and consulting), from April 2003 through current; Non-Executive Director & Chairman – Conseco, Inc. (insurance), September 2003 through current; Executive Chairman – Conseco, Inc. (insurance), August 2004 through September 2005	52	Director – Conseco, Inc. (insurance); Trustee – BofA Funds Series Trust

John J. Nagorniak (Born 1944) Trustee	Indefinite term; Trustee since January 2008	Retired; President and Director – Foxstone Financial, Inc. (consulting), 2000 through December 2007; Director – Mellon Financial Corporation affiliates (investing), 2000 through 2007; Chairman – Franklin Portfolio Associates (investing – Mellon affiliate) 1982 through 2007	52	Trustee –Research Foundation of CFA Institute; Director – MIT Investment Company; Trustee – MIT 401k Plan; Trustee – BofA Funds Series Trust

Minor M. Shaw (Born 1947) Trustee	Indefinite term; Trustee since 2003	President – Micco Corporation and Mickel Investment Group	52	Board Member – Piedmont Natural Gas; Trustee – BofA Funds Series Trust


Name, Year of Birth and Position Held with the Trust	Year First Appointed or Elected to a Board in the Columbia Funds Complex	Principal Occupation(s) During the Past Five Years	Number of Funds in the Columbia Funds Complex Overseen	Other Directorships Held by Trustee During the Past Five Years
*Interested Trustee Biographical Information*

Anthony M. Santomero* (Born 1946) Trustee	Indefinite term; Trustee since January 2008	Richard K. Mellon Professor Emeritus of Finance, The Wharton School, University of Pennsylvania, from 2002 through current; Senior Advisor – McKinsey & Company (consulting), 2006 through 2008; President and Chief Executive Officer – Federal Reserve Bank of Philadelphia, 2000 through 2006	52	Director – Renaissance Reinsurance Ltd.; Trustee – Penn Mutual Life Insurance Company; Director – Citigroup; Trustee – BofA Funds Series Trust

Compensation

Trustees are compensated for their services to the Columbia Funds Family on a complex-wide basis, as shown in the table below.

Independent Trustee Compensation for the Fiscal Year Ended March 31, 2010

Name of Trustee

Aggregate
Compensation
from
California
Intermediate
Municipal
Bond Fund
for the Fiscal
Year ended
March 31,
2010 ^(a)

Aggregate
Compensation
from
Georgia
Intermediate
Municipal
Bond Fund
for the Fiscal
Year ended
March 31,
2010 ^(a)

Aggregate
Compensation
from
Maryland
Intermediate
Municipal
Bond Fund
for the Fiscal
Year ended
March 31,
2010 ^(a)

Aggregate
Compensation
from
North Carolina
Intermediate
Municipal
Bond Fund for
the Fiscal Year
ended
March 31,
2010 ^(a)

Aggregate
Compensation
from
South Carolina
Intermediate
Municipal
Bond Fund for
the Fiscal Year
ended
March 31,
2010 ^(a)

Aggregate
Compensation
from
Virginia
Intermediate
Municipal
Bond Fund
for the Fiscal
Year ended
March 31,
2010 ^(a)

Edward J. Boudreau, Jr ^(b)

William P. Carmichael ^(c)

Minor M. Shaw ^(d)

R. Glenn Hilliard ^(e)

William A. Hawkins ^(f)

John J. Nagorniak ^(g)

Interested Trustee Compensation for the Fiscal Year Ended March 31, 2010

Anthony M. Santomero ^(h)

Independent Trustee Compensation for the Calendar Year Ended December 31, 2009


Name of Trustee		Total Compensation from Columbia Funds Complex for the Calendar Year ended December 31, 2009 ^(a)
Edward J. Boudreau, Jr ^(b)
William P. Carmichael ^(c)
Minor M. Shaw ^(d)
R. Glenn Hilliard ^(e)
William A. Hawkins ^(f)
John J. Nagorniak ^(g)

Interested Trustee Compensation for the Calendar Year Ended December 31, 2009


Anthony M. Santomero ^(h)

^(a)	All Trustees receive reimbursements for reasonable expenses related to their attendance at meetings of the Board or standing committees, which are not included in the amounts shown.

^(b)

^(c)

^(d)

^(e)

^(f)	During the fiscal year ended March 31, 2010, Mr. Hawkins deferred $0 of his compensation from the Fund. During the calendar year ended December 31, 2009, Mr. Hawkins deferred $0 of his total compensation from the Columbia Funds pursuant to the deferred compensation plan.

^(g)

^(h)

Columbia Funds Deferred Compensation Plan

attendance fees, or both components, which together comprise total compensation for service). Fees deferred by a Trustee are credited to a book reserve account (the Deferral Account) established by the Columbia Funds, the value of which is derived from the rate of return of one or more Columbia Funds selected by the Trustee (with accruals to the Deferral Account beginning at such time as a Trustee’s fund elections having been established, and fees for service having been paid into such account, and terminating at such time as when proceeds become payable to such Trustee under the Deferred Compensation Plan). Trustees may change their fund elections only in accordance with the provisions of the Deferred Compensation Plan.

Beneficial Equity Ownership

Independent Trustee Ownership for the Calendar Year Ended December 31, 2009


Trustee	Dollar Range of Equity Securities in the Funds	Aggregate Dollar Range of Equity Securities in all Funds in the Columbia Funds Family Overseen by the Trustees
Edward J. Boudreau, Jr.	California Intermediate Municipal Bond Fund – Georgia Intermediate Municipal Bond Fund – Maryland Intermediate Municipal Bond Fund – North Carolina Intermediate Municipal Bond Fund – South Carolina Intermediate Municipal Bond Fund – Virginia Intermediate Municipal Bond Fund –

William P. Carmichael	California Intermediate Municipal Bond Fund – Georgia Intermediate Municipal Bond Fund – Maryland Intermediate Municipal Bond Fund – North Carolina Intermediate Municipal Bond Fund – South Carolina Intermediate Municipal Bond Fund – Virginia Intermediate Municipal Bond Fund –

Minor M. Shaw	California Intermediate Municipal Bond Fund – Georgia Intermediate Municipal Bond Fund – Maryland Intermediate Municipal Bond Fund – North Carolina Intermediate Municipal Bond Fund – South Carolina Intermediate Municipal Bond Fund – Virginia Intermediate Municipal Bond Fund –


Trustee	Dollar Range of Equity Securities in the Funds	Aggregate Dollar Range of Equity Securities in all Funds in the Columbia Funds Family Overseen by the Trustees
R. Glenn Hilliard	California Intermediate Municipal Bond Fund – Georgia Intermediate Municipal Bond Fund – Maryland Intermediate Municipal Bond Fund – North Carolina Intermediate Municipal Bond Fund – South Carolina Intermediate Municipal Bond Fund – Virginia Intermediate Municipal Bond Fund –

William A. Hawkins	California Intermediate Municipal Bond Fund – Georgia Intermediate Municipal Bond Fund – Maryland Intermediate Municipal Bond Fund – North Carolina Intermediate Municipal Bond Fund – South Carolina Intermediate Municipal Bond Fund – Virginia Intermediate Municipal Bond Fund –

John J. Nagorniak	California Intermediate Municipal Bond Fund – Georgia Intermediate Municipal Bond Fund – Maryland Intermediate Municipal Bond Fund – North Carolina Intermediate Municipal Bond Fund – South Carolina Intermediate Municipal Bond Fund – Virginia Intermediate Municipal Bond Fund –

Interested Trustee Ownership for the Calendar Year Ended December 31, 2009

Anthony M. Santomero

California Intermediate Municipal Bond Fund –

Georgia Intermediate Municipal Bond Fund –

Maryland Intermediate Municipal Bond Fund –

North Carolina Intermediate Municipal Bond Fund –

South Carolina Intermediate Municipal Bond Fund –

Virginia Intermediate Municipal Bond Fund –

The Officers

Officer Biographical Information

Name, Year of
Birth and Address

Position with
the Trust

Year First

Elected or

Appointed

to Office

Principal Occupation(s)

During the Past Five Years

J. Kevin Connaughton

(Born 1964)

One Financial Center

Boston, MA 02111

President ( Principal Executive Officer )

2009

Senior Vice President and General Manager – Mutual Fund Products, Columbia Management Investment Advisers, LLC since May 2010; President, Columbia Funds, since 2009, and RiverSource Funds, since May 2010 (previously Senior Vice President and Chief Financial Officer, Columbia Funds, from June 2008 to January 2009, Treasurer, Columbia Funds, from October 2003 to May 2008, and senior officer of various other affiliated funds since 2000); Managing Director, Columbia Management Advisors, LLC from December 2004 to April 2010.


Name, Year of Birth and Address	Position with the Trust	Year First Elected or Appointed to Office	Principal Occupation(s) During the Past Five Years
Michael G. Clarke (Born 1969) One Financial Center Boston, MA 02111	Senior Vice President and Chief Financial Officer ( Principal Financial Officer )	2009	Vice President, Columbia Management Investment Advisers, LLC since May 2010; Managing Director of Fund Administration, Columbia Management Advisors, LLC, from September 2004 to April 2010; senior officer of Columbia Funds and affiliated funds since 2002.

Scott R. Plummer (Born 1959) 5228 Ameriprise Financial Center Minneapolis, MN 55474	Senior Vice President, Secretary and Chief Legal Officer	2010	Chief Legal Officer and Assistant Secretary, Columbia Management Investment Advisers, LLC since June 2005; Vice President and Lead Chief Counsel – Asset Management, Ameriprise Financial, Inc. since May 2010 (previously Vice President and Chief Counsel – Asset Management, from 2005 to April 2010, and Vice President – Asset Management Compliance from 2004 to 2005); Vice President, Chief Counsel and Assistant Secretary, Columbia Management Investment Distributors, Inc. since 2008; Vice President, General Counsel and Secretary, Ameriprise Certificate Company since 2005; Chief Counsel, RiverSource Distributors, Inc. since 2006; Vice President, General Counsel and Secretary, RiverSource Funds, since December 2006; Senior Vice President, Secretary and Chief Legal Officer, Columbia Funds, since May 2010.

Linda J. Wondrack (Born 1964) One Financial Center Boston, MA 02111	Senior Vice President and Chief Compliance Officer	2007	Vice President and Chief Compliance Officer, Columbia Management Investment Advisers, LLC since May 2010; Chief Compliance Officer, Columbia Funds, since 2007, and RiverSource Funds, since May 2010; Director (Columbia Management Group, LLC and Investment Product Group Compliance), Bank of America, from June 2005 to April 2010; Director of Corporate Compliance and Conflicts Officer of MFS Investment Management (investment management) from August 2004 to May 2005.

William F. Truscott (Born 1960) 53600 Ameriprise Financial Center Minneapolis, MN 55474	Senior Vice President	2010	Chairman of the Board, Columbia Management Investment Advisers, LLC since May 2010 (previously President, Chairman of the Board and Chief Investment Officer, from 2001 to April 2010); Chief Executive Officer, U.S. Asset Management & President, Annuities, Ameriprise Financial, Inc. since May 2010 (previously President – U.S. Asset Management and Chief Investment Officer from 2005 to April 2010, and Senior Vice President – Chief Investment Officer, from 2001 to 2005); Director, President and Chief Executive Officer, Ameriprise Certificate Company since 2006; Director, Columbia Management Investment Distributors, Inc. since May 2010 (previously Chairman of the Board and Chief Executive Officer from 2008 to April 2010); Chairman of the Board and Chief Executive Officer, RiverSource Distributors, Inc. since 2006.


Name, Year of Birth and Address	Position with the Trust	Year First Elected or Appointed to Office	Principal Occupation(s) During the Past Five Years
Colin Moore (Born 1958) One Financial Center Boston, MA 02111	Senior Vice President	2010	Director and Chief Investment Officer, Columbia Management Investment Advisers, LLC since May 2010; Manager, Managing Director and Chief Investment Officer of Columbia Management Advisors, LLC from 2007 to April 2010; Head of Equities, Columbia Management Advisors, LLC from 2002 to 2007.

Michael A. Jones (Born 1959) 100 Federal Street Boston, MA 02110	Senior Vice President	2010	Director and President, Columbia Management Investment Advisers, LLC since May 2010; President and Director, Columbia Management Investment Distributors, Inc. since May 2010; Manager, Chairman, Chief Executive Officer and President, Columbia Management Advisors, LLC from 2007 to April 2010; Chief Executive Officer, President and Director, Columbia Management Distributors, Inc. from November 2006 to April 2010; previously, co-president and senior managing director at Robeco Investment Management.

Amy Johnson (Born 1965) 5228 Ameriprise Financial Center Minneapolis, MN 55474	Senior Vice President	2010	Senior Vice President and Chief Operating Officer of the Adviser, since May 2010; Chief Administrative Officer, the Adviser from 2009 until May 2010; Vice President – Asset Management and Trust Company Services, the Adviser, 2006-2009; Vice President – Operations and Compliance, the Adviser, 2004-2006; Director of Product Development – Mutual Funds, Ameriprise Financial, 2001-2004.

Joseph F. DiMaria (Born 1968) One Financial Center Boston, MA 02111	Treasurer and Chief Accounting Officer	2008	Vice President, Mutual Fund Administration, Columbia Management Investment Advisers, LLC, since May 2010; Director of Fund Administration, Columbia Management Advisors, LLC from January 2006 to April 2010; Head of Tax/Compliance and Assistant Treasurer, Columbia Management Advisors, LLC, from November 2004 to December 2005.

Marybeth Pilat (Born 1968) One Financial Center Boston, MA 02111	Deputy Treasurer	2010	Vice President, Mutual Fund Administration, Columbia Management Investment Advisers, LLC, since May 2010; Vice President, Investment Operations, Bank of America, from October 2008 to April 2010; Finance Manager, Boston Children’s Hospital from August 2008 to October 2008; Director, Mutual Fund Administration, Columbia Management Advisors, LLC, from May 2007 to July 2008; Vice President, Mutual Fund Valuation, Columbia Management Advisors, LLC, from January 2006 to May 2007; Vice President, Mutual Fund Accounting Oversight, Columbia Management Advisors, LLC from January 2005 to January 2006.


Name, Year of Birth and Address	Position with the Trust	Year First Elected or Appointed to Office	Principal Occupation(s) During the Past Five Years
Julian Quero (Born 1967) One Financial Center Boston, MA 02111	Deputy Treasurer	2008	Vice President, Mutual Fund Administration, Columbia Management Investment Advisers, LLC since May 2010; Director of Fund Administration, Columbia Management Advisors, LLC, from August 2008 to April 2010; Senior Tax Manager, Columbia Management Advisors, LLC from August 2006 to July 2008; Senior Compliance Manager, Columbia Management Advisors, LLC from April 2002 to August 2006.

Stephen T. Welsh (Born 1957) One Financial Center Boston, MA 02111	Vice President	2006	President and Director, Columbia Management Investment Services Corp. since May 2010; President and Director, Columbia Management Services, Inc. from July 2004 to April 2010; Managing Director, Columbia Management Distributors, Inc. from August 2007 to April 2010.

Kathryn Thompson (Born 1967) One Financial Center Boston, MA 02111	Assistant Treasurer	2006	Director, Mutual Fund Accounting Oversight and Treasury of the Adviser, since May 2010; Vice President, Mutual Fund Accounting Oversight of the Previous Adviser from December 2004 to April 2010; Vice President, State Street Corporation (financial services) prior to December 2004.

Paul B. Goucher (Born 1968) 5228 Ameriprise Financial Center Minneapolis, MN 55474	Assistant Secretary	2010	Vice President and Chief Counsel of Ameriprise Financial since January 2010 (formerly Vice President and Group Counsel from November 2008 to January 2010); Director, Managing Director and General Counsel of J. & W. Seligman & Co. Incorporated (Seligman) from July 2008 to November 2008 and Managing Director and Associate General Counsel of Seligman from January 2005 to July 2008.

Ryan C. Larrenaga (Born 1970) One Financial Center Boston, MA 02111	Assistant Secretary	2005	Counsel, Ameriprise Financial since May 2010; Assistant General Counsel, Bank of America from March 2005 to April 2010; Associate, Ropes & Gray LLP (law firm) from 1998 to February 2005.

Christopher O. Petersen (Born 1970) 5228 Ameriprise Financial Center Minneapolis, MN 55474	Assistant Secretary	2010	Vice President and Chief Counsel, Ameriprise Financial since January 2010 (formerly Vice President and Group Counsel or Counsel from April 2004 to January 2010); Assistant Secretary of RiverSource Funds since January 2007.

BROKERAGE ALLOCATION AND OTHER PRACTICES

General Brokerage Policy, Brokerage Transactions and Broker Selection

The Trust will not execute portfolio transactions through, or buy or sell portfolio securities from or to, the Distributor, the Adviser, the Administrator or their affiliates acting as principal (including repurchase and reverse repurchase agreements), except to the extent permitted by applicable law, regulation or order. However, the Adviser is authorized to allocate buy and sell orders for portfolio securities to certain broker/dealers and financial institutions, including, in the case of agency transactions, broker/dealers and financial institutions that are affiliated with Ameriprise Financial. To the extent that a Fund executes any securities trades with an affiliate of Ameriprise Financial, the Fund does so in conformity with Rule 17e-1 under the 1940 Act and the procedures that the Fund has adopted pursuant to the rule. In this regard, for each transaction, the Board will determine that:

(i) the transaction resulted in prices for and execution of securities transactions at least as favorable to the particular Fund as those likely to be derived from a non-affiliated qualified broker/dealer; (ii) the affiliated broker/dealer charged the Fund commission rates consistent with those charged by the affiliated broker/dealer in similar transactions to clients comparable to the Fund and that are not affiliated with the broker/dealer in question; and (iii) the fees, commissions or other remuneration paid by the Fund did not exceed 2% of the sales price of the securities if the sale was effected in connection with a secondary distribution, or 1% of the purchase or sale price of such securities if effected in other than a secondary distribution.

Brokerage Commissions

Aggregate Brokerage Commissions Paid by the Funds


Fund	Fiscal Year Ended March 31, 2010	Fiscal Year Ended March 31, 2009		Fiscal Year Ended March 31, 2008
California Intermediate Municipal Bond Fund		$	1,099	—
Georgia Intermediate Municipal Bond Fund		$	472	—
Maryland Intermediate Municipal Bond Fund		$	875	—
North Carolina Intermediate Municipal Bond Fund		$	1,619	—
South Carolina Intermediate Municipal Bond Fund		$	1,486	—
Virginia Intermediate Municipal Bond Fund		$	1,261	—

The Funds paid no brokerage commissions to affiliated broker/dealers for the fiscal years ended March 31, 2008, 2009 and 2010.

Directed Brokerage

During the fiscal year ended March 31, 2010, no Fund directed brokerage transactions.

Securities of Regular Broker/Dealers

Investments in Securities of Regular Broker/Dealers as of March 31, 2010


Fund	Broker/Dealer	Dollar Amount of Securities Held
California Intermediate Municipal Bond Fund
Georgia Intermediate Municipal Bond Fund
Maryland Intermediate Municipal Bond Fund
North Carolina Intermediate Municipal Bond Fund
South Carolina Intermediate Municipal Bond Fund
Virginia Intermediate Municipal Bond Fund

Additional Shareholder Servicing Payments

Recipients of Shareholder Servicing Payments with respect to the Columbia Funds from the Distributor and/or other Ameriprise Financial Affiliates

•

Acclaim Benefits, Inc.

•

A.G. Edwards

•

Alerus Retirement Solutions

•

Ameriprise Financial Services, Inc.*

•

Bank of America, N.A.

•

Benefit Plan Administrators

•

Bisys Retirement Services

•

Charles Schwab & Co.

•

Charles Schwab Trust Co.

•

Citigroup Global Markets Inc.

•

CitiStreet LLC

•

City National Bank

•

Compensation & Capital Administrative Services, Inc.

•

CPI Qualified Plan Consultants

•

Daily Access Concepts, Inc.

•

Digital Retirement Solutions

•

Dreyfus

•

Edward D. Jones & Co., L.P.

•

E*Trade Group, Inc.

•

ExpertPlan

•

Fidelity Investments Institutional Operations Co.

•

First Clearing LLC

•

Genworth Financial

•

GPC Securities, Inc.

•

Guardian Life Insurance Company

•

GWFS Equities, Inc.

•

Hartford Life Insurance Company

•

Hewitt Associates LLC

•

ICMA Retirement Corporation

•

ING Life Insurance and Annuity Company

•

ING Institutional Plan Services, LLP

•

John Hancock Life Insurance Company (USA)

•

John Hancock Life Insurance Company of New York

•

JP Morgan Retirement Plan Services LLC

•

Lincoln Financial Group

•

LPL Financial Corporation

•

Marshall & Illsley Trust Company

•

Massachusetts Mutual Life Insurance Company

•

Matrix Settlement & Clearance Services

•

Mercer HR Services, LLC

•

Merrill Lynch Life Insurance Company

•

Merrill Lynch, Pierce, Fenner & Smith Incorporated

•

Mid Atlantic Capital Corporation

•

Morgan Keegan & Co., Inc.

•

Morgan Stanley & Co., Incorporated

•

MSCS Financial Services, LLC

•

National Investor Services Corp.

•

Newport Retirement Services, Inc.

•

New York State Deferred Compensation Plan

•

NYLife Distributors LLC

•

PNC Advisors

•

Princeton Retirement Group

•

Principal Life Insurance Company

•

Prudential Insurance Company of America

•

Prudential Retirement Insurance & Annuity Co.

•

Reliance Trust Company

•

Robert W. Baird & Co., Inc.

•

Royal Alliance Associates, Inc.

•

Standard Retirement Services, Inc.

•

TD Ameritrade Clearing Inc.

•

TD Ameritrade Trust Company

•

Teachers Insurance and Annuity Association of America

•

The 401k Company

•

T. Rowe Price Group, Inc.

•

The Vanguard Group, Inc.

•

Unified Trust Company, N.A.

•

UPromise Investments, Inc.

•

VALIC Retirement Services

•

Wachovia Bank, N.A.

•

Wachovia Securities, LLC

•

Wells Fargo Bank, N.A.

•

Wells Fargo Funds Management, LLC

•

Wilmington Trust Corporation

•

Wilmington Trust Retirement & Institutional Services Company

*	Ameriprise Financial affiliate

Additional Financial Intermediary Payments

Financial intermediaries may receive different commissions, sales charge reallowances and other payments with respect to sales of different classes of shares of the Funds. These other payments may include servicing payments to retirement plan administrators and other institutions at rates up to those described above under Brokerage Allocation and Other Practices – Additional Shareholder Servicing Payments . For purposes of this section the term “financial intermediary” includes any broker/dealer, bank, bank trust department, registered investment adviser, financial planner, retirement plan or other third party administrator and any other institution having a selling, services or any similar agreement with the Distributor and other Ameriprise Financial affiliates.

Marketing Support Payments

sales of the Columbia Funds distributed by the Distributor attributable to that financial intermediary, reimbursement of ticket charges (fees that a financial intermediary firm charges its representatives for effecting transactions in fund shares) or a negotiated lump sum payment.

As of the date of this SAI, the Distributor and/or the Adviser had agreed to make marketing support payments to the financial intermediaries or their affiliates shown below.

Recipients of Marketing Support Payments with Respect to the Columbia Funds from the Distributor and/or other Ameriprise Financial Affiliates

•

AIG Adviser Group

•

Ameriprise Financial Services, Inc.*

•

AXA Advisors, LLC

•

Banc of America Investment Services, Inc.

•

Banc of America Securities LLC

•

Bank of America, N.A.

•

Bank of New York

•

Citibank, N.A.

•

Citigroup Global Markets Inc.

•

Commonwealth Financial Network

•

Custodial Trust Company

•

Fidelity Brokerage Services, Inc.

•

Genworth Financial, Inc.

•

Goldman, Sachs & Co.

•

GunAllen Financial, Inc.

•

Harris Corporation

•

ING Life Insurance and Annuity Co.

•

J.J.B. Hilliard, W.L. Lyons, Inc.

•

J.P. Morgan Clearing Corp.

•

Liberty Life Insurance Co.

•

Lincoln Financial Advisors Corp.

•

Linsco/Private Ledger Corp.

•

Mellon Financial Markets, LLC

•

Merrill Lynch Life Insurance Company

•

Merrill Lynch, Pierce, Fenner & Smith Incorporated

•

Morgan Stanley & Co. Incorporated

•

MSCS Financial Services, LLC

•

National Financial Services LLC

•

Pershing LLC

•

Prudential Investment Management Services, LLC

•

Raymond James & Associates, Inc.

•

Raymond James Financial Services, Inc.

•

SEI Investments Inc.

•

State Street Global Markets, LLC

•

Transamerica Corporation

•

UBS Financial Services Inc.

•

US Bank National Association

•

Wachovia Securities LLC

•

Webster Investment Services, Inc.

•

Wells Fargo Corporate Trust Services

•

Wells Fargo Funds Management LLC

•

Wells Fargo Investments, LLC

*	Ameriprise Financial affiliate

Other Payments

compensation provided by the Distributor may include financial assistance to financial intermediaries that enable the Distributor to participate in and/or present at financial intermediary-sponsored conferences or seminars, sales or training programs for invited registered representatives and other financial intermediary employees, financial intermediary entertainment and other financial intermediary-sponsored events, and travel expenses, including lodging incurred by registered representatives and other employees in connection with prospecting, retention and due diligence trips. The Distributor makes payments for entertainment events it deems appropriate, subject to the Distributor’s internal guidelines and applicable law. These payments may vary depending upon the nature of the event.

CAPITAL STOCK AND OTHER SECURITIES

Description of the Trust’s Shares

The Funds offer shares in the classes shown in the table below. Subject to certain limited exceptions discussed in each Fund’s prospectuses, a Fund may no longer be accepting new investments from current shareholders or prospective investors. Class B shares of the Funds are closed to new investments, except for certain limited transactions from existing investors in Class B shares . Additional Class B shares of the Funds will be issued only in connection with (i) reinvestment of dividends and/or capital gain distributions in Class B shares of each Fund by the Fund’s existing Class B shareholders and (ii) exchanges by shareholders invested in Class B shares of a Columbia Fund may exchange those shares for Class B shares of a Fund. The Funds, however, may at any time and without notice, offer any of these classes to the general public for investment.

Share Classes Offered by the Funds


Fund	Class A Shares	Class B Shares*	Class C Shares	Class Z Shares
California Intermediate Municipal Bond Fund	ü	ü	ü	ü
Georgia Intermediate Municipal Bond Fund	ü	ü	ü	ü
Maryland Intermediate Municipal Bond Fund	ü	ü	ü	ü
North Carolina Intermediate Municipal Bond Fund	ü	ü	ü	ü
South Carolina Intermediate Municipal Bond Fund	ü	ü	ü	ü
Virginia Intermediate Municipal Bond Fund	ü	ü	ü	ü

Restrictions on Holding or Disposing of Shares

Shareholder Liability

debts except by reason of his or her own conduct or acts. In addition, a shareholder could incur a financial loss on account of the Funds’ obligation only if the Funds had no remaining assets with which to meet such obligation. We believe that the possibility of such a situation arising is extremely remote.

Dividend Rights

Voting Rights and Shareholder Meetings

Liquidation Rights

In the event of the liquidation or dissolution of the Trust or the Funds, shareholders of the Funds are entitled to receive the assets attributable to the relevant class of shares of the Funds that are available for distribution and to distribution of any general assets not attributable to a particular investment portfolio that are available for distribution in such manner and on such basis as the Board may determine.

Preemptive Rights

There are no preemptive rights associated with Fund shares.

Conversion Rights

the prospectus for Class B shares of the Funds, shareholders have the right, which is subject to change by the Board, to convert or “exchange” shares of one class for another. Such right is outlined and subject to certain conditions set forth in each Fund’s prospectuses.

Redemptions

Sinking Fund Provisions

The Trust has no sinking fund provisions.

Calls or Assessment

All Fund shares are issued in uncertificated form only and when issued will be fully paid and non-assessable by the Trust.

PURCHASE, REDEMPTION AND PRICING OF SHARES

Purchase and Redemption

The Trust also may make payment for sales in readily marketable securities or other property if it is appropriate to do so in light of the Trust’s responsibilities under the 1940 Act.

Tax-Advantaged Retirement Plans (Retirement Plans) . The Transfer Agent maintains prototype tax-qualified plans, including Pension and Profit-Sharing Plans, for individuals, corporations, employees and the self-employed. The minimum initial Retirement Plan investment is $1,000, applied at the plan level. BANA is the custodian/trustee and plan sponsor of the Columbia Management prototype plans offered through the Distributor. In general a $20 annual fee is charged.

Front-End Sales Charge Waivers

The investors listed below can buy Class A shares or Class T shares without paying a front-end sales charge.

•

Employees of Ameriprise Financial (and its predecessors), its affiliates and subsidiaries.

•

Trustees of funds advised or administered by the Adviser.

•

Directors, officers and employees of the Adviser, the Distributor, and their respective successors, any investment subadviser and companies affiliated with the Adviser.

•

Insurance company separate accounts for the benefit of group retirement plans.

•

Registered representatives and employees of selling and servicing agents (including their affiliates) that are parties to dealer agreements or other sales arrangements with the Distributor.

•

Broker/dealers if purchases are in accordance with the internal policies and procedures of the employing broker/dealer and made for their own investment purposes.

•

Employees or partners of any service provider to the Columbia Funds.

•

Families of the parties listed above and their beneficial accounts. Family members include: spouses, parents, stepparents, legal guardians, children, stepchildren, fathers-in-law and mothers-in-law.

•

Registered broker/dealer firms that have entered into a dealer agreement with the Distributor may buy Class A shares without paying a front-end sales charge for their investment account only.

•

Banks, trust companies and thrift institutions, acting as fiduciaries.

•

Class A, Class E and Class T shares (Class E shares and Class T shares are not currently open to new investors) of certain funds may also be bought at reduced or no sales charge by clients of dealers, brokers or registered investment advisors that have entered into arrangements with the Distributor pursuant to which the funds are included as investment options in wrap fee accounts, other managed agency/asset allocation accounts or programs involving fee-based compensation arrangements, and by participants in certain retirement plans.

•

Certain pension, profit-sharing or other employee benefit plans offered to non-U.S. investors.

•

Investors can also buy Class A shares without paying a sales charge if the purchase is made from the proceeds of a sale from any Columbia Fund Class A, B, C or T shares within 365 days, up to the amount of the sales proceeds. In addition, shareholders of the money market fund series of BofA Funds Series Trust, which were formerly referred to as the Columbia Money Market Funds (the Former Columbia Money Market Funds), can also

buy Class A shares of the Columbia Funds without paying a sales charge if the purchase is made from the proceeds of a sale of shares from a Former Columbia Money Market Fund within 365 days, up to the amount of the sales proceeds, provided that the proceeds are from the sale of shares of a Former Columbia Money Market Fund purchased on or before April 30, 2010. To be eligible for these reinstatement privileges the purchase must be made into an account for the same owner, but does not need to be into the same Columbia Fund from which the shares were sold. The Transfer Agent, Distributor or their agents must receive a written reinstatement request within 365 days after the shares are sold and the purchase of Class A shares through this reinstatement privilege will be made at the NAV of such shares next calculated after the request is received in good order.

Contingent Deferred Sales Charge Waivers (Class A, Class B and Class C Shares)

Shareholders won’t pay a CDSC in the following circumstances:

Health savings accounts: CDSCs may be waived on shares sold by health savings accounts sponsored by third party platforms, including those sponsored by Ameriprise Financial affiliates.

Qualified retirement plans: CDSCs may be waived on shares (except for Class B shares) sold by certain group retirement plans held in omnibus accounts.

Loans from qualified retirement plans: CDSCs may be waived on shares sold in connection with loans from qualified retirement plans to shareholders.

Anti-Money Laundering Compliance

Offering Price

Over-the-counter derivatives will generally be valued at fair value in accordance with the Funds’ fair valuation procedures.

Shares of open-end investment companies held in each Fund’s portfolio will generally be valued at the latest net asset value reported by the investment company.

TAXATION

Qualification as a Regulated Investment Company

Excise Tax

Capital Loss Carryforwards

Equalization Accounting

Taxation of Fund Investments

100

101

appreciated financial position. Losses realized from a sale of a position that was previously the subject of a constructive sale will be recognized when the position is subsequently disposed of. The character of such losses will depend upon a Fund’s holding period in the position beginning with the date the constructive sale was deemed to have occurred and the application of various loss deferral provisions in the Code. Constructive sale treatment does not apply to certain closed transactions, including if such a transaction is closed on or before the 30th day after the close of the Fund’s taxable year and the Fund holds the appreciated financial position unhedged throughout the 60-day period beginning with the day such transaction was closed.

If the Fund makes a distribution of income received by the Fund in lieu of dividends (a “substitute payment”) with respect to securities on loan pursuant to a securities lending transaction, such income will not constitute qualified dividend income to individual shareholders and will not be eligible for the dividends-received deduction for corporate shareholders. Similar consequences may apply to repurchase and other derivative transactions. Similarly, to the extent that a Fund makes distributions of income received by the Fund in lieu of tax-exempt interest with respect to securities on loan, such distributions will not constitute exempt-interest dividends (defined below) to shareholders.

102

Fund shareholders for U.S. federal income tax purposes. Investments in REIT equity securities also may require a Fund to accrue and distribute income not yet received. To generate sufficient cash to make the requisite distributions, the Fund may be required to sell securities in its portfolio (including when it is not advantageous to do so) that it otherwise would have continued to hold. Dividends received by the Fund from a REIT generally will not constitute qualified dividend income and will not qualify for the dividends-received deduction.

103

case of a “QEF election”), or to mark the gains (and to a limited extent losses) in its interests in the PFIC “to the market” as though the Fund had sold and repurchased such interests on the last day of the Fund’s taxable year, treating such gains and losses as ordinary income and loss (in the case of a “mark-to-market election”). The QEF and mark-to-market elections may require a Fund to recognize taxable income or gain without the concurrent receipt of cash and increase the amount required to be distributed by the Fund to avoid taxation. Making either of these elections therefore may require a Fund to liquidate other investments prematurely to meet the minimum distribution requirements described above, which also may accelerate the recognition of gain and adversely affect the Fund’s total return. Each Fund may attempt to limit and/or manage its holdings in PFICs to minimize tax liability and/or maximize returns from these investments but there can be no assurance that it will be able to do so. Moreover, because it is not always possible to identify a foreign corporation as a PFIC in advance of acquiring shares in the corporation, a Fund may incur the tax and interest charges described above in some instances. Dividends paid by PFICs will not be eligible to be treated as qualified dividend income, as defined below.

Taxation of Distributions

Except for exempt-interest dividends (defined below) paid by a Fund, distributions paid out of a Fund’s current and accumulated earnings and profits, whether paid in cash or reinvested in the Fund, generally are deemed to be taxable distributions and must be reported by each shareholder who is required to file a U.S. federal income tax return. Dividends and distributions on a Fund’s shares are generally subject to U.S. federal income tax as described herein to the extent they do not exceed the Fund’s realized income and gains, even though such dividends and distributions may economically represent a return of a particular shareholder’s investment. Such distributions are likely to occur in respect of shares purchased at a time when the Fund’s net asset value reflects either unrealized gains, or realized but undistributed income or gains. Such realized income and gains may be required to be distributed even when the Fund’s net asset value also reflects unrealized losses. For U.S. federal income tax purposes, a Fund’s earnings and profits, described above, are determined at the end of the Fund’s taxable year and are allocated pro rata to distributions paid over the entire year. Distributions in excess of a Fund’s current and accumulated earnings and profits will first be treated as a return of capital up to the amount of a shareholder’s tax basis in his or her Fund shares and then as capital gain. A return of capital is not taxable, but it reduces a shareholder’s tax basis in his or her Fund shares, thus reducing any loss or increasing any gain on a subsequent taxable disposition by the shareholder of his or her shares. A Fund may make distributions in excess of its earnings and profits to a limited extent, from time to time.

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Some states will not tax distributions made to individual shareholders that are attributable to interest a Fund earns on direct obligations of the U.S. government if the Fund meets the state’s minimum investment or reporting requirements, if any. Investments in GNMA or FNMA securities, bankers’ acceptances, commercial paper, and repurchase agreements collateralized by U.S. government securities generally do not qualify for tax-free treatment. This exemption may not apply to corporate shareholders.

Sales and Exchanges of Fund Shares

If a shareholder receives a Capital Gain Dividend or is deemed to receive a distribution of long-term capital gain with respect to any Fund share and such Fund share is held or treated as held for six months or less, then (unless otherwise disallowed) any loss on the sale or exchange of that Fund share will be treated as a long-term capital loss to the extent of the Capital Gain Dividend or deemed long-term capital gain distribution. If shares of a Fund are sold at a loss after being held for six months or less, the loss will be disallowed to the extent of any exempt-interest dividends (defined below) received on those shares.

Foreign Taxes

U.S. Federal Income Tax Rates

105

net long-term capital gain rate, which, as described above, generally is 15%. It is currently unclear whether Congress will extend this provision for tax years beginning on or after January 1, 2011. In general, “qualified dividend income” is income attributable to dividends received by a Fund from certain domestic and foreign corporations, as long as certain holding period and other requirements are met by the Fund with respect to the dividend-paying corporation’s stock and by the shareholders with respect to the Fund’s shares. If 95% or more of a Fund’s gross income (excluding net long-term capital gain over net short-term capital loss) constitutes qualified dividend income, all of its distributions (other than Capital Gain Dividends) will be generally treated as qualified dividend income in the hands of individual shareholders, as long as they have owned their Fund shares for at least 61 days during the 121-day period beginning 60 days before the Fund’s ex-dividend date (or, in the case of certain preferred stock, 91 days during the 181-day period beginning 90 days before such date) and meet certain other requirements specified in the Code. In general, if less than 95% of a Fund’s income is attributable to qualified dividend income, then only the portion of the Fund’s distributions that is attributable to qualified dividend income and designated as such in a timely manner will be so treated in the hands of individual shareholders who meet the aforementioned holding period requirements. The rules regarding the qualification of Fund distributions as qualified dividend income are complex, including the holding period requirements. Individual Fund shareholders therefore are urged to consult their own tax advisors and financial planners. Fixed income funds typically do not distribute significant amounts of qualified dividend income.

Backup Withholding

Tax-Deferred Plans

Corporate Shareholders

106

distribution by a Fund attributable to dividends of a domestic corporation will be eligible for the deduction only if certain holding period and other requirements are met. These requirements are complex; therefore, corporate shareholders of the Funds are urged to consult their own tax advisors and financial planners.

Foreign Shareholders

107

which the foreign shareholder realized gain constitute U.S. real property interests (USRPIs, defined below) or, in certain cases, the distributions are attributable to gain from the sale or exchange of a USRPI, as discussed below. If the requirements of clause (i) are met, the tax, reporting and withholding requirements applicable to U.S. persons generally will apply to the foreign shareholder and an additional branch profits tax may apply if the foreign shareholder is a foreign corporation. If the requirements of clause (i) are not met, but the requirements of clause (ii) are met, such gains and distributions will be subject to U.S. federal income tax at a 30% rate (or such lower rate as may be provided under an applicable income tax treaty). Please see below for a discussion of the tax implications to foreign shareholders in the event that clause (iii) applies. “Short-term capital gain dividends” are distributions attributable to a Fund’s net short-term capital gain in excess of its net long-term capital loss and designated as such by the Fund in a written notice mailed by the Fund to its shareholders not later than 60 days after the close of the Fund’s taxable year.

Even if permitted to do so, each Fund provides no assurance that it will designate any distributions as interest-related dividends or short-term capital gain dividends.

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extend such application for one additional year, i.e., to distributions made on or after January 1, 2010 but before January 1, 2011. However, as of the date of this SAI, it is unclear whether such legislation will be enacted and, if enacted, what the terms of the extension will be.

In addition, if a Fund is a USRPHC, it generally must withhold 10% of the amount realized in redemption by a greater-than-5% foreign shareholder, and that shareholder must file a U.S. income tax return for the year of the disposition of the USRPI and pay any additional tax due on the gain. Prior to January 1, 2010, such withholding generally was not required with respect to amounts paid in redemption of shares of a Fund if it was a domestically controlled USRPHC, or, in certain limited cases, if the Fund (whether or not domestically controlled) held substantial investments in regulated investment companies that were domestically controlled USRPHCs. Pending legislation proposes to extend this exemption from withholding for one additional year, i.e., for redemptions made on or after January 1, 2010 but before January 1, 2011. However, as of the date of this SAI, it is unclear whether such legislation will be enacted and, if enacted, what the terms of the extension will be. Unless and until such legislation is enacted, beginning on January 1, 2010, withholding is required in respect of amounts paid in redemption of shares of a Fund by a greater-than-5% foreign shareholder if the Fund is a USRPHC, without regard to whether the Fund or any regulated investment company in which it invests is domestically controlled.

A beneficial holder of shares who is a foreign person may be subject to state and local tax and to the U.S. federal estate tax in addition to the U.S. federal income tax referred to above.

Tax-Exempt Shareholders

109

Tax Shelter Reporting Regulations

Special Tax Considerations Pertaining to Tax-Exempt Funds

If, at the close of each quarter of a regulated investment company’s taxable year, at least 50% of the value of its total assets consists of obligations the interest on which is exempt from U.S. federal income tax under Section 103(a) of the Code, then the regulated investment company may qualify to pay “exempt-interest dividends” and pass through to its shareholders the tax-exempt character of its income from such obligations.” Each of the Funds intends to so qualify and is designed to provide shareholders with a high level of income in the form of exempt-interest dividends, which are generally exempt from U.S. federal income tax.

Distributions of capital gains or income not attributable to interest on a Fund’s tax-exempt obligations will not constitute exempt-interest dividends and will be taxable to shareholders as described earlier.

Not later than 60 days after the close of its taxable year, each Fund will notify its shareholders of the portion of the distributions for the taxable year which constitutes exempt-interest dividends. In general, if an amount of a Fund’s distribution designated as an exempt-interest dividend exceeds the Fund’s net-exempt interest, the amount so qualifying as tax-exempt will be scaled back ratably to the amount of its net-exempt income. In such a case, each Fund shareholder must proportionately reduce the amount of the dividend it treats as tax-exempt, and will generally include the excess income as a taxable dividend to the extent of certain disallowed deductions and thereafter as a return of capital. The deductibility of interest paid or accrued on indebtedness incurred by a shareholder to purchase or carry shares of a Fund may be limited. The portion of such interest that is non-deductible generally equals the amount of such interest times the ratio of the Fund’s exempt-interest dividends received by the shareholder to all of the Fund’s dividends received by the shareholder (excluding Capital Gain Dividends and any capital gains required to be included in the shareholder’s long term capital gains in respect of capital gains retained by the Fund, as described earlier).

110

Tax-exempt interest on certain “private activity bonds” has been designated as a “tax preference item” and must be added back to taxable income for purposes of calculating U.S. federal alternative minimum tax (AMT). To the extent that a Fund invests in certain private activity bonds, its shareholders will be required to report that portion of the Fund’s distributions attributable to income from the bonds as a tax preference item in determining their U.S. federal AMT, if any. Shareholders will be notified of the tax status of distributions made by a Fund. Persons who may be “substantial users” (or “related persons” of substantial users) of facilities financed by private activity bonds should consult their tax advisors before purchasing shares in a Fund. In addition, exempt-interest dividends paid by a Fund to a corporate shareholder are included in the shareholder’s “adjusted current earnings” as part of its U.S. federal AMT calculation. As of the date of this SAI, individuals are subject to the U.S. federal AMT at a maximum rate of 28% and corporations at a maximum rate of 20%. Shareholders with questions or concerns about the U.S. federal AMT should consult their own tax advisors.

Ordinarily, a Fund relies on an opinion from the issuer’s bond counsel that interest on the issuer’s obligation will be exempt from U.S. federal income taxation. However, no assurance can be given that the IRS will not successfully challenge such exemption, which could cause interest on the obligation to be taxable and could jeopardize a Fund’s ability to pay exempt-interest dividends. Similar challenges may occur as to state-specific exemptions. Also, from time to time legislation may be introduced or litigation may arise that would change the treatment of exempt-interest dividends. Such litigation or legislation may have the effect of raising the state or other taxes payable by shareholders on such dividends. Shareholders should consult their tax advisors for the current law on exempt-interest dividends.

A shareholder who receives Social Security or railroad retirement benefits should consult his or her tax advisor to determine what effect, if any, an investment in a Fund may have on the federal taxation of such benefits. Exempt-interest dividends are included in income for purposes of determining the amount of benefits that are taxable.

Special Tax Considerations Pertaining to California Intermediate Municipal Bond Fund

If, at the close of each quarter of its taxable year, at least 50% of the value of the total assets of a regulated investment company consists of obligations, which, when held by an individual, the interest therefrom is exempt from income taxation by California (California Exempt Securities), then the regulated investment company will be qualified to make distributions that are exempt from California state individual income tax (California exempt-interest distributions). For this purpose, California Exempt Securities generally are limited to California municipal securities and certain U.S. Government and U.S. Possession obligations. The California Intermediate Municipal Bond Fund intends to qualify under the above requirements so that it can pay California exempt-interest distributions.

Within sixty days after the close of its taxable year, the Fund will notify its shareholders of the portion of the distributions paid by the Fund that is exempt from California state individual income tax. The total amount of California exempt-interest distributions paid by the Fund with respect to any taxable year cannot exceed the excess of the amount of interest received by the Fund for such year on California Exempt Securities over any amounts that, if the Fund were treated as an individual, would be considered expenses related to tax exempt income or amortizable bond premium that would not be deductible under federal income or California state individual income tax law.

Interest on indebtedness incurred or continued by a shareholder in a taxable year to purchase or carry shares of the California Intermediate Municipal Bond Fund is not deductible for California state individual income tax purposes if the Fund distributes California exempt-interest distributions during the shareholder’s taxable year.

111

The foregoing is only a summary of some of the important California state individual income tax considerations generally affecting the California Intermediate Municipal Bond Fund and its shareholders. No attempt is made to present a detailed explanation of the California state income tax treatment of the Fund or its shareholders, and this discussion is not intended as a substitute for careful planning. Further, it should be noted that the portion of any of the Fund’s distributions constituting California exempt-interest distributions is excludable from income for California state individual income tax purposes only. Any distributions paid to shareholders subject to California state franchise tax or California state corporate income tax may be taxable for such purposes. Accordingly, potential investors in the Fund, including, in particular, corporate investors which may be subject to either California franchise tax or California corporate income tax, should consult their own tax advisors with respect to the application of such taxes to the receipt of the Fund’s distributions and as to their own California state tax situation, in general.

Special Tax Considerations Pertaining to the Georgia Intermediate Municipal Bond Fund

The portion of the Fund’s exempt-interest distributions paid to residents of Georgia attributable to interest received by the Georgia Funds on tax-exempt obligations of the State of Georgia or its political subdivision or authorities and other Fund distributions attributable to interest received from U.S. Government obligations will be exempt from Georgia individual and corporate income taxes. There is no Georgia intangibles tax or other personal property tax applicable to the shares of the Georgia Funds owned by investors residing in Georgia. The Georgia intangibles tax was repealed by the Georgia General Assembly on March 21, 1996, further ratified by a Constitutional Amendment approved in the November 1996 General Election (GA. L 1996, P.130 § 9). The Georgia intangibles tax was repealed for taxable years beginning after January 1, 1996. Distributions attributable to capital gains realized from the sale of Georgia municipal bonds and U.S. Government obligations will be subject to the State of Georgia short-term or long-term capital gains tax, which follow the federal income tax treatment. Interest received by a Georgia resident from non-Georgia municipal state bonds and distributions received from mutual funds that derive income from non-Georgia municipal or state bonds will be subject to Georgia income tax.

Special Tax Considerations Pertaining to Maryland Intermediate Municipal Bond Fund

The portion of the Maryland Intermediate Municipal Bond Fund’s exempt-interest distributions attributable to interest received by the Fund on tax-exempt obligations of the state of Maryland or its political subdivisions or authorities, or obligations issued by the government of Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa or their authorities (Maryland Municipal Bonds) and distributions attributable to gains from the disposition Maryland Municipal Bonds (other than obligations issued by U.S. possessions) or interest on U.S. Government obligations will be exempt from Maryland individual and corporate income taxes; any other Fund distributions will be subject to Maryland income tax. Fund shareholders will be informed annually regarding the portion of the Maryland Intermediate Municipal Bond Fund’s distributions that constitutes exempt-interest distributions exempt from Maryland income taxes. Maryland presently includes in Maryland taxable income a portion of certain items of tax preference as defined in the Code. Interest paid on certain private activity bonds constitutes such a tax preference if the bonds (i) are not Maryland Municipal Bonds or (ii) are Maryland Municipal Bonds issued by U.S. possessions. Accordingly, up to 50% of any distributions from the Maryland Intermediate Municipal Bond Fund attributable to interest on such private activity bonds may not be exempt from Maryland state and local individual income taxes. Shares of the Maryland Intermediate Municipal Bond Fund will not be subject to the Maryland personal property tax.

Special Tax Considerations Pertaining to the North Carolina Intermediate Municipal Bond Fund

The portion of the North Carolina Intermediate Municipal Bond Fund’s exempt-interest distributions attributable to interest received by the Fund on tax-exempt obligations of the State of North Carolina or its political subdivisions, commissions, authorities, agencies or non-profit educational institutions organized or chartered under the laws of North Carolina, or obligations issued by the United States or its possessions will be

112

exempt from North Carolina individual and corporate income taxes. Although capital gain distributions generally are subject to tax in North Carolina, individual shareholders of the North Carolina Intermediate Municipal Bond Fund may deduct the amount of capital gain distributions (if any) attributable to the sale of certain obligations issued before July 1, 1995 for purposes of determining their North Carolina taxable income.

Special Tax Considerations Pertaining to the South Carolina Intermediate Municipal Bond Fund

The portion of the South Carolina Intermediate Municipal Bond Fund’s exempt-interest distributions attributable to interest received by the Fund on tax-exempt obligations of the State of South Carolina, its political subdivisions or exempt interest upon obligations of the United States will be exempt from South Carolina income taxes. Distributions of capital gains or income not attributable to interest from tax-exempt obligations of the State of South Carolina, its political subdivisions or exempt interest on obligations of the United States may be subject to South Carolina income taxes.

Although distributions of capital gains and the gain recognized with respect to the sale or exchange of shares of the Fund may be subject to the South Carolina state income tax, individuals, estates and trusts are entitled to a deduction for South Carolina taxable income purposes equal to 44% of the net capital gain recognized in South Carolina during a taxable year. The definition of net capital gain for federal income tax purposes is utilized for purposes of this deduction. In the case of estates or trusts, the deduction is applicable only to income taxed to the estate or trust or individual beneficiaries and not income passed through to non-individual beneficiaries.

Special Tax Considerations Pertaining to the Virginia Intermediate Municipal Bond Fund

The portion of the Virginia Intermediate Municipal Bond Fund’s distributions attributable to interest on (i) debt obligations of Virginia or its political subdivisions, and (ii) debt obligations of the United States and any authority, commission or instrumentality of the United States (including Puerto Rico, Guam, and the U.S. Virgin Islands), that are, in each case, backed by the full faith and credit of the borrowing government, will be exempt from Virginia income tax. Furthermore, any of the Virginia Intermediate Municipal Bond Fund’s distributions that are attributable to realized gains from dispositions of the foregoing debt obligations may also be exempt from Virginia income tax.

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CONTROL PERSONS AND PRINCIPAL SHAREHOLDERS

Principal Holder Ownership of the Funds


Fund		Shareholder Account Registration		Share Balance		Percentage of class

114

Control Person Ownership of the Funds


Fund		Shareholder Account Registration		Share Balance		Percentage of Fund

[To Come]

115

LEGAL PROCEEDINGS

116

Ameriprise Financial and certain of its affiliates have historically been involved in a number of legal, arbitration and regulatory proceedings, including routine litigation, class actions, and governmental actions, concerning matters arising in connection with the conduct of their business activities. Ameriprise Financial believes that the Funds are not currently the subject of, and that neither Ameriprise Financial nor any of its affiliates are the subject of, any pending legal, arbitration or regulatory proceedings that are likely to have a material adverse effect on the Funds or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Funds. Ameriprise Financial is required to make 10-Q, 10-K and, as necessary, 8-K filings with the SEC on legal and regulatory matters that relate to Ameriprise Financial and its affiliates. Copies of these filings may be obtained by accessing the SEC website at www.sec.gov.

117

APPENDIX A — DESCRIPTIONS OF SECURITIES RATINGS

STANDARD & POOR’S (S&P)

Bonds

The following summarizes the ratings used by S&P for bonds. The ratings AAA, AA, A and BBB denote investment grade securities.

AAA bonds have the highest rating assigned by S&P and are considered to have an extremely strong capacity to pay interest and repay principal.

AA bonds are considered to have a very strong capacity to pay interest and repay principal, and they differ from AAA only in small degree.

CC rating typically is applied to debt subordinated to senior debt that is assigned an actual or implied CCC rating.

A-1

C rating typically is applied to debt subordinated to senior debt that is assigned an actual or implied CCC — debt rating. The C rating may be used to cover a situation, for example, where a bankruptcy petition has been filed, but debt service payments are continued.

CI rating is reserved for income bonds on which no interest is being paid.

Plus (+) or minus (-) : The ratings from AA to CCC may be modified by the addition of a plus or minus sign to show relative standing within the major rating categories.

Municipal Notes

SP-2. Notes rated SP-2 are considered to have satisfactory capacity to pay principal and interest.

Notes due in three years or less normally receive a note rating. Notes maturing beyond three years normally receive a bond rating, although the following criteria are used in making that assessment:

Amortization schedule (the larger the final maturity relative to other maturities, the more likely the issue will be rated as a note).

Source of payment (the more dependent the issue is on the market for its refinancing, the more likely it will be rated as a note).

Commercial Paper

MOODY’S INVESTORS SERVICE, INC. (MOODY’S)

Municipal Bonds

A-2

Those bonds in the Aa through B groups that Moody’s believes possess the strongest investment attributes are designated by the symbols Aa1, A1 or Baa1.

Caa bonds are considered to be of poor standing. Such issues may be in default or there may be present elements of danger with respect to principal or interest.

Ca bonds are considered to represent obligations that are speculative in a high degree. Such issues are often in default or have other marked shortcomings.

C bonds are the lowest rated class of bonds and issues so rated are considered to have extremely poor prospects of ever attaining any real investment standing.

Corporate Bonds

Municipal Notes

MIG 2. This designation denotes high quality. Margins of protection are ample although not so large as in the preceding group.

A-3

Commercial Paper

Moody’s employs the following three designations, all judged to be investment grade, to indicate the relative repayment capacity of rated issuers:

Prime-1 Highest Quality

Prime-2 Higher Quality

Prime-3 High Quality

FITCH, INC. (FITCH)

Long-Term Debt

Investment Grade Bond Ratings

Speculative Grade Bond Ratings

A-4

CC bonds are considered to be minimally protected. Default in payment of interest and/or principal seems probable over time.

C bonds are in imminent default in payment of interest or principal.

Plus (+) or minus (-) : Plus or minus signs are used to show relative standing within the major rating categories. Plus and minus signs, however, are not used in the DDD, DD, or D categories.

Short-Term Debt

F-1+ obligations have exceptionally strong credit quality and are considered to have the strongest degree of assurance for timely payment.

F-1 obligations are considered to reflect an assurance of timely payment only slightly less in degree than issues rated F-1+.

B obligations are considered to have a minimal capacity for timely payment of financial commitments and a susceptibility to the adverse effects of changes in circumstances and economic conditions.

D obligations are in actual or imminent payment default.

A-5

APPENDIX B — PROXY VOTING POLICIES AND PROCEDURES

COLUMBIA MANAGEMENT INVESTMENT ADVISERS, LLC

PROXY VOTING POLICY FOR LEGACY COLUMBIA MANAGEMENT CLIENTS

EFFECTIVE MAY 1, 2010

•

References to Columbia Management Advisors, LLC and CMA are deemed to be references to Columbia Management Investment Advisers, LLC; and

•

References to Bank of America Corporation and BAC are deemed to be references to Ameriprise Financial, Inc.

In addition, the text of footnote 1 in the Proxy Voting Policy is hereby deleted and replaced with the following:

B-1

Columbia Management Advisors, LLC (“CMA”) – Proxy Voting Policy

Last Review Date:

April 2010

Applicable Regulatory Authority:

Rule 206(4)-6 under the Investment Advisers Act of 1940

Form N-PX

ERISA Department of Labor Bulletin 08-2

Institutional Shareholder Services, Inc.

(SEC No Action Letter dated September 15, 2004)

Explanation/Summary of Regulatory Requirements

Policy Summary

Policy

CMA endeavors to vote, in accordance with this Policy, all proxies of which it becomes aware prior to the vote deadline date, subject to certain general exceptions described below.

B-2

Means of Achieving Compliance

The specific responsibilities of the Proxy Committee and scope of its oversight are described in the Proxy Committee’s charter.

CMA’S INVESTMENT ASSOCIATES’RESPONSIBILITIES

CONFLICTS OF INTEREST

For purposes of this policy, a material conflict of interest is a relationship or activity engaged in by CMA, a CMA affiliate ² , or a CMA associate that creates an incentive (or appearance thereof) to favor the interests of CMA, the affiliate, or associate, rather than the clients’ interests. However, a material conflict of interest is not automatically created when there is a relationship or activity engaged in by a CMA affiliate, but there is a possibility that a CMA affiliate could cause a conflict. CMA may have a conflict of interest if either CMA has a significant business relationship with a company that is soliciting a proxy, or if a CMA associate involved in the proxy voting decision-making process has a significant personal or family relationship with the particular company. A conflict of interest is considered to be “material” to the extent that a reasonable person could expect the conflict to influence CMA’s decision on the particular vote at issue. In all cases where there is deemed to be a material conflict of interest, CMA will seek to resolve said conflict in the clients’ best interests.

B-3

•

Causing the proxies to be voted in accordance with the recommendations of an independent third party (which generally will be CMA’s proxy voting agent);

•

Causing the proxies to be delegated to a qualified, independent third party, which may include CMA’s proxy voting agent; or

•

In unusual cases, with the Client’s consent and upon ample notice, forwarding the proxies to CMA’s clients so that they may vote the proxies directly.

Affiliate Investment Companies and Public Companies

Management of Conflicts of Interest – Additional Procedures

CMA and other BAC affiliates have adopted various other policies and procedures that help reinforce this Policy. Please see any associated documents.

Ownership Limits – Delegation of Proxy Voting to an Independent Third Party

B-4

PROXY VOTING GUIDELINES

A. CMA’s Proxy Voting Guidelines – General Practices.

B. Ability to Vote Proxies Other than as Provided by Voting Guidelines.

C. Other Proxy Matters

For the following categories, proxies will be voted as stated below:

1. New Proposals. For certain new proposals that are expected to be proposed to shareholders of multiple companies, the Proxy Committee may develop a Voting Guideline which will be incorporated into this Policy.

4. Proxies of International Issuers. In general, CMA will refrain from voting securities in cases where international issuers impose share blocking restrictions. However, in the exceptional circumstances that CMA determines that it would be appropriate to vote such securities, all proposals for these securities will be voted only on the specific instruction of the Proxy Committee and to the extent practicable in accordance with the Voting Guidelines set forth in this Policy. Additionally, proxies will typically not be voted in markets where powers of attorney are required to be executed in order to vote shares.

6. Proxy Voting for Securities on Loan. CMA generally votes in cases where shares have been loaned from actively managed Columbia Funds as long as the shares have been recalled in a timely manner. However, CMA generally does not vote shares that have been loaned from passively managed Columbia Index Funds. Other CMA clients may have their own stock loan programs and may or may not recall their shares for proxy voting.

B-5

Supervision

Escalation

Monitoring/Oversight

Recordkeeping

•

The name of the issuer of the security;

•

The exchange ticker symbol of the portfolio security (if symbol is available through reasonably practicable means);

•

The Council on Uniform Securities Identification Procedures number for the portfolio security (if number is available through reasonably practicable means);

•

The shareholder meeting date;

•

A brief identification of the matter voted on;

•

Whether the matter was proposed by the issuer or by a security holder;

•

Whether the company cast its vote on the matter;

•

How the company cast its vote (e.g., for or against proposal, or abstain; for or withhold regarding the election of directors); and

•

Whether the company cast its vote for or against management.

B-6

These records include:


Document		Responsible Party
Proxy Committee Meeting Minutes and Related Materials		Proxy Group in GWIM Investment Operations

Proxy Vote Recommendation Form and Supporting Materials of Investment Management Personnel Concerning Proxy Decisions and Recommendations (or any other document created by CMA that was material to making a voting decision or that memorializes the basis for the voting decision)		Proxy Group in GWIM Investment Operations

Conflicts of Interest Review Documentation, including Conflicts of Interest Forms		Compliance Risk Management

Client Communications Regarding Proxy Matters		Client Service Group

Copy of Each Applicable Proxy Statement Unless it has been Filed with the SEC and may be Obtained from the SEC’s EDGAR System		Proxy Group in GWIM Investment Operations

Records should be retained for a period of not less than six years plus the current year. Records must be retained in an appropriate office of CM for the first three years.

B-7

APPENDIX A – CMA’s Proxy Voting Policy

CMA’S VOTING GUIDELINES

A. The Proxy Committee has adopted the following guidelines for voting proxies:

1. Matters Relating to the Board of Directors/Corporate Governance

CMA generally will vote FOR:

•

However, CMA generally will WITHHOLD votes from pertinent director nominees if:

(i)

the board as proposed to be constituted would have more than one-third of its members from management;

(ii)

(iii)

the nominee, as a member of the audit committee, permitted the company to incur excessive non-audit fees (as defined below regarding other business matters – ratification of the appointment of auditors);

(iv)

a director serves on more than six public company boards;

(v)

the CEO serves on more than two public company boards other than the company’s board; or

(vi)

•

Proposals to declassify a board, absent special circumstances that would indicate that shareholder interests are better served by a classified board structure.

CMA generally will vote FOR:

•

Proposals to separate the role of Chairman of the Board and CEO.

•

Proposals that grant or restore shareholder ability to remove directors with or without cause.

•

Proposals to permit shareholders to elect directors to fill board vacancies.

•

Proposals that encourage directors to own a minimum amount of company stock.

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•

Proposals to provide or to restore shareholder appraisal rights.

•

Proposals for the company to adopt confidential voting.

CMA will generally vote FOR 162(m) bonus plans unless the Proxy Administrator recommends voting against a specific plan, in which case CMA will vote on a CASE- BY- CASE basis.

CMA generally will vote AGAINST:

•

Proposals to classify boards, absent special circumstances indicating that shareholder interests would be better served by a classified board structure.

•

Proposals that give management the ability to alter the size of the board without shareholder approval.

•

Proposals that provide directors may be removed only by supermajority vote.

•

Proposals which allow more than one vote per share in the election of directors.

•

Proposals that provide that only continuing directors may elect replacements to fill board vacancies.

•

Proposals that mandate a minimum amount of company stock that directors must own.

•

Proposals to limit the tenure of non-management directors.

CMA will vote on a CASE-BY-CASE basis:

•

In contested elections of directors. Proposals to adopt or eliminate cumulative voting.

•

CMA generally will vote on a CASE-BY-CASE basis on board approved proposals relating to corporate governance. Such proposals include, but are not limited to:

•

Reimbursement of proxy solicitation expenses taking into consideration whether or not CMA was in favor of the dissidents.

•

CMA will vote on a CASE-BY-CASE basis to indemnify directors and officers, and AGAINST proposals to indemnify external auditors.

•

CMA will vote FOR the indemnification of internal auditors, unless the costs associated with the approval are not disclosed.

2. Compensation

CMA generally will vote FOR:

•

Proposals requiring that executive severance arrangements be submitted for shareholder ratification.

•

Proposals asking a company to expense stock options.

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•

Proposals to put option repricings to a shareholder vote.

•

Shareholder proposals to adopt a non-binding advisory vote on Executive Compensation (“Say on Pay”).

•

CMA generally will vote AGAINST:

•

Stock option plans that permit issuance of options with an exercise price below the stock’s current market price, or that permit replacing or repricing of out-of-the money options.

•

Proposals to authorize the replacement or repricing of out-of-the money options.

•

CMA will vote on a CASE-BY-CASE basis:

•

Proposals regarding approval of specific executive severance arrangements.

•

-Management proposals regarding “Say on Pay” (i.e. non-binding advisory vote on pay).

•

Proposals that involve awarding 50% or more of the equity shares of an equity-based compensation plan to the top five or fewer executives.

3. Capitalization

CMA generally will vote FOR:

•

Proposals for the elimination of authorized but unissued shares or retirement of those shares purchased for sinking fund or treasury stock.

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•

Proposals to institute/renew open market share repurchase plans in which all shareholders may participate on equal terms.

•

Proposals to reduce or change the par value of common stock, provided the number of shares is also changed in order to keep the capital unchanged.

CMA will evaluate on a CASE-BY-CASE basis proposals regarding:

•

Whether the company has attained benefits from being publicly traded.

•

Cash-out value

•

Balanced interests of continuing vs. cashed-out shareholders

•

Market reaction to public announcement of transaction

4. Mergers, Restructurings and Other Transactions

5. Anti-Takeover Measures

Poison Pills

•

CMA votes FOR shareholder proposals that ask a company to submit its poison pill for shareholder ratification.

•

CMA generally votes FOR shareholder proposals to eliminate a poison pill.

•

CMA generally votes AGAINST management proposals to ratify a poison pill.

Greenmail

•

CMA will vote FOR proposals to adopt anti-greenmail charter or bylaw amendments or to otherwise restrict a company’s ability to make greenmail payments.

Supermajority vote

•

Control Share Acquisition Provisions

•

CMA will vote FOR proposals to opt out of control share acquisition statutes.

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6. Other Business Matters

CMA generally will vote FOR:

•

Bylaw amendments giving holders of at least 25% of outstanding common stock the ability to call a special meeting of stockholders.

•

Board governance document amendments or other proposals which give the lead independent director the authority to call special meetings of the independent directors at any time.

CMA generally will vote FOR:

•

Proposals to approve routine business matters such as changing the company’s name and procedural matters relating to the shareholder meeting such as approving the minutes of a prior meeting.

•

Proposals to ratify the appointment of auditors, unless any of the following apply in which case CMA will generally vote AGAINST the proposal:

•

Credible reason exists to question:

•

The auditor’s independence, as determined by applicable regulatory requirements.

•

The accuracy or reliability of the auditor’s opinion as to the company’s financial position.

•

Bylaw or charter changes that are of a housekeeping nature (e.g., updates or corrections).

•

Proposals to approve the annual reports and accounts provided the certifications required by the Sarbanes Oxley Act of 2002 have been provided.

CMA generally will vote AGAINST:

•

Proposals to eliminate the right of shareholders to act by written consent or call special meetings.

•

Shareholder proposals to change the date, time or location of the company’s annual meeting of shareholders.

CMA will vote AGAINST:

•

Authorization to transact other unidentified substantive (as opposed to procedural) business at a meeting.

CMA will vote on a CASE-BY-CASE basis:

•

Proposals on whether and how to vote on “bundled” or otherwise conditioned proposals, depending on the overall economic effects upon shareholders.

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•

7. Other Matters Relating to Foreign Issues

CMA generally will vote FOR:

•

Most stock (scrip) dividend proposals. CMA votes AGAINST proposals that do not allow for a cash option unless management demonstrates that the cash option is harmful to shareholder value.

•

Proposals to capitalize the company’s reserves for bonus issues of shares or to increase the par value of shares.

•

Proposals to approve control and profit transfer agreements between a parent and its subsidiaries.

•

Proposals for the adoption of financing plans if they are in the best economic interests of shareholders.

•

The supervisory board needs to approve an issuance of shares while the supervisory board is independent within the meaning of CMA’ categorization rules and the Dutch Corporate Governance Code.

•

No call/put option agreement exists between the company and the foundation.

•

There is a qualifying offer clause or there are annual management and supervisory board elections.

•

The issuance authority is for a maximum of 18 months.

•

The board of the company-friendly foundation is independent.

•

The company has disclosed under what circumstances it expects to make use of the possibility to issue preference shares.

•

There are no priority shares or other egregious protective or entrenchment tools.

•

The company releases its proxy circular, with details of the poison pill proposal, at least three weeks prior to the meeting.

•

Art 2:359c Civil Code of the legislative proposal has been implemented.

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8. Investment Company Matters

Election of Directors:

CMA will vote on a CASE-BY-CASE basis proposals for the election of directors, considering the following factors:

•

Board structure

•

Attendance at board and committee meetings.

CMA will WITHHOLD votes from directors who:

•

Ignore a shareholder proposal that is approved by a majority of shares outstanding;

•

Ignore a shareholder proposal this is approved by a majority of the votes cast for two consecutive years;

•

Are interested directors and sit on the audit or nominating committee; or

•

Are interested directors and the full board serves as the audit or nominating committee or the company does not have one of these committees.

Proxy Contests:

CMA will vote on a CASE-BY-CASE basis proposals for proxy contests, considering the following factors:

•

Past performance relative to its peers

•

Market in which fund invests

•

Measures taken by the board to address the pertinent issues (e.g., closed-end fund share market value discount to NAV)

•

Past shareholder activism, board activity and votes on related proposals

•

Strategy of the incumbents versus the dissidents

•

Independence of incumbent directors; director nominees

•

Experience and skills of director nominees

•

Governance profile of the company

•

Evidence of management entrenchment

Converting Closed-end Fund to Open-end Fund:

CMA will vote conversion proposals on a CASE-BY-CASE basis, considering the following factors:

•

Past performance as a closed-end fund

•

Market in which the fund invests

•

Measures taken by the board to address the discount

•

Past shareholder activism, board activity, and votes on related proposals.

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Investment Advisory Agreements:

CMA will vote investment advisory agreements on a CASE-BY-CASE basis, considering the following factors:

•

Proposed and current fee schedules

•

Fund category/investment objective

•

Performance benchmarks

•

Share price performance as compared with peers

•

Resulting fees relative to peers

•

Assignments (where the adviser undergoes a change of control)

Approving New Classes or Series of Shares:

CMA will vote FOR the establishment of new classes or series of shares.

Preferred Stock Proposals:

CMA will vote on a CASE-BY-CASE basis proposals for the authorization for or increase in the preferred shares, considering the following factors:

•

Stated specific financing purpose

•

Possible dilution for common shares

•

Whether the shares can be used for anti-takeover purposes

Policies Addressed by the Investment Company Act of 1940 (“1940 Act”):

CMA will vote proposals regarding adoption or changes of policies addressed by the 1940 Act on a CASE-BY-CASE basis, considering the following factors:

•

Potential competitiveness

•

Regulatory developments

•

Current and potential returns

•

Current and potential risk

CMA generally will vote FOR these amendments as long as the proposed changes do not fundamentally alter the investment focus of the fund and do comply with current SEC interpretations.

Changing a Fundamental Restriction to a Non-fundamental Restriction:

CMA will vote on a CASE-BY-CASE basis proposals to change a fundamental restriction to a non-fundamental restriction, considering the following factors:

•

Fund’s target investments

•

Reasons given by the fund for the change

•

Projected impact of the change on the portfolio

Change Fundamental Investment Objective to Non-fundamental:

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Name Change Proposals:

CMA will vote on a CASE-BY-CASE basis proposals to change a fund’s name, considering the following factors:

•

Political/economic changes in the target market

•

Consolidation in the target market

•

Current asset composition

Change in Fund’s Subclassification:

CMA will vote on a CASE-BY-CASE basis proposals to change a fund’s subclassification, considering the following factors:

•

Potential competitiveness

•

Current and potential returns

•

Risk of concentration

•

Consolidation in target industry

Disposition of Assets/Termination/Liquidation:

CMA will vote on a CASE-BY-CASE basis these proposals, considering the following factors:

•

Strategies employed to salvage the company

•

Past performance of the fund

•

Terms of the liquidation

Changes to the Charter Document:

CMA will vote on a CASE-BY-CASE basis proposals to change the charter document, considering the following factors:

•

The degree of change implied by the proposal

•

The efficiencies that could result

•

The state of incorporation; net effect on shareholder rights

•

Regulatory standards and implications

CMA will vote FOR:

•

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CMA will vote AGAINST:

•

Proposals enabling the Board to:

•

Change, without shareholder approval the domicile of the fund

•

Adopt, without shareholder approval, material amendments of the fund’s declaration of trust or other organizational document

Changing the Domicile of a Fund:

CMA will vote on a CASE-BY-CASE basis proposals to reincorporate, considering the following factors:

•

Regulations of both states

•

Required fundamental policies of both states

•

The increased flexibility available

Authorizing the Board to Hire and Terminate Subadvisors Without Shareholder Approval:

Distribution Agreements:

CMA will vote these proposals on a CASE-BY-CASE basis, considering the following factors:

•

Fees charged to comparably sized funds with similar objectives

•

The proposed distributor’s reputation and past performance

•

The competitiveness of the fund in the industry

•

Terms of the agreement

Master-Feeder Structure:

CMA will vote FOR the establishment of a master-feeder structure.

Mergers:

CMA will vote merger proposals on a CASE-BY-CASE basis, considering the following factors:

•

Resulting fee structure

•

Performance of both funds

•

Continuity of management personnel

•

Changes in corporate governance and their impact on shareholder rights

Shareholder Proposals to Establish Director Ownership Requirement:

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Shareholder Proposals to Reimburse Shareholder for Expenses Incurred:

CMA will vote on a CASE-BY-CASE basis proposals to reimburse proxy solicitation expenses.

Shareholder Proposals to Terminate the Investment Adviser:

CMA will vote on a CASE-BY-CASE basis proposals to terminate the investment adviser, considering the following factors:

•

Performance of the fund’s NAV

•

The fund’s history of shareholder relations

•

The performance of other funds under the adviser’s management

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APPENDIX B

Conflicts of Interest Disclosure and Certification Form

Conflict Review Questionnaire for Proxy Voting Working Group Members and Other Individuals Participating in the Proxy Voting Decision-Making Process.


Issuer and Proxy Matter:

Do you or any member of your immediate family have an existing (or potential) business, financial, personal or other relationship with any management personnel of the issuer ¹ ?

Have you discussed this particular proxy proposal with anyone outside of Columbia Management’s investment group ² ?

Are you aware of any other potential personal conflicts of interest not described above? Please detail below.


Name:

Signed:

Date:

¹	Personal investing in the issuer by you or a member of your immediate family does not require an affirmative response to this item.

²	Communications with issuer or solicitors in the regular course of business would not have to be disclosed on this form.

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APPENDIX C

CMA Proxy Vote Recommendation/Proxy Committee Request Form


Name of Investment Associate:



Company Name:



Overview of Proxy Vote and Meeting Date:

Proxy Agenda Item(s)



Description of Item:

(The above information will be pre-populated by the Proxy Department.)

Recommendation (FOR, AGAINST, ABSTAIN) including brief rationale:

Please attach any supporting information other than analysis or reports provided by the Proxy Department.

Signed

Send Completed Forms to:

GWIM Investment Operations – Proxy Department

In the case of Proxy Votes to be referred to the Proxy Committee, submit this form and materials to the Chair of the Proxy Committee

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APPENDIX C — DESCRIPTION OF STATE CONDITIONS

STATE SPECIFIC INFORMATION

Each Fund’s investments are highly dependent on and sensitive to the general fiscal and economic stability of the state in which the Fund invests, as well as the general fiscal and economic stability of the state’s subdivisions, agencies, instrumentalities or authorities, which issue the securities in which the Fund invests. The following information supplements information set forth in each Fund’s prospectus, constitutes only a brief summary and does not purport to be a complete description of certain state-specific considerations and is provided to investors in view of each Fund’s policy of concentrating its investments in securities issued by issuers of a single state. The information is based on publicly available sources and has not been independently verified by the Adviser but is believed to be accurate in all material respects. It is expected that the information will be updated only on an annual basis and thus may be out of date at any time that you make an investment decision to purchase or sell shares of a Fund.

To the extent that any statements made below involve matters of forecasts, projections, assumptions, opinions or estimates, whether or not expressly stated to be such, they are made as such and not as representations of fact or certainty, and no representation is made that any of these statements has been or will be realized. All forecasts, projections, assumptions, opinions or estimates are “forward looking statements” that must be read with an abundance of caution and that may not be realized or may not occur in the future.

California

The following information relates specifically to the Columbia California Intermediate Municipal Bond Fund (the “Fund”). This summary does not purport to be a comprehensive description of all relevant facts. Although the Fund has no reason to believe that the information summarized below is not correct in all material respects, such information has not been independently verified for accuracy or thoroughness. Rather, this information has been obtained from official statements, prospectuses and other disclosure provided in connection with various securities offerings of the State of California (“California” or the “State”) and local agencies in California available as of the date of this Statement of Additional Information. Further, all estimates and projections contained in the following information should not be construed as statements of fact. They are based on assumptions that may be affected by numerous factors and there can be no assurance that such estimates and projections will be realized or achieved.

General Economic Factors .

The economy of the State is the largest among the 50 states and one of the largest in the world. The diversified economy of the State has major components in high technology, trade, entertainment, agriculture, tourism, manufacturing, construction and services. Certain of the State’s significant industries, such as high technology, are sensitive to economic disruptions in their export markets.

California, like the rest of the nation, is experiencing a severe economic recession. Falling home prices, limited credit availability, shrinking investment values and growing unemployment, among other circumstances, have adversely affected the national and California economies in 2008, and are continuing to adversely affect such economies in 2009. Consumer spending, which is a core component of both economies, and business investment declined in the second half of 2008 and continue to decline in 2009. Late in 2008, the United States was officially deemed to be in a recession that began in December 2007. Unemployment across a wide range of economic sectors accelerated during 2008 across the country and continues to rise. California’s unemployment rate increased from 6.1% at the beginning of 2008 to over 10% at the beginning of 2009.

California’s weak economy resulted in a dramatic reduction in State tax revenues as compared to projections made in connection with the adoption of the 2008 Budget Act (as defined below). In November and December of 2008, California’s Governor Schwarzenegger announced that new projections showed that, if no budget actions were taken, a budget gap between expected revenues and expenditure obligations would exceed

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$41 billion for the two fiscal years 2008-09 and 2009-10. In light of the projected budget gap, the Governor called a special session of the California Legislature in November 2008 and two fiscal emergency special sessions in December 2008. After protracted negotiations, the 2009 Budget Act was adopted by the California Legislature on February 19, 2009, and signed by the Governor on February 20, 2009. See “The California Budget” below.

The long delay between the identification of the budget gap and the enactment of the 2009 Budget Act, combined with severe disruptions in the municipal bond and other capital markets starting in the fall of 2008, prevented California from selling long-term bonds and limited its ability to sell short-term revenue anticipation notes. As a result of the cash pressure facing the State, on December 17, 2008, the State’s Pooled Money Investment Board (“PMIB”) voted to significantly curtail loans from the State’s Pooled Money Investment Account (“PMIA”), thereby postponing or stopping construction on thousands of projects Statewide. The PMIA customarily made such loans to provide temporary funding for infrastructure projects prior to permanent financing through the issuance of State general obligation bonds or lease revenue bonds.

The sharp decline in revenues at the beginning of the 2008-09 fiscal year resulted in a significant depletion of cash resources to pay California’s obligations. California’s State Controller, John Chiang (the “Controller”), is using cash management tools at his disposal to ensure that available cash resources will be used to pay the obligations of the highest priorities under the California Constitution and laws, including payments to public schools and universities and debt service on bonds and notes. On February 1, 2009, the Controller began to defer, for 30 days, payments from California’s general fund (the “General Fund”) of personal income and bank and corporate tax refunds, as well as payments for specified State operations, local assistance, vendors who do business with the State, trial courts and programs for the mentally ill, blind, disabled and elderly. While payments deferred in February 2009 have been repaid, California continues to face unprecedented cash flow pressures. Beginning on July 2, 2009, after California lawmakers failed to reach a budget agreement by the end of the 2008-09 fiscal year, the Controller began issuing registered warrants, also called IOUs, to pay certain of the State’s obligations. A registered warrant is a “promise to pay,” with interest, that can be issued by the State when there is not enough cash to meet all of the State’s payment obligations. The Controller expects to issue approximately $2.87 billion in registered warrants during the month of July 2009. If there is sufficient cash available at the time, the registered warrants will be paid by the California State Treasurer (the “Treasurer”) in October 2009; provided, however, that if the PMIB determines there is sufficient cash available for redemption of the registered warrants on an earlier date, the registered warrants may be redeemed earlier than October 2009. The interest rate on the registered warrants, which was set by the PMIB on July 2, 2009, is 3.75% per year.

Bond Ratings .

Three major credit rating agencies, Moody’s Investors Service (“Moody’s”), Standard and Poor’s Ratings Services (“S&P”) and Fitch Ratings (“Fitch”), assign ratings to California long-term general obligation bonds. The ratings of Moody’s, S&P and Fitch represent their opinions as to the quality of the municipal bonds they rate. It should be emphasized, however, that ratings are general and are not absolute standards of quality. Consequently, municipal bonds with the same maturity, coupon and rating may have different yields while obligations with the same maturity and coupon with different ratings may have the same yield.

In July 2009, Fitch lowered its rating assigned to California’s general obligation bonds from A-minus to BBB, and Moody’s lowered its rating assigned to California’s general obligation bonds from A2 to Baa1. S&P currently maintains it’s A rating on California general obligation bonds. All three rating agencies have California debt on a negative watch. It is not possible to determine whether or the extent to which Moody’s, S&P or Fitch will change its respective rating on California general obligation bonds in the future.

California’s general obligation bonds currently have lower ratings than all rated states in the nation. Lower ratings make it more expensive for the State to raise revenue and, in some cases, could prevent the State from issuing general obligation bonds in the quantity otherwise desired. Additional rating downgrades may negatively impact the marketability and price of securities in the Fund’s portfolio.

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California Finances .

California’s moneys are segregated into its General Fund and over 1,000 other funds, including special, bond and trust funds. The General Fund consists of revenues received by the State’s treasury (the “State Treasury”) and not required by law to be credited to any other fund, as well as earnings from the investment of State moneys not allocable to another fund. The General Fund is the principal operating fund for the majority of California’s governmental activities and is the depository of most of the major revenue sources of the State. The General Fund may be expended as a consequence of appropriation measures enacted by the California Legislature and approved by the Governor (including the annual Budget Act), as well as appropriations pursuant to various Constitutional authorizations and initiative statutes.

Special Fund for Economic Uncertainties . The State maintains a Special Fund for Economic Uncertainties (“SFEU”), which is funded with General Fund revenues and which was established to protect the State from unforeseen revenue reductions and/or unanticipated expenditure increases. The Controller may transfer amounts in the SFEU to the General Fund as necessary to meet cash needs of the General Fund and such transfers are characterized as “loans.” The Controller is required to return moneys so transferred without payment of interest as soon as there are sufficient moneys in the General Fund. At the end of each fiscal year, the Controller is required to transfer from the SFEU to the General Fund any amount necessary to eliminate any deficit in the General Fund. California’s Department of Finance has projected a $2.102 billion SFEU balance and total reserve on June 30, 2010, based on the 2009 Budget Act.

Budget Stabilization Account . Proposition 58, approved in March 2004 (“Proposition 58”), created the Budget Stabilization Account (“BSA”) as a second budgetary reserve. In accordance with Proposition 58, the Controller is required to transfer a specified portion of estimated annual General Fund revenues (up to 3%) into the BSA no later than September 30 of each fiscal year, unless the transfer is suspended or reduced as described in this paragraph. Such transfers are required to be continued until the balance in the BSA reaches $8 billion or 5% of the estimated General Fund revenues for that fiscal year, whichever is greater. The annual transfer requirement is reinstated whenever the balance in the BSA falls below the $8 billion or 5% target. The annual transfers can be suspended or reduced for a fiscal year by an executive order issued by the Governor no later than June 1 of the preceding fiscal year. The 2007, 2008 and 2009 Budget Acts provide the California Director of Finance (the “Director of Finance”) the authority to transfer moneys from the BSA back into the General Fund in an amount determined by the Director of Finance to be sufficient to ensure there is a prudent General Fund balance. Pursuant to such authority, the Director of Finance ordered the transfer of the entire balance of $1.495 billion from the BSA to the General Fund to address a fiscal emergency proclaimed by the Governor on January 10, 2008. Once moneys are transferred out of the BSA pursuant to such authority, they are not required to be replenished until a future fiscal year’s annual transfer, unless the California Legislature, by statute, directs additional funds to be transferred from the General Fund into the BSA. Notwithstanding the foregoing process for a budgetary transfer, the BSA may be used to make temporary loans to the General Fund, which loans must be repaid when the General Fund has available cash. In light of the condition of the General Fund on May 28, 2008, the Governor issued an executive order on such date suspending the fiscal year 2008-09 transfer of $3.018 billion from the General Fund to the BSA, as had been proposed in the 2008-09 Governor’s Budget (as defined below). In addition, due to a recent drastic decline in General Fund revenues, the 2009 Budget Act suspends the fiscal year 2009-10 transfer of $2.932 billion from the General Fund to the BSA.

The California Budget .

The Budget Process . California’s fiscal year begins on July 1 and ends on June 30 of the following year. The State’s General Fund budget operates on a legal basis, generally using a modified accrual system of accounting for its General Fund, with revenues credited in the period in which they are measurable and available and expenditures debited in the period in which the corresponding liabilities are incurred. The annual budget is proposed by the Governor by January 10 of each year for the next fiscal year (the “Governor’s Budget”) and revised in May of the same year (the “May Revision”). Under California law, the annual proposed Governor’s

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Budget cannot provide for projected expenditures in excess of projected revenues for the following fiscal year. Following the submission of the Governor’s Budget, the California Legislature considers the proposal. As required by the Proposition 58 and as described below, beginning with fiscal year 2004-05, the California Legislature may not pass a budget bill in which General Fund expenditures exceed estimated General Fund revenues and fund balances at the time of the passage and as set forth in the budget bill.

Under the California Constitution, money may be drawn from the State Treasury only through an appropriation made by law. The primary source of annual expenditure appropriations is the annual budget act (each, a “Budget Act”) as approved by the California Legislature and signed by the Governor. Each Budget Act must be approved by a two-thirds majority vote of each house of the California Legislature. The Governor may reduce or eliminate specific line items in a Budget Act or any other appropriations bill without vetoing the entire bill. Such individual line-item vetoes are subject to override by a two-thirds majority vote of each house of the California Legislature.

Appropriations also may be included in legislation other than a Budget Act. Except as noted in the previous paragraph and in the next sentence, bills containing General Fund appropriations must be approved by a two-thirds majority vote in each house of the California Legislature and be signed by the Governor. Bills containing appropriations for K-12 schools or community colleges require only a simple majority vote. Continuing appropriations, available without regard to fiscal year, may also be provided by statute or the California Constitution. Funds necessary to meet an appropriation are not required to be in the State Treasury at the time an appropriation is enacted; revenues may be appropriated in anticipation of their receipt.

The estimates and projections contained in the prior, current and future budgets discussed in the following paragraphs are based on a variety of assumptions. There can be no assurances that the financial condition of California or otherwise will not be further materially adversely affected by actual conditions or circumstances, including but not limited to lower than expected revenues or higher than expected expenditures.

Budgets for Fiscal Years Prior to Fiscal Year 2007-08 . During fiscal year 2001-02, following a half decade of strong economic and revenue growth, as the State and national economies fell into a recession and the stock markets dropped significantly, California experienced an unprecedented drop in revenues compared to the prior fiscal year largely due to reduced personal income taxes from stock option and capital gains activity. During the three fiscal years between fiscal year 2001-02 and fiscal year 2003-04, the State encountered severe budgetary difficulties due to reduced revenues and failure to make equivalent reductions in expenditures, resulting in successive budget deficits. The budgets for these fiscal years included substantial reliance on one-time measures, internal borrowing and external borrowing. The State also faced a cash flow crisis during this period, which was relieved by the issuance of revenue anticipation warrants in June 2002 and June 2003, and the issuance of Economic Recovery Bonds (“ERBs”) in the spring of 2004.

California’s economy rebounded during the 2004-05, 2005-06 and 2006-07 fiscal years, resulting in substantially higher General Fund revenues in each such fiscal year than had been projected at the start of the fiscal year. This allowed the budgets in these fiscal years to end with substantial positive balances (although the positive balance declined from approximately $9.9 billion at the end of fiscal year 2005-06 to approximately $3.5 billion at the end of fiscal year 2006-07). The State continued to utilize a combination of expenditure cuts, cost avoidance, internal and external borrowing, fund shifts and one-time measures, such as the securitization of tobacco settlement revenues and the sale of ERBs, to produce balanced budgets. The 2005 Budget Act relied much less on one-time measures than the budgets of the immediately preceding fiscal years, but did include receipt of $525 million from the refinancing of tobacco securitization bonds.

Final estimates relating to the 2006-07 fiscal year, as released in the 2007-08 Governor’s Budget in January 2008, showed that the State experienced more favorable results than were projected at the time the 2006 Budget Act was signed. As a result of revised estimates for fiscal years prior to 2005-06 and improved economic results, which generated increases in tax revenues, the General Fund balance at June 30, 2006, was estimated to be

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approximately $3.487 billion, of which $3.0 billion was in the SFEU, compared to the original 2006 Budget Act estimate of $1.6 billion in the SFEU.

Fiscal Year 2007-08 Budget . The 2007 Budget Act was adopted by the California Legislature on August 21, 2007, together with a number of implementing measures, and signed by the Governor on August 24, 2007. In approving the 2007 Budget Act, the Governor vetoed $943 million in appropriations from the General Fund, special funds and bond funds (including $703 million in General Fund appropriations). Under the 2007 Budget Act as originally enacted, General Fund revenues and transfers were projected to increase 6%, from $95.5 billion in fiscal year 2006-07 to $101.2 billion in fiscal year 2007-08. The 2007 Budget Act contained General Fund appropriations of $102.3 billion, compared to $101.7 billion in fiscal year 2006-07. The 2007 Budget Act also included the largest reserve of any Budget Act in the State’s history, a total of $4.1 billion. The reserve was made so large because the 2007 Budget Act disclosed a number of risks. By the time the 2008-09 Governor’s Budget was released on January 10, 2008, many of these risks had occurred, such that even the planned reserve was not expected to be sufficient to keep the budget in balance through June 30, 2008. Developments that occurred after enactment of the 2007 Budget Act included (but were not limited to) the following: (1) the deterioration of revenues below the estimates contained in the 2007-08 May Revision, primarily as a result of weaker economic conditions in the State, (2) payment from budget reserves of $500 million as a result of an adverse court ruling in August 2007 in a case involving delayed payments to the State Teachers’ Retirement Fund, (3) additional Proposition 98 spending, reflecting the lower property tax revenues reported by the schools, which did not support the assumptions in the 2007 Budget Act about property tax growth, and (4) potential impact on the General Fund reserve from a lawsuit challenging use of funds in the Public Transportation Account; that case is on appeal. See the discussion of Proposition 98 under the heading “Constitutional Provisions Affecting Revenues and Appropriations – Proposition 98.”

Fiscal Year 2008-09 Budget . The 2008 Budget Act was adopted by the California Legislature on September 16, 2008, together with a number of implementing measures, and signed by the Governor on September 23, 2008. In approving the 2008 Budget Act, the Governor vetoed $714 million in appropriations from the General Fund, special funds and bond funds (including $510 million in General Fund appropriations). This was the longest delay in adopting a budget in modern history.

The 2008 Budget Act, as originally enacted, resolved a $17.3 billion budget deficit (after implementation of $7.0 billion in actions taken during the February 2008 fiscal emergency special session of the California Legislature) identified in the 2008-09 May Revision. It provided a modest reserve of $1.7 billion for fiscal year 2008-09, but projected a deficit of $1.0 billion in fiscal year 2009-10. While the 2008 Budget Act did not resolve the State’s persistent structural budget deficit, it included a budget reform measure, which was subsequently defeated at the polls. Under the 2008 Budget Act, as originally enacted, General Fund revenues and transfers were projected to decrease 1%, from $103 billion in fiscal year 2007-08 to $102 billion in fiscal year 2008-09. The 2008 Budget Act contained General Fund appropriations of $103.4 billion, compared to $103.3 billion in fiscal year 2007-08. The June 30, 2009, total reserve was projected to be $1.7 billion, a decrease of $1.4 billion, or 45%, compared to the June 30, 2008, reserve.

Since the enactment of the 2008 Budget Act, economic conditions in the State have worsened considerably. The 2009-10 Governor’s Budget projected that the State would end fiscal year 2008-09 with no reserve, compared to the original estimate of $1.7 billion contained in the 2008 Budget Act. Subsequent projections prepared for the 2009 Budget Act estimated a total reserve deficit at June 30, 2009, of $3.4 billion, down $5.1 billion from the 2008 Budget Act estimate. The prior fiscal year’s resources balance in the 2009 Budget Act reflects a net loss of $1.6 billion for fiscal year 2008-09 as compared to the 2008 Budget Act, which loss is comprised of the following components: $452.6 million lower revenues in fiscal year 2007-08; $397.6 million increase in Proposition 98 expenditures in 2007-08; $1.551 billion increase in prior year Proposition 98 settle-up payments; $774.9 million decrease in prior year non-Proposition 98 expenditures; and $33.4 million increase to beginning balance for fiscal 2006-07 and prior adjustments.

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Fiscal Year 2009-10 Budget . The 2009 Budget Act was adopted by the California Legislature on February 19, 2009, together with a number of implementing measures, and signed by the Governor on February 20, 2009. In approving the 2009 Budget Act, the Governor vetoed $1.305 billion in appropriations from the General Fund, special funds and bond funds (including $957.2 million in General Fund appropriations). The 2009 Budget Act addresses the combined $41.6 billion deficit for fiscal years 2008-09 and 2009-10 identified in the 2009-10 Governor’s Budget. The budget cuts and revenue increases included in the 2009 Budget Act are scheduled to take effect either immediately or in a short amount of time (as new revenues are phased in) to address the projected deficit in both the 2008-09 and 2009-10 fiscal years.

Under the 2009 Budget Act, based on then-current assumptions about the State’s financial circumstances and assuming receipt of approximately $8 billion of federal stimulus funds to offset General Fund costs and voter approval of various ballot measures (which measures were all defeated, as discussed below), General Fund revenues and transfers are projected to increase 9.3%, from $89.4 billion in fiscal year 2008-09 to $97.7 billion in fiscal year 2009-10. The 2009 Budget Act contains General Fund appropriations of $92.2 billion, compared to $94.1 billion in fiscal year 2008-09, which represents a 2.1% decrease. The June 30, 2010, total reserve is projected to be $2.1 billion, which represents an increase of $5.5 billion compared to the estimated June 30, 2009, reserve deficit of $3.4 billion. The California Department of Finance Monthly Bulletin issued on March 13, 2009 (the “March DOF Bulletin”), stated that General Fund revenues for February 2009 were $898 million lower than projected in the 2009 Budget Act, comprised primarily of $437 million lower than expected personal income tax revenues, $334 million lower than expected sales and use tax revenues and $138 million lower than expected corporate tax revenues. In addition, according to the March DOF Bulletin, year-to-date adjusted revenues through February 2009 are $333 million below 2009 Budget Act projections. In a report entitled “The Fiscal Outlook Under the February Budget Package,” issued on March 13, 2009, the State’s Legislative Analyst’s Office (the “LAO”) projected that General Fund revenues in fiscal year 2009-10 will be approximately $8 billion lower than the amount projected in the 2009 Budget Act.

Many of the projections contained in the 2009 Budget Act depended on voter approval of several measures that were on a special election ballot on May 19, 2009. All such measures, however, were defeated. Moreover, economic conditions have worsened in the State since the adoption of the 2009 Budget Act. Prior to the May 19, 2009, special election, the State’s Department of Finance projected that if the measures on the special election ballot were defeated, a shortfall of $21.3 billion would occur with respect to the fiscal year 2009-10 budget and proposed, among other actions, to borrow up to 8% of the property tax revenues received by cities, counties and special districts in fiscal year 2008-09, as permitted under certain circumstances by Proposition 1A (as defined below). In addition, the LAO projected in May 2009 that the State will face significant cash flow deficits in every month between July 2009 and November 2009, which will require access to public credit markets in an amount of up to $23 billion or the adoption of additional cash measures or both in order to avoid further interruptions in State fiscal obligations. On July 2, 2009, the Governor announced that because a balanced budget was not passed by the California Legislature and signed by the Governor by June 30, 2009, the deficit had increased by approximately $2 billion for fiscal year 2009-10. Also on July 2, 2009, the Controller began issuing registered warrants to pay for some of the State’s expenses. See “General Economic Factors” above.

Actions that may be taken by California’s Legislature or Governor in the current or future years to address California’s current or future budget deficits cannot be predicted. Future California budgets will be affected by national and State economic conditions and other factors over which the Fund has no control. Additional information concerning California’s budget and financial condition may be obtained from the State’s Department of Finance website at http://www.dof.ca.gov, and California’s LAO at http://www.lao.ca.gov. Information provided on these websites is not incorporated as part of this Statement of Additional Information.

State Indebtedness .

The Treasurer is responsible for the sale of debt obligations of the State and its various authorities and agencies. The State has always paid the principal of and interest on its general obligation bonds, general

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obligation commercial paper notes, lease-purchase obligations and short-term obligations, including revenue anticipation notes and revenue anticipation warrants, when due.

General Obligation Bonds . The California Constitution prohibits the creation of general obligation indebtedness of the State unless a bond measure is approved by a majority of the electorate voting at a general election or a direct primary. General obligation bond acts provide a continuing appropriation from the General Fund of all debt service payments on general obligation bonds, subject only to the prior application of moneys in the General Fund to the support of the public school system and public institutions of higher education. Under the California Constitution, the appropriation to pay debt service on the general obligation bonds cannot be repealed until the principal of and interest on the bonds has been paid. Certain general obligation bond programs, called “self-liquidating bonds,” receive revenues from specified sources so that moneys from the General Fund are not expected to be needed to pay debt service, but the General Fund is liable as a back-up if the specified revenue source is not sufficient. The principal self-liquidating bond programs are (1) the ERBs, supported by a special sales tax, and (2) veterans general obligation bonds, supported by mortgage repayments from housing loans made to military veterans. As of February 1, 2009, the State had outstanding $56,112,384,000 aggregate principal amount of long-term general obligation bonds, of which $45,638,679,000 were payable primarily from the State’s General Fund, and $10,473,705,000 were self-liquidating bonds payable first from other special revenue funds. As of February 1, 2009, there were unused voter authorizations for the future issuance of $68,653,816,000 of long-term general obligation bonds, some of which may first be issued as commercial paper notes. Of this unissued amount, $1,341,710,000 is for veterans general obligation bonds payable first from other revenue sources.

Under California law, the State must pay the principal of any general obligation bonds (except for the ERBs) that are subject to optional or mandatory tender and that are not remarketed or, if applicable, purchased by financial institutions that provide liquidity support to the State. The State has not entered into any interest rate hedging contracts in relation to any of its variable rate general obligation bonds.

Commercial Paper Program . Some voter-approved general obligation indebtedness may be issued as commercial paper notes. Commercial paper notes may be renewed or may be refunded by the issuance of long-term bonds. It is currently the State’s policy to use commercial paper notes for a portion of the interim funding of voter-approved projects. The balance of such funding has in the past been done through internal loans from the PMIA. The State then issues long-term general obligation bonds from time to time to retire its general obligation commercial paper notes (and internal loans). Pursuant to the terms of the bank credit agreement presently in effect, the general obligation commercial paper program may have up to $2 billion in aggregate principal amount at any time. This maximum amount may be increased or decreased in the future. As of February 23, 2009, $1,322,450,000 aggregate principal amount of general obligation commercial paper notes were outstanding.

Lease-Purchase Obligations . In addition to general obligation bonds, the State builds and acquires capital facilities through the use of lease-purchase borrowing. Under these arrangements, the State Public Works Board, another State or local agency or a joint powers authority issues bonds to pay for the construction of facilities such as office buildings, university buildings or correctional institutions. Such facilities are leased to a State agency, the California State University, or the University of California under a long-term lease that provides the source of payment of the debt service on the lease-purchase bonds. In some cases, there is not a separate bond issue, but a trustee directly creates certificates of participation in the State’s lease obligation, which certificates of participation are then marketed to investors. Under applicable court decisions, such lease arrangements do not constitute the creation of “indebtedness” within the meaning of the California Constitutional provisions that require voter approval. Rental payments in connection with certain of the lease-purchase financings are payable from special funds rather than the General Fund. In addition, recent legislation provides California’s court system with increased fees to support up to $5 billion of lease-revenue bond authority to expand and repair its infrastructure to address significant caseload increases and reduce delays. California had $7,567,096,634 of General Fund-supported lease-purchase obligations outstanding as of February 1, 2009. The State Public Works Board, which is authorized to sell lease revenue bonds, had authorization to issue $11,545,829,281 in lease-

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purchase obligations as of February 1, 2009. In addition, as of February 1, 2009, certain joint powers authorities were authorized to issue approximately $81,000,000 of revenue bonds to be secured by State leases.

Non-Recourse Debt . Certain California agencies and authorities issue revenue obligations for which the General Fund has no liability. Revenue bonds represent obligations payable from State revenue-producing enterprises and projects, which obligations are not payable from the General Fund, and conduit obligations payable only from revenues paid by private users of facilities financed by the revenue bonds. The enterprises and projects include transportation projects, various public works projects, public and private educational facilities (including the California State University and University of California systems), housing, health facilities and pollution control facilities. State agencies and authorities had approximately $52 billion in aggregate principal amount of revenue bonds and notes that are non-recourse to the General Fund outstanding as of December 31, 2008.

Future Issuance Plans . Between November 2006 and February 2009, voters and the California Legislature authorized more than $60 billion of new general obligation bonds and lease revenue bonds, which are paid solely from the General Fund. This new authorization substantially increased the current amount of such General Fund-supported debt authorized and unissued to approximately $78.9 billion as of February 1, 2009. In order to address the expenditure needs for these new authorizations, along with those which existed before 2006, the State has increased the volume of issuance of both of these categories of bonds substantially, compared to previous years, starting in fiscal year 2007-08. The amounts and timing of future issuance of general obligation and lease revenue bonds will depend on a variety of factors, including the actual timing of expenditure needs for the various programs for which such bonds are to be issued, the amount and timing of interim financing provided to the programs, the interest rate and other market conditions at the time of issuance and the timing and amounts of additional general obligation bonds or lease revenue bonds that may be approved. The Governor has proposed substantial additional general obligation bond programs. Because of the uncertainties presently associated with the above factors, it is not possible to provide specific projections of issuance amounts for the current fiscal year and the next several fiscal years, but the Treasurer anticipates the level of issuance will increase over the averages of the past several fiscal years in order to address the backlog of authorized bonds.

Based on the current Department of Finance projections of program expenditure needs, without taking into account any future authorizations that may occur, the aggregate amount of outstanding general obligation and lease revenue bonds is expected to increase to approximately $100 billion by the middle of the next decade, compared to the current total outstanding amount of approximately $63.7 billion. The annual debt service costs on this amount of debt is estimated to be approximately $8.7 billion, compared to approximately $5.05 billion budgeted in fiscal year 2008-09. These estimates do not include ERBs, as described below, nor do they take into account potential benefits from future refunding opportunities.

Economic Recovery Bonds . Proposition 57, referred to as the “California Economic Recovery Bond Act,” was approved by the voters on March 2, 2004 (the “ERB Act”). The ERB Act authorized the issuance of up to $15 billion in ERBs to finance the negative General Fund reserve balance as of June 30, 2004 and other General Fund obligations undertaken prior to June 30, 2004. Repayment of the ERBs is secured by a pledge of revenues from a one-quarter cent increase in the State’s sales and use tax that became effective July 1, 2004. In addition, as voter-approved general obligation bonds, the ERBs are secured by the State’s full faith and credit and payable from the General Fund in the event the dedicated sales and use tax revenue is insufficient to repay the bonds. In May and June of 2004, California issued $10.896 billion principal amount of ERBs, resulting in the deposit of net proceeds to the General Fund of approximately $11.254 billion (of which, for budgetary purposes, approximately $9.242 billion was applied to the 2002-03 fiscal year and approximately $2.012 billion was applied to offset fiscal year 2004-05 General Fund expenditures). In order to relieve cash flow and budgetary shortfalls identified in the 2008-09 Governor’s Budget, the State issued approximately $3.179 billion of additional ERBs on February 14, 2008, generating net proceeds of $3.313 billion, which were transferred to the General Fund. No further ERBs can be issued under the ERB Act, except for any refunding bonds that may be issued in the future. (The Department of Finance had determined that the full $15 billion voter authorization could not be issued because of the previous repayment of certain June 30, 2004, obligations eligible for financing pursuant to the ERB Act.)

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Three different sources of funds are required to be applied to the early retirement (generally by purchase or redemption) of ERBs: (i) all proceeds from the dedicated quarter cent sales tax in excess of the amounts needed, on a semi-annual basis, to pay debt service and other required costs of the bonds, (ii) all proceeds from the sale of surplus State property, and (iii) 50% of each annual deposit, up to $5 billion in the aggregate, of deposits in the BSA. As of December 31, 2008, funds from these sources have been used for early retirement of approximately $3.5 billion of ERBs through December 31, 2008, including $1.495 billion that was transferred from the BSA in fiscal years 2006-07 ($472 million) and 2007-08 ($1.023 billion). The Governor suspended the 2008-09 BSA transfer and the 2009 Budget Act suspends the 2009-10 BSA transfer due to the condition of the General Fund. In addition, due to the sharp reduction in taxable sales as a result of the current economic recession, the special sales tax revenues dedicated to repayment of the ERB debt have decreased to a level that provides very little coverage above the required debt service amounts. This caused the State to have to temporarily draw on a reserve fund for the ERBs in the amount of $13.3 million on December 24, 2008, to fill a debt service account for January 1, 2009, as required under the master indenture for the ERBs; provided, however, that the reserve fund was replenished the next day with sales tax receipts that were received on that day. The reduced coverages and need to access the reserve fund have resulted in a lowering of the ratings of the ERBs by all three major rating agencies. It is not yet known whether special sales tax revenues in the current or future periods will be adequate to pay all debt service and related obligations of the ERBs without resort to the reserve fund.

Tobacco Settlement Revenue Bonds . In 1998, the State signed a settlement agreement with the four major cigarette manufacturers. Under the settlement agreement, the participating manufacturers agreed to make payments to the State in perpetuity, which payments are expected to total approximately $25 billion (subject to adjustments) over the first 25 years. In 2002, pursuant to the Tobacco Securitization Law (Chapter 414, Statutes of 2002), the California Legislature authorized the establishment of a special purpose trust with the authority to issue revenue bonds secured by the tobacco settlement revenues received beginning in the 2003-04 fiscal year. An initial sale of 56.57% of the State’s tobacco settlement revenues producing $2.485 billion in proceeds was completed in January 2003 (“Series 2003A Bonds”). A second sale of the remaining 43.43% of the State’s tobacco settlement revenues, which produced $2.264 billion in proceeds, was completed in September 2003 (“Series 2003B Bonds”). A 2003 amendment to the Tobacco Securitization Law requires the Governor to request an appropriation from the General Fund in the annual Budget Act to pay debt service and other related costs of the tobacco settlement revenue bonds secured by the second (and only the second) sale of tobacco settlement revenues when such tobacco settlement revenues are insufficient therefor. The California Legislature is not obligated to make any such requested General Fund appropriation.

In August 2005, the Series 2003B Bonds were refinanced with refunding bonds (the “Series 2005A Bonds”), which Series 2005A Bonds retained substantially all of the covenants of the original issue, including the covenant regarding the request for a General Fund appropriation in the event tobacco settlement revenues fall short. In return for providing this covenant, the State was paid a credit enhancement fee of $525 million as part of the refinancing, which fee was deposited into the General Fund. In March 2007, the State completed a refunding of all of the Series 2003A Bonds. This refunding generated additional proceeds of approximately $1.258 billion that are intended to be used (i) to offset the General Fund cost for the initial years of a litigation settlement related to the 2004-05 suspension of the Proposition 98 guarantee and (ii) for other purposes, such as funding capital projects. Some of these moneys have been used for General Fund expenses in fiscal year 2007-08.

As a result of assertions made by the cigarette manufacturers regarding market share losses, the tobacco settlement revenues due to the State were reduced in April 2006 by $50.9 million, in April 2007 by $44 million, and in April 2008 by $33.9 million. Nevertheless, the amount of tobacco settlement revenues received in 2006, 2007 and 2008 were in excess of the required debt service payments for the related bonds. Tobacco settlement revenue bonds are neither general nor legal obligations of the State or any of its political subdivisions and neither the faith and credit nor the taxing power nor any other assets or revenues of the State or of any political subdivision is or shall be pledged to the payment of any such bonds; provided, however, that, in connection with the issuance of the Series 2005A Bonds, the State covenanted to request the California Legislature for a General Fund appropriation in the event tobacco settlement revenues are insufficient to pay debt service on such

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Series 2005A Bonds. Tobacco settlement revenues have been sufficient to pay debt service with respect to all of the bonds secured by tobacco settlement revenues to date and, therefore, the State’s covenant to request an appropriation has never been invoked.

Cash Flow Borrowings . As part of its cash management program, California has regularly issued short-term obligations to meet cash flow needs. The State has issued revenue anticipation notes (“RANs” or “Notes”) in 20 of the last 21 fiscal years to partially fund timing differences between receipts and disbursements, as the majority of General Fund revenues are received in the last part of the fiscal year. RANs mature prior to the end of the fiscal year of issuance. If additional external cash flow borrowings are required, the State has issued revenue anticipation warrants (“RAWs), which can mature in a subsequent fiscal year. RANs and RAWs are both payable from any “Unapplied Money” in the General Fund of the State on their maturity date, subject to the prior application of such money in the General Fund to pay Priority Payments. “Priority Payments” are payments as and when due to: (i) support the public school system and public institutions of higher education (as provided in Section 8 of Article XVI of the California Constitution); (ii) pay principal of and interest on general obligation bonds and general obligation commercial paper notes of the State; (iii) provide reimbursement from the General Fund to any special fund or account to the extent such reimbursement is legally required to be made to repay borrowings therefrom pursuant to the California Government Code; and (iv) pay State employees’ wages and benefits, State payments to pension and other State employee benefit trust funds, State Medi-Cal claims, lease rentals to support lease revenue bonds and any amounts determined by a court of competent jurisdiction to be required by federal law or the California Constitution to be paid with State warrants that can be cashed immediately.

Inter-fund Borrowing . Inter-fund borrowing is used to meet temporary imbalances of receipts and disbursements in the General Fund. All money so borrowed must be returned to the special fund from which it was transferred as soon as there is sufficient money in the General Fund to do so. Transfers cannot be made that will interfere with the objective for which such special fund was created or from certain specific funds. In general, when moneys transferred to the General Fund in any fiscal year from any special fund pursuant to the inter-fund borrowing mechanism exceed 10% of the total additions to such special fund as shown in the statement of operations of the preceding fiscal year as set forth in the Controller’s annual report, interest must be paid on such excess at a rate determined by the PMIB to be the current earning rate of the PMIA. This provision does not apply to temporary borrowings from the BSA or other accounts within the General Fund. As of June 30, 2008, there were approximately $12.8 billion in outstanding internal loans.

Sources of Tax Revenues .

In fiscal year 2007-08, approximately 90% of the State’s General Fund revenues and transfers were derived from personal income taxes, corporation taxes and sales and use taxes. The following are brief summaries of the major sources of tax revenues in California.

Personal Income Tax . The California personal income tax, which accounted for 53% of General Fund revenues and transfers in fiscal year 2007-08, is closely modeled after the federal income tax law. It is imposed on net taxable income (gross income, less exclusions and deductions), with rates ranging from 1% to 9.3%. The personal income tax is adjusted annually by the change in the consumer price index to prevent taxpayers from being pushed into higher tax brackets without a real increase in income. Personal, dependent and other credits are allowed against the gross tax liability. In addition, taxpayers may be subject to an alternative minimum tax (“AMT”), which is much like the federal AMT. The personal income tax structure is considered to be highly progressive. For example, California’s Franchise Tax Board indicates that the top 1% of taxpayers paid 47.9% of the total personal income tax in tax year 2006.

Taxes on capital gains realizations, which are largely linked to stock market performance, can add a significant dimension of volatility to personal income tax receipts. Capital gains tax receipts accounted for as much as 14.8% and as little as 4.5% of General Fund revenues over the past 10 years. The 2009 Budget Act

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estimates that capital gains will account for 5.6% of General Fund revenues and transfers in fiscal year 2008-09 and 4.7% of such revenues and transfers in fiscal year 2009-10.

Sales and Use Tax . The sales and use tax (sometimes referred to herein as the “sales tax”), which accounted for 26% of General Fund revenues and transfers in fiscal year 2007-08, is imposed on retailers for the privilege of selling tangible personal property in California. Most retail sales and leases are subject to the sales and use tax. However, exemptions have been provided for certain essentials such as food for home consumption, prescription drugs, gas delivered through mains and electricity. Other exemptions provide relief for a variety of sales ranging from custom computer software to aircraft.

The California use tax is imposed at the same rates as the regular sales tax on consumers of tangible personal property that is used, consumed or stored in the State. Use tax applies to purchases from out-of-state vendors that are not required to collect tax on their sales. Use tax also applies to most leases of tangible personal property.

Corporation Tax . The corporation tax accounted for 12% of General Fund revenues and transfers in fiscal year 2007-08. Corporation tax revenues are derived from the following taxes: (1) the franchise tax and the corporate income tax, which are levied at an 8.84% rate on profits; (2) an additional 2% tax on the net income of banks and other financial corporations; (3) the AMT, which is imposed at a rate of 6.65%; (4) a minimum franchise tax of up to $800 imposed on certain corporations subject to the franchise tax; (5) a 1.5% tax on profits of sub-Chapter S corporations; and (6) fees paid by limited liability companies, which account for approximately 2.8% of corporation tax revenue.

Tax Amnesty Program . In 2004, the California Legislature passed a tax amnesty program (Chapter 226, Statutes of 2004) for tax year 2002 and prior years. Penalties were waived for taxpayers who applied for the amnesty during the amnesty period of February 1, 2005 to March 31, 2005, with respect to personal income tax, corporate tax and sales and use tax. The effect of amnesty has been to distort the accounting for General Fund revenues, because payments for years before the current year are accounted for as a “prior year adjustment” for the current year rather than being carried back to those earlier years. Additionally, since some payments were made in advance of future year payments, the revenue estimates in the current year, the budget year and beyond will be lower despite the fact that the payments received are accounted for as “prior year adjustments” to the current year. Moreover, much of the money that was received during the amnesty period was in the form of “protective payments,” amounts submitted to avoid the extra penalty, but that would have otherwise been submitted in future years, or that will prove not to have been due at all, as some taxpayers will win their disputes. These refunds must be accounted for in future years. For budgetary purposes, revenues from the amnesty program resulted in a carry-over adjustment increasing the beginning General Fund balance for fiscal year 2004-05 by $3.8 billion. This carry-over adjustment was reduced in fiscal years 2004-05 through 2007-08 and will be further reduced in subsequent fiscal years to account for refunds and the recognition of income over a period of time. The estimates of these adjustments have varied as more up-to-date information has been received. The net multi-year General Fund revenue gain from the amnesty program has been estimated at $380 million, which was used for one-time purposes in the 2005 Budget Act.

Insurance Tax . The majority of insurance written in California is subject to a 2.35% gross premium tax. For insurers, this premium tax takes the place of all other State and local taxes except those on real property and motor vehicles. Exceptions to the 2.35% rate are certain pension and profit-sharing plans, which are taxed at 0.5%, surplus lines and non-admitted insurance, which are taxed at 3%, and ocean marine insurers, which are taxes at 5% of underwriting profits. The California Board of Equalization ruled in December 2006 that the premium tax insurers pay should be calculated on a cash basis rather than the accrual method required by the California Department of Insurance. This ruling is expected to result in a total loss of $349 million spread over several years, and the impact has been estimated to be $28 million in fiscal year 2008-09, $200 million in fiscal year 2009-10 and $121 million in fiscal year 2010-11.

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Estate Tax; Other Taxes . The California estate tax is based on the State death tax credit allowed against the federal estate tax. The California estate tax is designed to pick up the maximum credit allowed against the federal estate tax return. The federal Economic Growth and Tax Relief Reconciliation Act of 2001 (the “Economic Growth and Tax Relief Reconciliation Act”) phases out the federal estate tax by 2010, which resulted in the reduction of the State estate tax revenues by 25% in calendar year 2002, 50% in calendar year 2003, and 75% in calendar year 2004, and the elimination of the State estate tax beginning in calendar year 2005. The provisions of this federal act sunset after 2010, at which time the federal estate tax will be reinstated along with the State’s estate tax, unless future federal legislation is enacted to make the provisions permanent.

Other General Fund major taxes and licenses include inheritance and gift taxes, cigarette taxes, alcoholic beverage taxes, horse racing license fees and trailer coach license fees.

Taxes on Tobacco Products . As a result of Proposition 99, approved by the voters in 1988, and Proposition 10, approved by the voters in 1998, the State imposes an excise tax on cigarettes of $0.87 per pack and the equivalent rates on other tobacco products. Tobacco product excise tax revenues are earmarked as follows: (1) $0.50 is deposited in the California Children and Families First Trust Fund and are allocated primarily for early childhood development programs; (2) $0.25 is allocated to the Cigarette and Tobacco Products Surtax Fund, which moneys are appropriated for anti-tobacco education and research, indigent health services and environmental and recreation programs; (3) $0.10 is allocated to the State’s General Fund; and (4) the remaining $0.02 is deposited into the Breast Cancer Fund.

Constitutional Provisions Affecting Revenues and Appropriations .

The following are brief summaries of the major constitutional and legislative actions that have affected tax levying and collections by State and local governments in California:

Article XIIIA . In 1978, California voters approved Proposition 13, which enacted Article XIIIA of the California Constitution (“Article XIIIA”) and which, as amended, generally caps the maximum real property tax that may be imposed on real property to 1%, caps annual increases in assessed property values at 2%, permits reassessment to market value only on sale (subject to certain exemptions), and requires local governments to obtain the approval of two-thirds of the electorate to impose special taxes (taxes imposed for specific purposes). Article XIIIA also gave the California Legislature responsibility for allocating the remaining proceeds of the property tax.

Article XIIIB . In 1979, California voters approved Proposition 4, the so-called “Gann Initiative,” which added Article XIIIB to the California Constitution (“Article XIIIB”). Article XIIIB was amended by the voters in June 1990 through their approval of Proposition 111. Article XIIIB limits the annual appropriations of the State and of any city, county, school district, authority or other political subdivision of the State to the level of the appropriations limit for the prior fiscal year, as adjusted annually for changes in the cost of living, population and cost of services rendered by the governmental entity. The “base year” for establishing such appropriation limit is fiscal year 1978-79. Increases in appropriations by a governmental entity are also permitted (i) if financial responsibility for providing services is transferred to the governmental entity, or (ii) for emergencies, so long as the appropriations limits for the three years following the emergency are reduced to prevent any aggregate increase above the Constitutional limit. Decreases are required where responsibility for providing services is transferred from the government entity.

Appropriations of an entity of local government subject to Article XIIIB include generally any authorization to expend during the fiscal year the proceeds of taxes levied by the State or other entity of local government, exclusive of certain State subventions, refunds of taxes, benefit payments from retirement, unemployment insurance and disability insurance funds. Appropriations subject to limitation pursuant to Article XIIIB do not include debt service on indebtedness existing or legally authorized as of January 1, 1979, on bonded indebtedness thereafter approved according to law by a vote of the electors of the issuing entity voting in an election for such

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purpose, appropriations required to comply with mandates of courts or the federal government, appropriations for qualified capital outlay projects and appropriations by the State of revenues derived from any increase in gasoline taxes and motor vehicle weight fees above January 1, 1990, levels. “Proceeds of taxes” include, but are not limited to, all tax revenues and the proceeds to any entity of government from (i) regulatory licenses, user charges and user fees to the extent such proceeds exceed the cost of providing the service or regulation, (ii) the investment of tax revenues and (iii) certain State subventions received by local governments. Article XIIIB includes a requirement that if an entity’s revenues in any year exceed the amount permitted to be spent, the excess must be returned by revising tax rates or fee schedules over the subsequent two fiscal years.

Proposition 62 . In 1986, California voters approved Proposition 62 (“Proposition 62”), which requires a super-majority approval of local government taxes. Two-thirds of the local entity’s legislative body and a majority of its electorate must approve any tax for general governmental purposes, and two-thirds of the electorate must approve any special tax for specific purposes.

Proposition 98 . In 1988, California voters approved Proposition 98 (“Proposition 98”) as an amendment to the California Constitution, which, as modified by Proposition 111, guarantees K-12 schools and community colleges a minimum share of General Fund revenues. Proposition 98 permits the California Legislature, by a two-thirds vote in both houses and with the Governor’s concurrence, to suspend the minimum funding formula for a one- year period. The fiscal year 2004-05 budget suspended the level of Proposition 98 spending by setting a statutory funding target approximately $2 billion lower than the Constitutional guarantee. This suspended amount was fully paid in fiscal year 2005-06. However, subsequent growth in General Fund revenues increased the fiscal year 2004-05 Proposition 98 amount by an additional $1.6 billion, bringing the total value of the legislative suspension to $3.6 billion. Because the Proposition 98 minimum guarantee is calculated based on prior-year funding, the fiscal year 2005-06 funding level was also affected by the increased revenues and was $1.1 billion less than the statutory target levels. This suspended amount is added to the existing maintenance factor, or the difference between Proposition 98 guarantees and actual appropriations. The unpaid additional funding requirements were the subject of a lawsuit by the California Teachers Association, which has been settled. The State agreed to retire the $2.8 billion obligation with a $300 million payment in fiscal year 2007-08 and further annual payments of $450 million beginning in fiscal year 2008-09 until the entire obligation is repaid. The total estimated maintenance factor balance was $65.5 million at the end of fiscal year 2007-08, which maintenance factor balance is required to be restored in future years as economic conditions improve.

Article XIIIC and Article XIIID . In 1996, California voters approved Proposition 218, entitled the “Right to Vote on Taxes Act” (“Proposition 218”), which enacted Article XIIIC (“Article XIIIC”) and Article XIIID (“Article XIIID”) to the California Constitution. Article XIIIC and Article XIIID contain a number of provisions affecting the ability of local agencies to levy and collect both existing and future taxes, assessments, fees and charges. The interpretation and application of certain provisions of Proposition 218 will ultimately be determined by the courts with respect to some of the matters discussed below. It is not possible at this time to predict with certainty the future impact of such interpretations.

Article XIIIC requires that all new local taxes be submitted to the electorate before they become effective. Taxes for general governmental purposes require a majority vote and taxes for specific purposes, even if deposited in a general fund, require a two-thirds vote. Article XIIIC further provides that any general purpose tax imposed, extended or increased without voter approval after December 31, 1994, may continue to be imposed only if approved by a majority vote in an election which must be held within two years of November 5, 1996. Article XIIIC also expressly extends the initiative power to give voters the power to reduce or repeal local taxes, assessments, fees and charges, regardless of the date such taxes, assessments, fees and charges were imposed. Article XIIIC expands the initiative power to include reducing or repealing assessments, fees and charges, which had previously been considered administrative rather than legislative matters and therefore beyond the initiative power. This extension of the initiative power is not limited by the terms of Article XIIIC to fees imposed after November 6, 1996, and, absent other legal authority, could result in the retroactive reduction in any existing taxes, assessments, fees or charges. “Assessments,” “fees” and “charges” are not defined in Article XIIIC, and it

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is unclear whether these terms are intended to have the same meanings for purposes of Article XIIIC as for Article XIIID described below. If not, the scope of the initiative power under Article XIIIC potentially could include any general fund local tax, assessment or fee not received from or imposed by the federal or State government or derived from investment income.

Article XIIID also added several new provisions relating to how local agencies may levy and maintain “assessments” for municipal services and programs. These provisions include, among other things, (i) a prohibition against assessments which exceed the reasonable cost of the proportional special benefit conferred on a parcel, (ii) a requirement that the assessment must confer a “special benefit,” as defined in Article XIIID, over and above any general benefits conferred, and (iii) a majority protest procedure which involves the mailing of a notice and a ballot to the record owner of each affected parcel, a public hearing and the tabulation of ballots weighted according to the proportional financial obligation of the affected party. “Assessment” is defined in Article XIIID to mean any levy or charge on real property for a special benefit conferred on the real property.

Proposition 1A . On November 2, 2004, California voters approved Proposition 1A (“Proposition 1A”), which amended the California Constitution to reduce the State’s authority over major local government revenue sources. Under Proposition 1A, the State may not (i) reduce local sales tax rates or alter the method of allocating the revenue generated by such taxes, (ii) shift property taxes from local governments to schools or community colleges, (iii) change how property tax revenues are shared among local governments without two-third approval of both houses of the California Legislature, or (iv) decrease vehicle license fee revenues without providing local governments with equal replacement funding. Beginning, in fiscal year 2008-09, Proposition 1A permits the State to shift a limited amount of local government property tax revenue to schools and community colleges if certain conditions are met, including: (a) a proclamation by the Governor that the shift is needed due to a severe financial hardship of the State and (b) approval of the shift by the California Legislature with a two-thirds vote of both houses. In the event of such a shift, the State is required to repay local governments for their property tax losses, with interest, within three years. Proposition 1A does allow the State to approve voluntary exchanges of local sales tax and property tax revenues among local governments within a county. Proposition 1A also amends the California Constitution to require the State to suspend certain State laws creating mandates in any year that the State does not fully reimburse local governments for their costs to comply with the mandates; provided, however, that such provision does not apply to mandates relating to schools or community colleges or to mandates relating to employee rights.

The purpose of Proposition 1A is to increase and stabilize local government revenues. Proposition 1A could also, however, result in decreased resources being available for State programs. Such a decrease, in turn, could affect actions taken by the State to resolve budget difficulties, including increasing State taxes, decreasing spending on certain State programs or even suspending or otherwise circumventing Proposition 1A in order to appropriate local government revenues.

Future Initiatives . Article XIIIB, Article XIIIC, Article XIIID, Proposition 62, Proposition 98 and Proposition 1A were each adopted as measures that qualified for the ballot pursuant to the State’s Constitutional initiative process. From time to time other initiative measures could be adopted, affecting the ability of the State to increase or apply revenues and to make or increase appropriations.

Litigation .

The State is continually a party to numerous legal proceedings, many of which could have an adverse impact on the State’s financial condition. Pending litigation currently includes, but is not limited to, cases involving issues related to taxes, environmental matters, health care, tribal gaming, transportation, education, and the State’s prison system, all of which, if decided adversely to California, could result in significant General Fund expenditures or otherwise impact the ability of the State to raise revenues.

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Local Governments.

The primary units of local government in California are the 58 counties (the “Counties”), which range in population from approximately 1,100 in Alpine County to approximately 10 million in Los Angeles County. Counties are responsible for providing many basic services within the State, including indigent health care, welfare, jails and public safety in unincorporated areas. There are also 480 incorporated cities in California and thousands of special districts formed for education, utilities and other services. The fiscal condition of local governments has been constrained since Proposition 13, which added Article XIIIA to the State Constitution, was approved by California voters in 1978. Proposition 13 reduced and limited the future growth of property taxes and limited the ability of local governments to impose “special taxes” (i.e., taxes devoted to a specific purpose) without two-thirds voter approval. Proposition 218, which enacted additional Constitutional amendments in 1996, further limited the ability of local governments to raise taxes, fees and other exactions. See “Constitutional Provisions Affecting Revenues and Appropriations – Article XIIIA ” and “– Article XIIIC and Article XIIID” above.

Counties, in particular, have had fewer options to raise revenues than many other local government entities, while they have been required to maintain many services. In the aftermath of the approval of Proposition 13, the State provided aid to local governments from the General Fund to make up some of the loss of property tax moneys, including assuming principal responsibility for funding K-12 schools and community colleges. During the recession of the early 1990s, the California Legislature reduced the post-Proposition 13 aid to local government entities, other than K-12 schools and community colleges, by requiring cities and counties to transfer some of their property tax revenues to school districts. However, the California Legislature also provided additional funding sources, such as sales taxes, and reduced certain mandates for local services funded by cities and counties.

The 2004 Budget Act, related legislation and the enactment of Proposition 1A in 2004 dramatically changed the state-local fiscal relationship. These constitutional and statutory changes implemented an agreement negotiated between the Governor and local government officials (the “state-local agreement”) in connection with the 2004 Budget Act. One change related to the reduction of the vehicle license fee (“VLF”) rate from 2% to 0.65% of the market value of the applicable vehicle. In order to protect local governments, which had previously received all VLF revenues, the 1.35% reduction in VLF revenue to cities and counties from this rate change was offset by an increase in the amount of property tax revenues received by the cities and counties. This worked to the benefit of local governments, because the such offset amounts annually increased in proportion to the growth in secured roll property tax revenues, which had historically grown at a higher rate than VLF revenues. This arrangement continues without change in the 2009 Budget Act. See “Constitutional Provisions Affecting Revenues and Appropriations – Proposition 1A ” for a discussion of the effect of Proposition 1A on local government finances.

Pursuant to statutory changes made in conjunction with the 2009 Budget Act, the VLF rate will increase from 0.65% to 1.15% effective May 19, 2009. Of this 0.50% increase, 0.35% will flow to the General Fund and 0.15% will support various law enforcement programs previously funded by the General Fund. This increased VLF rate will be effective through the 2010-11 fiscal year.

Economic, Political, Social and Environmental Conditions.

Changes in economic, political, social or environmental conditions on a local, State, federal and/or international level may adversely affect California’s financial condition, as well as investment risk generally. Such conditional changes may include (but are not limited to) fluctuations in business production, consumer prices or financial markets, unemployment rates, technological advancements, shortages or surpluses in natural resources or energy supplies, changes in law, social unrest, fluctuations in the crime rate, political conflict, acts of war or terrorism, environmental damage and natural disasters.

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Georgia

Located in the southeastern region of the United States, the State of Georgia (“Georgia” and the “State”) has experienced substantial growth over the last several decades. Since 1960, the population of Georgia has more than doubled, currently making Georgia the country’s ninth most populated state. Between 2000 and 2008, Georgia grew by an estimated 1,498,932 people, a growth rate of 18.3%, fourth fastest in the nation, and fastest east of the Mississippi River. (2008 Census estimate: 9,685,744). From 2007 to 2008, 14 of Georgia’s counties ranked among the nation’s 100 fastest-growing, second most in the nation.

Georgia’s economy is fairly diversified, with private sector employment almost equally spread between manufacturing, services, wholesale sales and retail sales, with concentrations in manufacturing, trade, transportation and utilities, information technology, and professional and business services. During the second half of the 20 ^th century, this diversity allowed Georgia to experience almost continuous economic growth, while other states more dependent upon a single business sector experienced some periods of economic contraction. However, during the last several years, this diversity has been unable to fully insulate Georgia’s economy from the nationwide economic downturn that occurred in 2002-2004 and the one which is currently occurring in 2008-2009.

One area of where this economic diversity, in combination with Georgia’s population growth, and its effects on the local economy can be seen is Georgia’s labor market. Historically, Georgia has enjoyed an unemployment rate significantly at or below the national average. However, as of May 2009, unemployment rate stood at 9.6% compared to the national average of 9.4%. The foregoing notwithstanding, even in this economic downturn, Georgia is generally viewed as having a better economic outlook compared to the rest of the country. According to Moody’s Economy.com Risk of Recession Index, the likelihood of a recession in Georgia in six months is at 27%, the 10th lowest probability among the 50 states.

Historically, most of the job growth in Georgia has been in the Atlanta MSA. However, over the last several years, there has been great emphasis placed upon developing other parts of the State, so that these areas can begin to reap the economic benefits traditionally limited to the Atlanta MSA. One example of this is the OneGeorgia Authority, which is discussed below. Those efforts have begun to bear fruit, as for the last several years, the statewide growth rate has exceeded the Atlanta MSA growth rate. This trend continues to hold even in this economic downturn, as over the past year (June 2008 – June 2009), the Atlanta MSA has experienced a decrease of 6% in total employment, while the remainder of the State has experienced a smaller decrease of 5%.

One reason that Georgia has a better economic outlook is because of its location, which affords its residents and businesses easy access to commercial centers throughout the world. It is thought that as business and consumer confidence grows, centers of transportation and logistics will gain as inventories get restocked and goods are shipped. This will increase traffic at the centers of air and rail transport and trucking, such as Georgia.

For ground transportation, the capital city of Atlanta is one of the few major US cities with 3 interstate highways. As a result, Georgia manufacturers and distributors are within 2 truckload days of 82% of the US industrial market.

Since 1998, Hartsfield-Jackson (the “Airport”) has been the busiest passenger airport in the world, serving over 90,039,280 passengers in 2008 through 31 carriers, with destinations to over 245 cities in over 57 countries. Atlanta is within a two hour flight of 80% of the United States population. The current economic downturn has negatively impacted the Airport, as of May 2009, the number of domestic travelers fell 0.57% over the prior year, while international passengers fell by 6.7%. This downward trend is expected to be short-lived, as annual Airport passenger traffic is anticipated to increase to 121,000,000 by 2015.

The Airport also has over 2,000,000 square feet of cargo warehouse space. In addition to the main cargo complexes, the Airport houses a USDA approved Perishables Complex, the only one in the Southeastern U.S.

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The Perishables Complex features on-site distribution and transport capabilities, USDA inspection services and a USDA approved fumigation chamber. The Airport is also the only airport in the Southeast to be approved by the USDA to apply cold treatment, which is an environmentally safe alternative to methyl bromide.

This infrastructure enabled the Airport to handle more than 655,277 metric tons of cargo in 2008 (a decrease of 9% from 2007); international cargo also decreased from 399,121 to 365,351 metric tons in 2008. These same trends have continued throughout the first five months of 2009, with total freight tonnage down 25.5% compared to the previous year.

To facilitate the projected increase in usage, the Airport is in the ninth year of a ten year improvement project, which is the largest such project in the history of the State of Georgia. The program was originally budgeted at $5.4 billion over a ten-year period, but due to project delays and increased construction costs, the total is now projected to be over $9 billion The centerpiece of this expansion is the building of a fifth runway, which opened on May 16, 2006, and is expected to significantly reduce air traffic congestion. The fifth runway is expected to increase the capacity for landings and take-offs by 40%, from an average of 184 flights per hour to 237 flights per hour.

One factor which could impact the Airport’s future operations is the operations of Delta Airlines. Delta, the dominant carrier in Atlanta, filed bankruptcy on September 14, 2005 and emerged on April 30, 2007. Since emerging from bankruptcy, Delta has enjoyed limited financial success. For the quarter ending June 30, 2009, Delta’s net profit was $191 million, excluding merger-related expenses and $390 million in realized fuel hedge losses. Furthermore, during this quarter, Delta generated $834 million in operating cash flow and had $5.4 billion in unrestricted liquidity. However, due to the recession, decreased demand and rising oil prices, in June 2009, Delta filed applications to receive federal subsidies for air service to eight communities in the Midwest and Southeast, as the prolonged recession has made continuing service to these communities less economically viable.

Delta’s future does remain positive since Delta completed its merger with Northwest Airlines in October 2008, to form the world’s largest commercial carrier with 786 aircraft. Thanks to the merger, Delta is expected to have $17.7 billion enterprise value. Furthermore, through the first half of 2009, Delta has achieved more than $200 million in synergy benefits from its merger with Northwest Airlines. This consolidation process is expected to be complete by early 2010.

Finally, with respect to water transport, Georgia has two significant deepwater ports, Savannah and Brunswick, as well as two inland barge operations, Columbus and Bainbridge. Like the Airport, these ports have also experienced a significant increase in traffic. Out of 361 ports in the U.S., Savannah is now the fourth largest (and fastest growing) container port in the country; while Brunswick is the number six auto port in the nation. For FY2008, the Port of Savannah’s total exports exceeded one million TEUs for the first time in Georgia Ports Authority’s history. However, through the first five months of 2009, total TEU trade was down 19.3% compared to the previous year.

Also like the Airport, Georgia’s water ports are currently involved in significant capital improvement projects. The Brunswick Deepening Project was completed in 2007 (deepening the mean water depth to 36 feet), as was the preliminary work for the Savannah Harbor Expansion Project. The latter project is expected to be complete by 2012 (2 years prior to the Panama Canal expansion) and will deepen Savannah Harbor from 42 feet to 48 feet. The expansion of the Panama Canal and the Savannah Harbor will allow much larger container ships, twice the capacity of current vessels, to access the Savannah port.

These factors have all contributed to Georgia’s significant link to the global economy, which is recognized by the 10 international banks with offices in the State as well as over 50 countries that have consular, trade, or chamber of commerce offices in Atlanta, including most recently, the country of Brazil, which opened a new consulate in Atlanta in February 2008. More than 1,600 internationally-owned facilities representing 39 countries

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are located in Georgia. Georgia’s status as an international player was reaffirmed by the holding of the G-8 Summit in Sea Island, Georgia on June 8-14, 2004. In 2008, Georgia ranked 13 ^th among states in total value of exports with $27.5 billion in value, up 18% over the previous year.

In spring of 2008, in an effort to boost its global reputation, Georgia opened the Beijing Georgia Business Advisory Center, LLC. The center is working closely with Governor Perdue, the Georgia Department of Economic Development (“GDEcD”) and local communities to further advance the Georgian economy. Furthermore, GDEcD began a “Global Georgia” program which intends to promote Georgia within the international community and prioritize international business development.

Georgia has been successful in attracting international business. In 2008, among 321 company announcements, 16.5% were international projects or direct foreign investment, with international investors ranging from Spain to Korea. Kia Motor Co. (“Kia”), a South Korean automaker, is continuing with its construction of a new automobile assembly plant in West Point, Troup County, Georgia, which is located off Interstate 85 near the Georgia-Alabama border. The $1.2 billion facility will produce 300,000 cars a year and will create about 2,893 jobs at the plant. Also, seven supplier companies are expected to locate near the facility and are expected to employ approximately 3,600 workers. The plant is expected to begin production in December 2009, and it is hoped that its opening will help offset the job loss incurred during the recent closings of Ford’s plant in Hapeville, Georgia and General Motors’ assembly plant in Doraville, Georgia.

The State continues to remain focused on the expansion of business within its borders. Recently, Georgia has been ranked among the top 10 states in which to do business by Site Selection magazine’s executive survey (#10) and CNBC (#10). Furthermore, in May 2009, for the 5 ^th straight year Pollina Corporate Real Estate ranked Georgia in the top ten (#8) among pro-business states. Finally, Forbes magazine recently designated Georgia as the 5 ^th best state for business, moving up 10 spots from the previous year. Georgia was only one of three states that finished top 10 in four of the six categories that were factored into the study which includes: economic climate, growth prospects, labor supply and regulatory environment. New businesses that have relocated or expanded in Georgia in 2008 include: Kumho Tire, Sewon Precision, EFACEC Group and Procter & Gamble, hiring 450, 700, 606 and 166 persons respectively.

Many domestic companies are also relocating its operations to Georgia. In June 2009, NCR Corp., which produces ATMs, cash registers and retail self-checkout machines, announced that it would be moving its headquarters to Duluth, Georgia along with 1,250 jobs. NCR has also announced that it would be hiring 870 employees for their new manufacturing facility in Columbus, Georgia. The company said it chose Georgia after an “extensive analysis” of potential locations based on the nature of the local workforce, infrastructure, financial incentives and government tax structures.

As mentioned above, historically much of this economic largesse has centered around the capital city of Atlanta. However, recently the State government has taken several steps to ensure that the other areas of Georgia share in this growth. Of particular note is the OneGeorgia Authority (the “Authority”). Established in 2000 and funded with a portion of the State’s recovery in the nationwide tobacco litigation settlement, the Authority was created to provide financial assistance to development projects targeted to assist Georgia’s economically distressed areas. It is anticipated that the Authority will invest over $1.6 billion over the term of the tobacco settlement. Unfortunately, due to the economic downturn, the fund for OneGeorgia Authority’s rural development program was cut from the FY 2010 budget.

The State government of Georgia and its elected officials have historically adopted a very conservative fiscal approach. This approach has resulted in the State having one of the lowest debt levels, per capita, in the United States. In 2007, Georgia had the 3 ^rd lowest state per-capita debt and 4th lowest instate debt as a percent of personal income. As a result, Georgia is one of seven states to maintain a triple “A” bond rating by all three major rating agencies (see below).

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General obligation bonds are typically issued by the State pursuant to Article VII, Section IV of the Constitution of the State of Georgia (the “Georgia Constitution”), which provides that such bonds are the direct and general obligations of the State. The operative language is set forth in Article VII, Section IV, Paragraph VI of the Georgia Constitution which provides:

“The full faith, credit and taxing power of the State are hereby pledged to the payment of all public debt incurred under this article and all such debt and the interest on the debt shall be exempt from taxation (emphasis added). . .”

The Georgia Constitution further obligates the Georgia General Assembly to “raise by taxation and appropriate each fiscal year…such amounts as are necessary to pay debt service requirements in such fiscal year on all general obligation debt.” The Georgia Constitution also establishes a special trust fund (the “State of Georgia General Obligation Debt Sinking Fund”), which is used for the payment of debt service requirements on all general obligation debt.

The Georgia Constitution also establishes certain limitations upon the amount of debt that the State can incur. In particular, Article VII, Section IV, Paragraph II(b) of the Georgia Constitution provides that, except in certain emergency situations (i.e., in times of war or to cover a temporary budget shortfall) the State may not incur additional debt if, in that fiscal year or any subsequent year, the cumulative annual debt service for both general obligation debt and guaranteed revenue debt (including the proposed debt) will exceed 10% of the total revenue receipts, less refunds, for the prior fiscal year. The Georgia Constitution prevents State departments and agencies from circumventing these debt limitation provisions by prohibiting them from executing contracts that may be deemed to constitute a security for bonds or other public obligations. (See Article VII, Section IV, Paragraph IV of the Georgia Constitution.)

As mentioned above, the State may incur “public debt to supply a temporary deficit in the State treasury in any fiscal year created by a delay in collecting the taxes of that year. Such debt shall not exceed, in the aggregate, 5% of the total revenue receipts, less refunds, of the State treasury in the fiscal year immediately preceding the year in which such debt is incurred.” (See Georgia Constitution, Article VII, Section IV, Paragraph I(b).) However, since this provision was enacted, the State has never had to exercise this power.

Virtually all debt obligations represented by bonds issued by the State of Georgia, counties or municipalities or other public subdivisions, and public authorities require validation by a judicial proceeding prior to the issuance of such obligation. The judicial validation makes these obligations incontestable and conclusive, as provided under the Georgia Constitution. (See Article VII, Section VI, Paragraph VI of the Georgia Constitution).

As of June 30, 2008, the State had total outstanding bonded debt of $9,545,352,000. While this represented a substantial increase over the prior year ($8,726,912,000), the State remained well below the 10% threshold at 5.5%. As a result, as of June 30, 2009, the State maintained credits ratings of Aaa, AAA, and AAA from Moody’s Investor Services, Fitch Investor Services, L.P., and Standard and Poor’s Corporation, respectively.

The State of Georgia operates on a fiscal year beginning on July 1 and ending on June 30. Each year the State Economist, the Governor and the State Revenue Commissioner jointly prepare a revenue forecast upon which is based the State budget which is considered, amended, and approved by the Georgia General Assembly.

To protect the State in the event of a decline in State revenues, and reflective of its conservative fiscal approach, in 1976 the Georgia General Assembly established the Revenue Shortfall Reserve. This reserve is funded by surplus revenue collections, and its existence was instrumental in helping the State weather the nationwide economic downturn during FY2002-FY2004. During those 3 years, the State was able to cover revenue shortfalls by drawing monies from this reserve (approximately $680 million over the 3 year period) rather than raising taxes or cutting vital services. With the end of the economic downturn in FY 2005, the State

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then began to replenish the reserve, so that at the end of FY 2007, the reserve had a balance in excess of $1.6 billion (exceeding the pre-FY2002 balance). Unfortunately, due to the economic downturn, this upward trend was reversed in FY 2008, with the Revenue Shortfall Reserve balance at the end of the year being reduced to $1.21 billion.

This reserve increase was funded by the State experiencing substantial increases in revenue collections. For FY2007, Georgia experienced a 7.5% increase over prior year collections ($17,600,126,000 versus $16,366,132,000). This increase cut across all major areas of revenue collection including Individual Income Tax (up 9.4%), Corporate Income Tax (up 17.9%), Sales and Use Tax (up 3.6%), Motor Fuel Taxes (up 20.0%) and Property Taxes (up 4.9%).

Unfortunately, this trend reversed in the latter half of FY 2008, such that for the year State revenue collections were down by $189,975,000 (down 1.1%) from FY2007 levels. Although Individual Income Taxes (up 0.3%), Property Taxes (up 4.3%), and Motor Fuel Taxes (up 7.7%) were up from the previous year, this gain was offset by the loss in Corporate Income Taxes (down 7.5%), and Sales and Use Taxes (down 2.3%). With the economic downturn in FY2008, the Revenue Shortfall Reserve saw a decrease of $521 million, resulting in a balance of $1.21 billion.

For FY2009, the State experienced even more decrease in revenue collections. Total revenue collections were down by $1,830,818,000 (down 10.5%) from FY2008 levels. The effect in the various subareas showed an overall decrease, as Individual Income Taxes (down 12.2%), Motor Fuel Taxes (down 14.8%), Corporate Income Taxes (down 26.3%) and Sales and Use Taxes (down 7.6%) were down from FY 2008 levels. The only areas that saw some increase in revenue collection was in Property Taxes (up 1.9%) and Alcohol Beverages Tax (up 1.2%).

On May 13, 2009, Governor Sonny Perdue signed the state’s $18.6 billion FY 2010 budget, $2.5 billion less than the original FY 2009 budget. Furthermore, in response to the continued decline in State revenues, on July 21, 2009, Governor Sonny Perdue issued a directive to most state agencies to cut 5% from their fiscal 2010 budget.

One continued positive source of revenue for the State has been the Georgia Lottery Corporation. Established in 1992, the State uses profits from the lottery to fund numerous education-based initiatives, including a voluntary, state-wide pre-Kindergarten education program and the HOPE Scholarship Program (for post-secondary education). In FY2009, Georgia Lottery transferred $872,082,000 to the State Treasury’s Lottery for Education Account, the largest educational transfer in Georgia Lottery Corporation’s history.

One significant byproduct of the HOPE Scholarship Program has been the substantial increase in the percentage of college educated adults. In 1999, only 21% of Georgia’s population had a college degree, far below the national average. Ten years later, 28% of the population has a college degree, on par with the national average.

Personal income is a second key indicator of economic conditions in Georgia. Total personal income, relative to that of the U.S., has been growing despite the economic downturn. For fiscal year 2008, Georgia’s personal income grew by 4.9%, compared to 5.3% for the nation as a whole. Although personal income growth fell behind the national average, Georgia’s personal income growth outpaced the national average in the last 2 quarters.

Georgia has also undergone significant political change during this time. In November 2002, the State elected its first Republican Governor since Reconstruction. In addition, in light of significant election gains, as well as the well-publicized switch of political parties by several State Senators, the Republican Party gained control of the State Senate. This trend continued in 2004, as the Republican Party gained control of the State House and a second Republican Senator was elected (making it the first time since Reconstruction that Georgia

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had 2 Republican Senators). The 2008 election continued this trend as the Republican Party maintained control of the State House and the State Senate.

Significant Contingent Liabilities

In response to a written request from the State Auditor, the Law Department for the State identified the following material litigation, claims and assessments as of June 30, 2008:

A civil action has been filed against the Teachers’ Retirement System of Georgia (“TRS”) seeking additional benefits retroactive to the time of their retirement dates for a class of retirees who elected survivorship options and who retired between 1983 and February 1, 2003. Plaintiffs allege that the failure of TRS to use updated mortality tables resulted in miscalculations of monthly benefits and therefore additional monies are due to plaintiffs for underpayment of benefits. The plaintiff class numbers approximately 15,000. The Superior Court granted summary judgment for TRS; however, the judgment was reversed on appeal by the Georgia Supreme Court in October 2006. The case was remanded back to the trial court to determine liability to plaintiffs and whether any part of their claim was barred by applicable statute of limitations. The court ruled on February 29, 2008, for the plaintiffs citing a twenty-year statute of limitations and awarding interest and attorneys’ fees. The judgment is being appealed by both TRS and the plaintiffs. TRS is appealing the twenty-year statute of limitations and the attorney fees. The plaintiffs are appealing the interest rate granted. Also on February 29, 2008, the Court issued an uncontested claims order using a six-year statute of limitations. The Georgia Court of Appeals heard oral argument on these issues on September 10, 2008, but has not yet issued its ruling. The ultimate liability to TRS cannot be reasonably estimated as it is impacted by certain variables that are uncertain until the final decision by the Court, most notably, the applicable statute of limitations and any applicable interest rates on such liability. During fiscal year 2008, TRS paid approximately $93 million in retroactive benefits and attorneys’ fees on the uncontested claims order using a six-year statute of limitations. A liability of $100 million has been accrued in fiscal year 2007 for such claims. TRS has recorded an estimated additional liability of approximately $377 million using the twenty-year statute of limitations ruling and interest rates used during that time period. This amount is recorded in accounts payable and other accruals in the accompanying statement of fiduciary net assets as of June 30, 2008. Although the ultimate liability may vary from the amount recorded, management believes that it will not have a material impact on the financial statements.

In a related case, in January 2007, multiple retirees filed a civil action against the Employees’ Retirement System of Georgia (“ERS”) in Fulton County Superior Court which set forth exactly the same issues as were presented in the TRS case described above. This case will be heard after the TRS case has concluded, the parties having agreed that the TRS rulings will apply in this case as well. The ultimate potential liability is impacted by certain variables that are uncertain until the final decision by the Court, most notably the applicable statute of limitations and any applicable interest rates on such liability. As such, management cannot reasonably estimate the potential possible outcomes and therefore has not recorded a liability on the statement of fiduciary net assets. Although the ultimate liability cannot be estimated at this time, management believes that it will not have material adverse effect on the financial statements.

In an additional related case, in August 2008, multiple retirees filed a civil action against the Public School Employees Retirement System (“PSERS”) in Fulton County Superior Court which set forth exactly the same issues as were presented in the TRS case described above. This case will be heard after the TRS case has concluded, the parties having agreed that the TRS rulings will apply in this case as well. The ultimate potential liability is impacted by certain variables that are uncertain until the final decision by the Court, most notably the applicable statute of limitations and any applicable interest rates on such liability. As such, management cannot reasonably estimate the potential possible outcomes and therefore has not recorded a liability on the statement of fiduciary net assets. Although the ultimate liability cannot be estimated at this time, management believes that it will not have material adverse effect on the financial statements.

A suit was filed in July 2007, against the Department of Revenue asserting a claim for the Port Tax Credit. The plaintiff asserts that its increase in imports through Georgia ports during the tax years 2002 through 2004

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inclusive qualifies the plaintiff to receive a credit-based income tax refund. The total credit claimed is in excess of $50 million, although the amount of refund for each taxable year is capped with excess credits carrying forward to subsequent tax years. The State has answered the complaint asserting that the plaintiff does not satisfy the statutory requirements to qualify for the credit. Discovery in this case is complete and the parties anticipate filing a consent scheduling order and cross-motions for summary judgment on stipulated facts.

A suit was filed in Fulton County Superior Court in September 2007, against the Department of Revenue, seeking a sales tax refund of $10 million. It involves a legal issue decided in the Department’s favor in a previous case which was filed December 2, 2005, to obtain a $2 million refund. The plaintiff’s application for discretionary appeal in the first lawsuit was denied by the Georgia Court of Appeals. The issues in the second case are fully briefed, and a decision is pending.

A suit has been filed against the Department of Transportation (“DOT”) by a plaintiff alleging two breach of contract causes of action related to price escalations of asphalt. The plaintiff also alleges a claim under the Prompt Payment Act. DOT filed an answer on May 7, 2008. The case is currently in discovery and the plaintiff has not stated an amount of damages.

DOT is the condemnor in numerous pending property condemnations which are at various stages of procedure. It is not currently reasonable to evaluate the potential loss on a case by case basis. Based on historical trend analysis it is reasonably possible that certain of the numerous lawsuits will be found in favor of the condemnees and that DOT will be bound to pay additional sums awarded by the judgments over the amount estimated by DOT and paid into court when DOT filed the condemnation. It is believed that additional awards of the pending condemnation lawsuits, in the aggregate, could be between $80 million and $120 million.

A class action lawsuit filed in June 2002, on behalf of 2,200 children in State custody asserted systemic deficiencies in foster care in Fulton and DeKalb counties. A consent decree was entered wherein the Department of Human Resources (“DHR”) agreed to make a number of specific system-wide management and infrastructure reforms. The District Court appointed two independent accountability agents to monitor DHR’s progress and awarded attorneys’ fees to the plaintiffs in the amount of $10.5 million. DHR appealed the award of attorneys’ fees to the Eleventh Circuit Court of Appeals. On July 3, 2008, the Court of Appeals affirmed the entire award. However, the majority opinion noted that the panel grudgingly affirmed the $4.5 million multiplier applied by the district court because they were bound by Eleventh Circuit precedent which may conflict with that of the United States Supreme Court. In light of the tone of the majority and concurring opinions, DHR filed a petition for rehearing en banc in the Eleventh Circuit which was denied on November 5, 2008. The next level of appeal would be application for a Writ of Certiorari to the U.S. Supreme Court.

Maryland

Risks of Concentration . The following information as to certain state specific considerations is given to investors in view of the Fund’s policy of concentrating its investments in Maryland issuers. This information supplements the information in the prospectus. This information constitutes only a brief summary, does not purport to be a complete description and is based on information from official statements relating to securities offerings of the State of Maryland (“State”) and other sources that are generally available to investors as of July 22, 2009. While generally believed to be accurate, we have not independently verified the information in this summary and will not be updating it during the year. Estimates and projections are based upon assumptions which could be affected by many factors and there can be no assurance that such estimates and projections will prove, or continue, to be accurate.

Unless stated otherwise, the ratings indicated are for obligations of the State and are current as of July 22, 2009; there can be no assurance that these ratings will not change. Bonds issued by Maryland’s political subdivisions and other issuers of tax-exempt bonds may have different ratings which are unrelated to the ratings assigned to State bonds. Similarly, conduit bonds issued for private borrowers have ratings which are unrelated to the ratings assigned to State bonds.

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The State and Its Economy . According to the 2000 Census, Maryland’s population on April 1 of that year was 5,296,486, an increase of 10.8% from the 1990 Census. Maryland’s population is concentrated in urban areas. Approximately 86.9% of Maryland’s population lives in the densely populated Baltimore-Washington region. Per capita income in 2008 was $48,091 in Maryland, compared to the national average of $39,751 in that year. Per capita income in Maryland increased at an annual rate of 3.5% in 2008, higher than the national average of 2.9%.

Maryland’s economy is more reliant on the service and government sectors than the nation as a whole, while the manufacturing sector is much less significant in Maryland than it is nationwide. As one of the wealthier states, in Maryland a greater share of personal income is derived from dividends, interest and rent, and a lesser share comes from transfer payments. Maryland’s economy is also particularly sensitive to changes in federal employment and spending. The percentage of personal income earned from federal and military employment in 2008 was 9.8% for Maryland residents, compared to 3.7% nationwide. Maryland’s unemployment rate has been lower than the rest of the country for the past ten years, while the labor force in Maryland grew faster than the rest of the country during the expansion years of 2005 and 2006. In 2008, the unemployment rate in Maryland was 4.4%, as compared to a national unemployment rate of 5.8%. In June 2009 these rates had increased to 7.3% in Maryland and 9.5% in the United States as a result of the ongoing recession.

The outlook for Maryland’s economy has declined along with expectations for the national economy. Even taking into account the impact of the American Recovery and Reinvestment Act of 2009 (“ARRA”), the State and Maryland local governments are expecting reduced sales and income tax receipts. As a result, the State expects a budget shortfall of more than $700 million for fiscal year 2010.

State Fiscal Information . The Maryland Constitution requires the State to enact a balanced budget for each of its fiscal years, which run from July 1 to June 30. Maryland’s fiscal year 2008 ended with a $487.1 million general fund balance on a budgetary basis and $684.8 million in the Revenue Stabilization Account of the State Reserve Fund and other reserve funds. General fund revenues on a budgetary basis realized in the State’s fiscal year 2008 were below estimates by $71.2 million, or 0.5%. On a GAAP basis, the fiscal year 2008 reserved general fund balance was $1,388.2 million, while the unreserved, designated and undesignated, fund balances were $538.0 million and $959.4 million, respectively; these balances compare to the reserved general fund balance of $2,373.7 million, and unreserved, designated and undesignated, fund balances of $195.1 million and $690.2 million, respectively, at the end of fiscal year 2007. The Revenue Stabilization Account of the State Reserve Fund provides financial support for future needs of the State and is intended to reduce the need for future tax and other revenue increases. However, the State can move funds in the Revenue Stabilization Account to cover other areas of its budget, and has done so recently. As described below, over the last few years the State has needed to make transfers from the State Reserve Fund to pay for operating shortfalls, in addition to enacting cuts in expenditures.

2009 Budget. On April 5, 2008 the General Assembly approved the budget for fiscal year 2009. The fiscal year 2009 budget includes, among other things: (1) funds for the State’s retirement and pension systems consistent with the “corridor” methodology of funding as prescribed by statute; (2) $5,959.8 million in aid to local governments from general funds reflecting full funding of public school assistance enhancements enacted at the 2002 Session of the General Assembly, as amended (“Thornton”); (3) $16.2 million for capital projects; (4) $231.5 million to the State Reserve Fund; and (5) deficiency appropriations of $77.5 million for fiscal year 2008. The $231.5 million for the State Reserve Fund included $146.5 million to the Revenue Stabilization Account and $85.0 million in the Dedicated Purpose Account for transfer to the Maryland Transportation Authority for transportation projects. Transfers from the State Reserve Fund to the General Fund totaled $125.0 million.

The fiscal year 2009 budget also included funds for a 2% employee cost of living adjustment, merit increases, and a statutory match for contributions to deferred compensation. In addition, the fiscal year 2009 budget provided $62.8 million in general funds and $44.7 million in non-general funds for past employment non-pension (“OPEB”) liabilities.

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Subsequent Events. Following enactment of the fiscal year 2009 budget, the Board of Revenue Estimates decreased its 2009 general fund revenue estimate by $1,292.7 million ($431.9 million in September 2008, $415.3 million in December 2008 and $445.5 million in March 2009). In order to close the gap between anticipated revenues and budgeted expenditures, the Governor proposed, and the Board of Public Works approved, expenditure reductions totaling $364.3 million in October 2008 and March 2009. The October reductions included reductions in aid to local governments, a decrease in the transfer to the Dedicated Purpose Account of the State Reserve Fund for transportation projects, a $46.1 million reduction in the amount for OPEB liabilities, and $217.2 million in other reductions to State agencies. Expenditures were reduced by $67.1 million in March 2009, including $34.1 million in savings from furloughing State employees and $9.2 million in savings from abolishing vacant positions.

As part of the fiscal year 2010 budget plan, the General Assembly enacted the Budget Reconciliation and Financing Act of 2009 (the “2009 Act”), legislation that authorized various transfers and funding changes resulting in increased general fund revenues and decreased general fund appropriations. The 2009 Act authorized transfers to the General Fund of $380.2 million from accounting reserves and $414.4 million from various special fund balances including $137.1 million in transfer tax revenues, $73.0 million from the Dedicated Purpose Account of the State Reserve Fund, $52.7 million from the Helicopter Replacement Fund, $29.0 million from the University System of Maryland, $28.0 million from the Injured Worker’s Insurance Fund actuarial liability reserve for claims against the State, and $17.0 million from the Trauma Fund. The 2010 budget plan also increased the transfer from the Revenue Stabilization Account of the State Reserve Fund to the General Fund by $45.0 million for a total of $170.0 million in fiscal year 2009.

Based on the Board of Revenue Estimates March 2009 general fund revenue estimate and actions enacted by the General Assembly in the 2009 session, it was estimated that the general fund balance on a budgetary basis at June 30, 2009 would be $437.1 million.

In June 2009, the Bureau of Revenue Estimates reported that 2009 general fund revenues will likely fall approximately $400.0 million short of the estimate; however, the State expects to end fiscal year 2009 with a positive general fund balance.

2010 Budget. On April 13, 2009, the General Assembly approved the budget for fiscal year 2010. The fiscal year 2010 budget includes, among other things: (1) funds to the State’s retirement and pension systems consistent with the “corridor” methodology of funding as prescribed by statute; (2) $5,745.7 million in aid to local governments from general funds reflecting full funding of the Thornton public school assistance program; (3) $139.9 million to the State Reserve Fund; and (4) deficiency appropriations of $273.0 million for fiscal year 2009.

As described above, as part of the fiscal year 2010 budget plan, the General Assembly enacted the 2009 Act, which provides for transfers to the General Fund in fiscal year 2010 of $216.3 million, including $31.0 million of transfer tax revenues and $161.9 million from the local share of highway user revenues. The 2009 Act and other legislative actions cumulatively decrease fiscal year 2010 revenues by $24.8 million, taking into effect projected decreases resulting from the impact of ARRA on individual income taxes.

Reductions to required fiscal year 2010 general fund appropriations include $34.0 million in aid to community colleges; $24.0 million due to modifications in the local jail reimbursement program; $16.1 million representing a decrease in the State share (from 80% to 70%) of the cost of placing students with special needs in non-public establishments; and $11.8 million reflecting the elimination of a State match of employee contributions to the deferred compensation plan. The fiscal year 2010 budget does not include funds for any employee cost of living adjustment or merit increases.

The fiscal year 2010 budget includes $139.9 million for the Revenue Stabilization Account of the State Reserve Fund. The required payment of $63.0 million from the Dedicated Purpose Account to the Maryland

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Transportation Authority for transportation projects was reduced and funded with general obligation bonds instead. Transfers from the State Reserve Fund to the General Fund total $210.0 million in fiscal year 2010.

Subsequent Events . As referenced above, on June 2009, the Bureau of Revenue Estimates reported that 2009 general fund revenues will likely fall approximately $400.0 million short of the March 2009 estimate. In July 2009 the Governor proposed $280.0 million in General Fund budget reductions and other budget actions to the Board of Public Works and intends to propose future budget reductions as necessary in order to maintain a balanced 2010 fiscal year budget. The proposed cuts were approved by the Board of Public Works and included, among other things $40 million in higher education cuts, $34 million in reduced Medicaid payments, and $75 million resulting from an enhanced federal Medicaid match.

Federal stimulus funding. ARRA provides support for the states, including the State, by funding infrastructure, education programs, human services programs, and providing discretionary funds. ARRA provides $4.1 billion in formula funding to Maryland governments. Of this amount, almost $2.5 billion was appropriated by the 2009 General Assembly. ARRA grants to Maryland provide $396.0 million for educational programs, $765.2 million for infrastructure programs, and $546.2 million for other programs. These funds provide additional federal support and do not supplant general funds. ARRA also includes $101.8 million in grants to local governments and aid organizations that are not appropriated in the State budget. These funds will be distributed directly to the local governments and aid organizations.

ARRA also provides federal grants for which State and local governments must compete, including grants to support law enforcement, habitat conservation, and the arts. It is uncertain how much of these funds the State or Maryland local governments will receive.

ARRA’s most significant impact for Maryland is the $2.3 billion that can support State general fund commitments. These funds support Medicaid, education, and discretionary State spending; the funds are used in the place of general funds to sustain State funding from fiscal years 2009 to 2011. When the funds are no longer available, the State will need to replace the funds or reduce spending.

Other fiscal challenges facing Maryland. At the same time, the State and local governments are addressing the financial burden of additional state and local infrastructure needs resulting from the United States Base Realignment and Closure (BRAC) program. As part of BRAC, a substantial number of military families and private sector workers will relocate to Maryland. These additional households, estimated to potentially total 45,300 starting in 2009, will require schools, housing, transportation and other services. BRAC relocations are resulting in increased expenditures at both the State and local levels, although recent spending cuts made by the State may impact cut the funding for some of these expenditures and may result in either greater borrowing or delays in implementation of the needed infrastructure. The short term financial impact of BRAC relocations, while generally perceived to be favorable in the long term, cannot yet be determined.

The State also has a substantial unfunded actuarial liability, estimated to be approximately $10.7 billion as of June 30, 2008 or 101.9% of payroll, on the pension plans guaranteed by the State. Other retirement programs administered by the State also are experiencing material shortfalls. In addition, after several years of analysis of the State’s OPEB liabilities, the State has determined that the State’s unfunded actuarial accrued liability for OPEB liabilities was $14.7 billion as of June 30, 2008; the amount held in trust to pay OPEB liabilities was $124.4 million as of that date. A commission formed in 2006 to develop a plan with respect to the State’s OPEB liabilities reported in an Interim Report released in December 2008 that, in its view, Maryland cannot sustain the current level of retiree health benefits. The commission is continuing to explore options for redesigning retired

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health benefits and/or the way the State pays for them to arrive at a solution that is both fiscally sound and fair to current and retired State employees.

State-Level Municipal Obligations. Neither the Constitution nor general laws of Maryland impose any limit on the amount of debt the State can incur. However, Maryland’s Constitution prohibits the creation of State debt unless it is authorized by a law that provides for the collection of an annual tax or taxes sufficient to pay the interest when due and to discharge the principal within 15 years of the date of issuance. Taxes levied for this purpose may not be repealed or applied to any other purpose until the debt is fully discharged. These restrictions do not necessarily apply to other issuers within the State. The General Assembly, by separate enabling act, typically authorizes a particular loan for a particular project or purpose. In its fiscal year 2009 capital program, 40% of the new general obligations bond authorizations represent financing of State-owned capital facilities and State programs, 58% represent financing of capital improvements owned by local governmental units, and 2% represent financing of capital improvements owned by non-profit or other private entities. The Board of Public Works authorizes State general obligation bond issues and supervises the expenditure of funds received therefrom, as well as all funds appropriated for capital improvements other than roads, bridges and highways. Maryland had approximately $8.6 billion of State tax-supported debt outstanding as of March 31, 2009. The State also plans to sell $485 million of general obligation bonds in August 2009.

The State’s public indebtedness can be generally divided into the following categories:

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The State and various counties, agencies and municipalities of the State issue general obligation bonds, payable from ad valorem taxes, for capital improvements and for various projects, including local-government initiatives and grants to private, nonprofit, cultural and educational institutions. The State’s real property tax is pledged exclusively to the repayment of its bonds. The Board of Public Works is required to fix the property tax rate by each May 1 in an amount sufficient to pay all debt service on the State’s general obligation bonds for the coming fiscal year. At least since the end of the Civil War, Maryland has paid the principal of and interest on its general obligation bonds when due. As of July 20, 2009, the State’s general obligation bonds were rated AAA by Fitch, Aaa by Moody’s Investors Service, Inc., and AAA by Standard & Poor’s. We cannot assure you that such ratings will be maintained in the future.

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The Maryland Department of Transportation issues limited special-obligation bonds for transportation purposes, payable primarily from specific, fixed-rate excise taxes and other revenues generated from the financed facilities, including an expansion to BWI airport, rail transportation facilities, highways and other transportation facilities. Holders of these bonds are not entitled to look to any other sources of payment. The 2008 General Assembly established a maximum outstanding principal amount of $693.8 million as of June 30, 2009, for all nontraditional debt of the Maryland Department of Transportation. Nontraditional debt outstanding is defined as any debt instrument that is not a consolidated transportation bond or Grant Anticipation Revenue Vehicle (“GARVEE”) Bond; such debt includes, but is not limited to, certificates of participation (documented by conditional purchase agreements), debt backed by customer facility charges, passenger facility charges, or other revenues, and debt issued by Maryland Economic Development Corporation (“MEDCO”) or any other third party on behalf of the Maryland Department of Transportation. At March 31, 2009, the outstanding principal amount of such nontraditional debt was estimated at $702.9 million, but is estimated at $693.8 million as of June 30, 2009.

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The Maryland Stadium Authority issues limited special-obligation bonds and notes to finance stadiums, convention centers and recreational facilities payable primarily from lease rentals, sports lottery and other revenues. At March 31, 2009, the principal amount of outstanding Maryland Stadium Authority bonds was $254.4 million.

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Certain other State units, such as Maryland’s university systems, the Maryland Transportation Authority and the Maryland Water Quality Financing Administration, as well as several local governments, are authorized to borrow funds pursuant to legislation that expressly provides that the

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State will not be deemed to have given any pledge or assurance of repayment, and for which the State will have no liability for repayment. These obligations are payable solely from specific non-tax revenues of the borrowers, including loan obligations from nonprofit organizations, corporations and other private entities. The issuers of these obligations are subject to various economic risks and uncertainties, and the credit quality of the securities issued by them may vary considerably from the quality of obligations backed by the full faith and credit of the State of Maryland. For example, the Maryland Transportation Authority, like the Maryland Department of Transportation, has issued bonds which are payable solely from collections from airline travel; declines in air traffic at BWI airport could impede repayment of such bonds.

•

During the 2004 General Session, the General Assembly created the Bay Restoration Fund to be managed by the Maryland Water Quality Financing Administration. The Bay Restoration Fund receives a mandatory fee of $30 per year per equivalent dwelling unit from users of sewerage systems in Maryland, as well as $30 per year from septic system users. The Bay Restoration Fund sewer fee generated $55.0 million in revenue during fiscal year 2008. Future sewer fee revenues are projected at approximately $55.0 million per year. The sewer fee revenues are pledged, to the extent necessary, as security for revenue bonds issued by the Maryland Water Quality Financing Administration, the proceeds of which will be applied primarily to provide grant funds to upgrade wastewater treatment plants with enhanced nutrient removal technology. The first issue of Bay Restoration Revenue Bonds, in the amount of $50.0 million, closed on June 25, 2008. Between 2009 and 2012, the Maryland Water Quality Financing Administration expects to issue an additional $480.0 million in Bay Restoration Revenue Bonds.

•

The State, its agencies and departments, and the various localities also enter into a variety of municipal leases, installment purchase, conditional purchase, sale-leaseback and similar transactions to finance the construction and acquisition of facilities and equipment. Such arrangements are not general obligations to which the issuing government’s taxing power is pledged but are ordinarily backed by the issuer’s covenant to budget for, appropriate and make the payments due on such obligations. Such arrangements generally contain “non-appropriation” clauses which provide that the issuing government has no obligation to make payments in future years unless money is appropriated for such purpose on a yearly basis. In the event that appropriations are not made, the issuing government cannot be held contractually liable for the payments. As of March 31, 2009 the total of such financings outstanding was $249.2 million.

Although the State has the authority to make short-term borrowings up to a maximum of $100 million in anticipation of taxes and other receipts, in the past 20 years the State has not issued short-term tax anticipation notes or made any other similar short-term borrowings for cash flow purposes.

Other Issuers of Municipal Bonds. Maryland can be divided into 24 subdivisions, comprised of 23 counties plus the independent City of Baltimore. Some of the counties and the City of Baltimore operate pursuant to the provisions of charters or codes of their own adoption, while others operate pursuant to State statutes. As a result, not all localities in Maryland follow the debt-authorization procedures outlined above. Maryland counties and the City of Baltimore typically receive most of their revenues from taxes on real and personal property, income taxes, miscellaneous taxes, and aid from the State. Their expenditures include public education, public safety, public works, health, public welfare, court and correctional services, and general governmental costs. Although some of these localities have received ratings of AAA from rating agencies, these ratings are often achieved through bond insurance or other credit enhancement. Over the last eighteen months, however, repeated downgrades of the ratings of bond insurers have resulted in substantially lower ratings on these bonds. Additionally, other issuers within Maryland have received lower ratings.

Many of Maryland’s counties have established subsidiary agencies with bond-issuing powers, such as sanitary districts, housing authorities, parking revenue authorities and industrial development authorities. For example, the Washington Suburban Sanitary Commission, which provides water and sewerage services in the

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District of Columbia area, and the Maryland-National Capital Park and Planning Commission, which administers a park system, both issue general obligation bonds. Many of the municipal corporations in Maryland have also issued general obligation bonds. In addition, all Maryland localities have the authority under State law to issue bonds payable from payments from private borrowers. All of these entities are subject to various economic risks and uncertainties, including the risks faced by the Maryland economy generally, and the credit quality of the securities issued by them varies with the financial strengths of the respective borrowers.

Local governments in Maryland receive substantial aid from the State for a variety of programs, including education costs and discretionary grants. However, the cuts in State aid to local governments, the recession, and ongoing credit crisis have required some Maryland counties and municipalities to find creative sources of revenue, in spite of the receipt of ARRA revenues. The substantial projected budget shortfalls at the State level and current economic environment, as well as other future events, might require further reductions in, or the discontinuation of some or all aid payments to local governments. Any such cutback in State aid and reductions in revenues will adversely affect local economies.

Risks and Uncertainties. Generally, the primary default risk associated with government obligations is the nonpayment of taxes supporting such indebtedness. In addition, certain debt obligations in the Fund may be obligations of issuers other than the State, such as those listed above. Although the State has received the highest ratings from ratings agencies, local governments and other issuers may have higher debt-to-assessment ratios, and/or greater credit risk, than the State itself, and as a result may be unable to repay their indebtedness. Other obligations are issued by entities which lack taxing power to repay their obligations, such as industrial development authorities and housing authorities. Certain debt may consist of obligations which are payable solely from the revenues of private institutions within one industry, such as health care. The default risk may be higher for such obligations, since any decline in that one industry could impede repayment. Finally, the credit crisis has had and continues to have a substantial impact on the bond markets. The State, its political subdivisions and other conduit borrowers regularly issue bonds to fund capital projects. Since the credit crisis began, the interest rates paid on some financings have increased. Other financings have been delayed as a result of adverse market conditions, as a result of which local governments have experienced increased borrowing costs or cash flow difficulties.

As described above, the State projects reduced revenues due, at least on part, to the current economic environment and the ongoing credit crisis. Substantial losses in the job market, considerable declines in individual and business income taxes, coupled with reduced consumer and business expenditures have already impacted State’s revenues and are likely to continue to do so for some time. The cumulative effect of the ongoing market uncertainty, the credit crisis, and the recession makes the economic outlook of the State, its political subdivisions and other borrowers challenging and at the same time, difficult to predict. While Maryland’s economy is unusually dependent on the federal government because a large percentage of Maryland residents are employed either by the federal government or in companies working with the federal government, other sectors of Maryland’s economy are experiencing the same difficulties as in the rest of the nation. Additionally, funds received by the State under ARRA are only temporarily available to support general fund commitments. Maryland may continue need to decrease spending, cut employment, raise taxes and take other measures to balance its budget for several years.

The impact of these factors is also being felt by local governments. The City of Baltimore and other political subdivisions and municipalities, many of which were already experiencing fiscal pressures due to general economic conditions and other factors, and are themselves experiencing lower revenues due to lower income tax and property transfer tax revenues and reductions in State aid. In particular, local governments depend on State aid, and any cutbacks in such aid as a result of the State’s own deficit issues could adversely affect local budgets.

Finally, the effect of the recession and credit crisis could affect the cash flow and ability of many conduit borrowers on bonds to service the debt service payments on their bonds; many of these entities may be unable to raise revenues due to weak consumer demand or other factors or may be experiencing higher costs (e.g.,

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increased charity care), so the combination of higher interest rates, lack of access to capital and lower revenues or higher expenses could result in defaults on these conduit obligations. Similarly, reductions in State aid (e.g. to private educational and social or health institutions) may affect the budget of private borrowers.

North Carolina

The North Carolina Constitution requires that the total expenditures of the State for the fiscal period covered by the budget not exceed the total receipts during the period plus any surplus remaining in the State Treasury at the beginning of the period. The State operates on a fiscal year ending June 30, with the North Carolina General Assembly adopting a biennial budget during its long session which is held in odd-numbered years. During the short session, held in even-numbered years, the General Assembly makes adjustments to the budget based on revenue collections. The annual appropriations bill, adjusting the 2007 act for the second fiscal year of the biennium for the 2008-2009 General Fund budget, was ratified by the General Assembly on July 8, 2008 and signed by the Governor on July 16, 2008. At the date of this document, the General Assembly had not adopted a General Fund budget for the 2009-2011 biennium or a budget for the current fiscal year ending June 30, 2010. The Governor, the State Senate and the State House of Representatives have proposed significant reductions in expenditures for the current fiscal year and 2009-2011 biennium and have proposed increased tobacco and alcohol taxes, sales tax increases, income tax surcharges and increased rates for high income individual and business taxpayers. At the date of this document, no agreement has been reached among the Governor and the Houses of the General Assembly as to expenditures or tax levels.

On January 13, 2009, the Governor of North Carolina issued an Executive Order finding that actual receipts for the fiscal year ending June 30, 2009 would not meet budgeted expenditures and would exceed General Fund receipts for the fiscal year unless State expenditures were reduced and under the Executive Order a number of steps were ordered to limit State expenditures to bring the budget into balance by year end. On April 28, 2009, the Governor issued an Executive Order providing for flexible furlough leave for most State employees to reduce salary expense by one-half of one percent over the remainder of the fiscal year ending June 30, 2009. At the date of this document, the receipts and expenditures for the fiscal year ended June 30, 2009 have not been released.

North Carolina is the tenth most populous state with more than 9.2 million people according to the U.S. Census Bureau’s 2008 estimates. Its economy is a combination of manufacturing, agriculture, services and tourism. In recent years, the State has moved from an agricultural economy to a services and goods based economy. There is also a significant military presence in North Carolina, contributing almost 7% of the gross state product, according to a 2008 study by the North Carolina Department of Commerce. Greater than 50% of North Carolina’s labor force is employed in one of four industry sectors: manufacturing, retail trade, health care and societal assistance, and government. However, the manufacturing slowdown continues to be felt in North Carolina. Manufacturing employment, which currently constitutes 12.4% of total employment, has decreased significantly from 2003, when it constituted 15.5% of total employment. While North Carolina remains the national leader in textile employment, job losses in the industry, which have been mounting for decades, are only expected to continue; nationwide, employment in the textile industry is expected to decline by 35% through year 2016.

North Carolina’s economy has been negatively impacted by the economic crisis facing the national economy. North Carolina’s labor market has slowed significantly since January 2008. The unemployment rate in North Carolina has risen from 5.0% in January 2008 to 11.0% in June 2009. During that same period, total employment (as reported by the Employment Security Commission of North Carolina, Labor Market Division) decreased by over 225,000 jobs or 5.4%. The unemployment rate in June 2009 is .1% below its highest point since the State started keeping seasonally adjusted data and is the nation’s eighth highest, behind Michigan, Rhode Island, Oregon, South Carolina, Nevada, California and Ohio. The unemployment rate is predicted to peak in 2010, followed by a decrease to approximately 9.0% in 2011. The education and health services sector, which is projected to expand 2.5% over the next several years, will likely lead the growth in employment, while construction and manufacturing will likely suffer longer than other industry sectors.

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On May 6, 2009, the Fiscal Research Division of the North Carolina General assembly released its Revised Revenue and Budget Outlook, which indicated that, based on a $20.8 billion revenue budget, there would be a $3.2 billion shortfall. This represents an unprecedented 10.8% decline over last year’s collections. Revised consensus numbers also indicated that if normal long-term growth resumes in 2011-12, it will be 2013-14 before revenues equal the $20.8 billion budget figure for 2008-2009.

On June 11, 2009, the Office of the State Controller’s May 2009 Monthly General Fund Financial Report for the period ended May 31, 2009, showed the State’s General Fund unreserved fund had a negative balance of $344.8 million, compared to a negative $284.7 million at the end of April 2009, and a positive balance of $638.3 million at the end of May 2008. For May 2009, North Carolina’s tax revenues, net of refunds, declined by $14.6 million, or 1.4% for that month compared to the prior year. With lower cash balances, investment earnings declined by $12.6 million for May 2009, compared to the previous year. For the year to date through May, net tax revenues reflected a decline of $1.7 billion, or 10 percent, with investment earnings down by $111.2 million, or 49.6 percent.

A General Fund budget for the fiscal year (and the biennium) beginning July 1, 2009 was not enacted by that date. On June 30, 2009 the General Assembly enacted a continuing resolution authorizing the Governor, as Director of the Budget, to expend State funds during the fiscal year beginning July 1, 2009 to continue State government operations. This legislation is intended to be a short-term measure to cover the period from the beginning of the new fiscal year until the budget for the new fiscal period is enacted. Similar legislation was enacted on July 15, 2009 before the original continuing resolution was set to expire and now runs through July 31, 2009. While there is no assurance that the expiration date would be extended through additional legislation, the General Assembly has typically made such extensions under similar circumstances to continue the expenditure of funds for periods not covered by an enacted budget. Both resolutions capped expenditures at a percentage of the previous year’s budget, the second at 84% of that budget.

On July 24, 2009, the Governor issued an Executive Order rescinding the January 13, 2009 Executive Order and limiting State expenditures, purchases, travel, filling of vacant positions or promotions and adjustments in compensation.

The following are cases pending in which the State faces the risk of either a loss of revenue or an unanticipated expenditure. Although an adverse result in any of the cases could have negative budgetary consequences, in the opinion of the Department of State Treasurer after consultation with the Attorney General, an adverse decision in any of these cases would not materially adversely affect the State’s ability to meet its financial obligations.

Hoke County et al. v. State of North Carolina and State Board of Education — Right to a Sound Basic Education (formerly Leandro ). In 1994, students and boards of education in five counties in the State filed suit in Superior Court requesting a declaration that the public education system of North Carolina, including its system of funding, violates the State constitution by failing to provide adequate or substantially equal educational opportunities, by denying due process of law, and by violating various statutes relating to public education. Five other school boards and students therein intervened, alleging claims for relief on the basis of the high proportion of at-risk and high-cost students in their counties’ systems.

The suit is similar to a number of suits in other states, some of which resulted in holdings that the respective systems of public education funding were unconstitutional under the applicable state law. The State filed a motion to dismiss, which was denied. On appeal, the North Carolina Supreme Court upheld the present funding system against the claim that it unlawfully discriminated against low wealth counties, but remanded the case for trial on the claim for relief based on the Court’s conclusion that the State Constitution guarantees every child the opportunity to obtain a sound basic education. Trial on the claim of one plaintiff-county was held in the fall of 1999. On October 26, 2000 the trial court, in Section Two of a projected three-part ruling, concluded that at-risk children in North Carolina are constitutionally entitled to such pre-kindergarten educational programs as may be

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necessary to prepare them for higher levels of education and the “sound basic education” mandated by the Supreme Court. On March 26, 2001, the Court issued Section Three of the three-part ruling, in which the judge ordered all parties to investigate certain school systems to determine why they are succeeding without additional funding. The State filed a Notice of Appeal to the Court of Appeals, which resulted in the Court’s decision to re-open the trial and call additional witnesses. That proceeding took place in the fall of 2001. On April 4, 2002 the Court entered Section Four of the ruling, ordering the State to take such actions as may be necessary to remedy the constitutional deficiency for those children who are not being provided with access to a sound basic education and to report to the Court at 90-day intervals remedial actions being implemented. On July 30, 2004, the North Carolina Supreme Court affirmed the majority of the trial court’s orders, thereby directing the executive and legislative branches to take corrective action necessary to ensure that every child has the opportunity to obtain a sound, basic education. The Supreme Court did agree with the State that the trial court exceeded its authority in ordering pre-kindergarten programs for at-risk children. The State continues to undertake measures to respond to the trial court’s directives. The trial judge holds periodic hearing to assess progress, most recently ordering in September of 2007 that certain testing be implemented. The magnitude of State resources which may ultimately be required cannot be determined at this time, however, the total cost could exceed $100 million.

N.C. School Boards Association, et al. v. Richard H. Moore, State Treasurer, et. al . — Use of Administrative Payments. On December 14, 1998, plaintiffs, including county school boards of Wake, Durham, Johnston, Buncombe, Edgecombe and Lenoir Counties, filed suit in Superior Court requesting a declaration that certain payments to State administrative agencies must be distributed to the public schools on the theory that such amounts are civil penalties which under the North Carolina Constitution must be paid to the schools.

On December 14, 2001, the Superior Court of Wake County granted summary judgment in favor of the plaintiffs on all issues, concluding that the funds in dispute are civil fines or penalties required by Article IX, Section 7 of the Constitution to be remitted to the public schools in the county where the violation occurred. The court further determined a three-year statute of limitations to be applicable, making the order retroactive to December 1995. This case was argued in the Court of Appeals in February 2003. The North Carolina Court of Appeals rendered a decision in September 2003 substantially favorable to the State. On July 1, 2005 the Supreme Court reversed the Court of Appeals in part, concluding that a majority of the funds in dispute are civil penalties required to be paid into the Civil Penalty and Forfeiture Fund for the benefit of public schools. Based upon information supplied by the defendant State agencies, the amount owed could be as much as $770 million. The case was remanded to Superior Court and on August 8, 2008 the Superior Court entered a judgment in the amount of $749.886 million. The court acknowledged, however, that the judicial branch did not have the power to force the State to satisfy the judgment and that any decision to do so would have to come from the legislature.

Southeast Compact Commission — Disposal of Low-level Radioactive Waste. North Carolina and seven other southeastern states created the Southeast Interstate Low-level Radioactive Waste Management Compact to plan and develop a site for the disposal of low-level radioactive waste generated in the member states. North Carolina was assigned responsibility for development of the first disposal site, with costs to be distributed equitably among the Compact members. In 1997 the Compact Commission discontinued funding of the development of the North Carolina site, alleging that the State was not actively pursuing the permitting and development of the proposed site. North Carolina withdrew from the Compact in 1999. The Compact subsequently asked the United States Supreme Court to accept its Complaint against North Carolina demanding the repayment, with interest, of $80 million of Compact payments expended on the permitting of the site, plus $10 million of future lost income, interest and attorney fees. The Supreme Court denied this motion in August 2001. On August 5, 2002 the Compact, with the addition of four member states as plaintiffs, filed a new motion requesting the United States Supreme Court to accept the claim under its original jurisdiction. On June 16, 2003, the Court accepted jurisdiction of the case and the State filed an answer and motion to dismiss on August 21, 2003. On November 17, 2003, the motion to dismiss was denied, and the U.S. Supreme Court appointed a Special Master with authority to determine when additional pleadings will be filed in the case. The Special Master heard oral arguments on dispositive motions filed by both sides on September 3, 2004 and in September,

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2006 allowed the State’s motions as to several claims. The parties will continue to litigate the remaining claims. Additional dispositive motions are pending before the Special Master who has indicated that orders favorable to the State will be recommended to the Supreme Court in the near future.

Goldston v. State of North Carolina – Highway Trust Fund Transfers. On November 14, 2002, a lawsuit was filed in Wake County Superior Court demanding that $80 million transferred by the Governor from the Highway Trust Fund to the General Fund for purposes of balancing the State budget be returned to the Highway Trust Fund. The suit further alleges that actions of the General Assembly regarding the transfer of funds from the Highway Trust Fund to the General Fund constitute a borrowing by the State of Highway Trust Fund cash surplus and are unlawful and unconstitutional. The lawsuit requests a declaration that taxes collected for purposes of Highway Trust Fund expenditures cannot be used for other purposes. Summary Judgment was granted in favor of the State on all issues and Plaintiff has filed a notice of appeal. On September 20, 2005, the North Carolina Court of Appeals upheld the trial court’s order. The plaintiff filed a petition for discretionary review with the North Carolina Supreme Court, and the Court agreed on March 2, 2006 to review a portion of the Court of Appeals’ decision and oral argument was heard on October 16, 2006. In an opinion filed December 15, 2006, the Supreme Court reversed the Court of Appeals, concluding that plaintiffs have standing to pursue their claims. On remand to Wake County Superior Court, the court ruled in favor of the State on both the standing argument and merits of the case. Plaintiffs appeal was argued in the Court of Appeals on January 28, 2009.

Lessie J. Dunn, et al. v. The State of North Carolina, et al. — Tax on Municipal Bonds. On February 9, 2004, Plaintiffs, on behalf of a class of all others similarly situated, filed suit in Forsyth County Superior Court alleging that the State’s imposition and collection of State income tax on interest received by taxpayers on municipal bonds issued by non-North Carolina state and local governments constitutes a violation of the Commerce Clause of the United States Constitution and seeking class certification. An order certifying a class has been entered by the superior court. The State appealed the scope of the class certification to the North Carolina Court of Appeals. On October 17, 2006, the Court of Appeals unanimously affirmed the order certifying the class. The State’s petition for discretionary review was granted by the North Carolina Supreme Court. On December 7, 2007, the North Carolina Supreme Court ruled that its earlier grant of discretionary review was improvidently allowed, which means that the Court of Appeals’ decision upholding class certification will stand. The United States Supreme Court, however, has now rejected plaintiff’s argument in Kentucky v. Davis . The State will now move to have the case dismissed.

State of North Carolina v. Phillip Morris, Inc., et al., — Master Settlement Agreement (“MSA”) Payments . On April 20, 2006, the State of North filed a Motion for Declaratory Order in the North Carolina Business Court against defendants Phillip Morris, Inc., R. J. Reynolds Tobacco Company, and Lorillard Tobacco Company. The Motion is seeking a declaration that (1) in 2003, North Carolina continuously had a Qualifying Statute in full force and effect and “diligently enforced” its provisions throughout that year in accordance with the MSA; (2) North Carolina is not subject to a Non-Participating Manufacturers’ Adjustment for 2003; and (3) defendants are obligated not to withhold or pay into a disputed payments account any payments due, or seek any offset of any payments made, on the basis that North Carolina is subject to a Non-Participating Manufacturers’ Adjustment for 2003. If the State is unable to ultimately prevail in the diligent enforcement litigation, the State may be unable to recover a portion of MSA payments. On December 4, 2006, Judge Tennille allowed the defendant’s motion to compel arbitration of these issues. The Court of Appeals has upheld the order, and on March 19, 2009, the State’s appeal to the North Carolina Supreme Court was denied. The State will therefore now be required to participate in a national arbitration process with the tobacco companies and all other MSA states.

Wal-Mart Stores East, Inc. v. Tolson and Sam’s East, Inc. v. Tolson – Refund of Corporate Income Tax. On March 17, 2006, the Plaintiffs filed complaints seeking a refund of over $33.5 million in corporate income taxes in Wake County Superior Court. Plaintiffs are challenging the Secretary’s authority to require them to file a “combined return” on various statutory and constitutional grounds. Defendant has filed a motion to dismiss under Rule 12(b)(6) and Plaintiff has filed a motion for summary judgment. On October 31, 2006, Defendant’s Motion

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to Dismiss was heard before Judge Horton who has been assigned to hear the actions as exceptional cases. Judge Horton granted summary judgment in favor of the State and Wal-Mart has appealed. Arguments were heard in the Court of Appeals on October 22, 2008, and the Court of Appeals issued an opinion on May 19, 2009 affirming the trial court judgment. Defendant is petitioning for discretionary review to the N.C. Supreme Court, but no decision has been issued yet.

Petroleum Traders Corporation (PTC ). On July 19, 2006, Petroleum Traders Corporation, an Indiana corporation which sells fuel oil to North Carolina and its agencies, filed suit in Wake County Superior Court against the State, the Governor, the Secretary of Administration, the Department of Administration, the Secretary of Revenue, the Department of Revenue, the Controller, the Department of the Controller, the Chief Information Officer of the State and the State of Information Technology Services challenging the fee charged for internet- enabled sales to the State (“the eProcurement fee”) as being an unconstitutional tax. The eProcurement fee is charged pursuant to N.C. Gen. Stat. § 66-58.12, which authorizes State agencies to charge a fee to cover the “cost of permitting a person to complete a transaction through the World Wide Web or other means of electronic access.” The State’s position is that the fee is not a tax under North Carolina law. The remedy requested on behalf of the plaintiff and “all others similarly situated” is a refund of all the eProcurement fees charged since the inception of the eProcurement program, a sum the plaintiff contends is approximately $109 million, of which the plaintiff alleges to have paid over $1 million. The State filed a motion to dismiss the lawsuit for failure to state a claim and moved for a stay of discovery until after its motion to dismiss was decided. The State’s motion to dismiss was allowed in part and denied in part. In May 2008 the Court of Appeals reversed the trial court and ordered that the State’s motion to dismiss be allowed in its entirety.

The Advisor believes that the information summarized above describes the more significant matters relating to the Columbia North Carolina Intermediate Municipal Bond Fund. The sources of the information are the official statements of the Department of the State Treasurer of North Carolina, other publicly available documents, and oral statements from various State agencies and individuals. The Advisor has not independently verified any of the information contained in the official statements, other publicly available documents, or oral statements from various State agencies.

South Carolina

The South Carolina (State) Constitution mandates a balanced budget. If a deficit appears likely, the State Budget and Control Board, composed of the Governor, the State Treasurer, the State Comptroller General, the Chairman of the Senate Finance Committee, and the Chairman of the House Ways and Means Committee, may reduce appropriations during the current fiscal year as necessary to prevent the deficit. If it is determined that a fiscal year has ended with an operating deficit, the State Constitution requires that monies appropriated from the Capital Reserve Fund must be reduced to the extent necessary and applied to the year end operating deficit before withdrawing monies from the General Reserve Fund for such purpose.

By statute, the State General Assembly has provided that if monies in the Capital Reserve Fund and General Reserve Fund are insufficient to balance the Budgetary General Fund, the State Budget and Control Board is authorized to borrow the amount needed to balance the Budgetary General Fund from any department of State government with a surplus to the credit of the State department on hand in the Office of the State Treasurer. Amounts borrowed must be repaid from the General Fund no later than June 30th of the following fiscal year.

The State Constitution limits annual increases in the State appropriations to the average growth rate of the economy of the State and annual increases in the number of State employees to the average growth rate of the population of the State; provided, however, that these two limitations are subject to suspension for any one fiscal year by a special vote in each House of the General Assembly.

The State Constitution requires a General Reserve Fund that equals three percent of General Fund revenue for the latest completed fiscal year. Funds may be withdrawn from the General Reserve Fund only for the

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purpose of covering operating deficits of State government. The State Constitution also requires a Capital Reserve Fund equal to two percent of General Fund revenue for the latest completed fiscal year.

The State Constitution requires that the General Assembly provide that, if revenue forecasts before March 1 project that revenues for the current fiscal year will be less than expenditures authorized by appropriation for the current fiscal year, the current fiscal year’s appropriation to the Capital Reserve Fund shall first be reduced to the extent necessary before any reduction is made in operating appropriations.

After March 1, monies from the Capital Reserve Fund may be appropriated by a special vote of the General Assembly to finance previously authorized capital improvement bond projects, to retire principal or interest on bonds previously issued, and to pay for capital improvements or other nonrecurring purposes. Monies in the Capital Reserve Fund not appropriated or any appropriation for a particular project or item that has been reduced due to application of the monies to a year-end deficit must lapse and be credited to the General Fund.

Fiscal Year Ended June 30, 2009

The original revenue estimate adopted by the Board of Economic Advisors for the State’s Budgetary General Fund for the fiscal year ended June 30, 2009 was $7,246.4 million, and the appropriation act estimate as enacted by the General Assembly was $6,735.7 million. On July 21, 2008, the Board of Economic Advisors revised its estimate of budgetary General Fund revenue to $7,106.4 million, a decrease of $140.0 million, and a 1.9% reduction to its original fiscal year 2008-09 estimate. In response, the State Budget and Control Board at its meeting on August 12, 2008 reduced the State’s Capital Reserve Fund of $133.2 million as required by the State Constitution and the State’s fiscal year 2008-09 Appropriation Act. Reduction of the Capital Reserve Fund reduces appropriations to the Capital Reserve Fund to the extent necessary to avoid mandatory reductions in operating appropriations. Additionally, the State Budget and Control Board mandated an across the board reduction of General Fund appropriations of 3% for all agencies except where prohibited by proviso and approved a 3% reduction of the Local Government Fund. Additionally, certain agency appropriations lapsed as a result of suspension of a provision that, in some years, has allowed agencies to carry forward to the next fiscal year up to 10% of their unexpended appropriations. This provision was automatically suspended for the fiscal year because of reduction of the Capital Reserve Fund. On October 8, 2008, the Board of Economic Advisors further revised its estimate of budgetary General Fund revenue to $6,692.4 million, a decrease of $414 million, and a 7.6% reduction to its original fiscal year 2008-09 estimate.

On October 20, 2008, the South Carolina General Assembly reconvened to amend the general appropriations act for fiscal year 2008-09, enact targeted reductions in General Fund appropriations, suspend actions of the State Budget and Control Board described above that mandated the across board reduction of General Fund appropriations and the reduction to the Local Government Fund, and validate and confirm use of the Capital Reserve Fund to offset the revenue shortfall for fiscal year 2008-09. These amendments to the 2008-09 appropriations act totaled expenditure reductions of $621.1 million, consisting of $487.9 million in targeted reductions and the $133.2 million reduction of the Capital Reserve Fund described above. On November 7, 2008, the Board of Economic Advisors further revised its estimate of budgetary General Fund revenue to $6,557.4 million, a decrease of $135.0 million, and a 9.5% reduction to its original fiscal year 2008-09 estimate. On December 10, 2008, the Board of Economic Advisors further revised its estimate of budgetary General Fund revenue to $6,327.7 million, a decrease of $229.7 million, and a 12.7% reduction to its original fiscal year 2008-09 estimate. In response, the State Budget and Control Board at its meeting on December 11, 2008 mandated an across the board reduction of General Fund appropriations of 7% for all agencies except where prohibited by proviso and approved a 7% reduction of the Local Government Fund. On March 11, 2009, the Board of Economic Advisors further revised its estimate of budgetary General Fund revenue to $6,263.3 million, a decrease of $64.4 million, and a 13.6% reduction to its original fiscal year 2008-09 estimate. In response, the State Budget and Control Board at its meeting on March 18, 2009 mandated an across the board reduction of General Fund appropriations of 2% for all agencies except where prohibited by proviso. On June 11, 2009, the

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Board of Economic Advisors further revised its estimate of budgetary General Fund revenue to $6,171.3 million, a decrease of $92.0 million, and a 14.8% reduction to its original fiscal year 2008-2009 estimate.

Through June 30, 2009, total General Fund revenue collections year to date were under the fiscal year 2008-09 revised revenue plan adopted on June 11, 2009 by $112.4 million or 1.9%, and were under prior year collections for the same period by $828.0 million or 12.5%.

The General Reserve Fund balance at the beginning of fiscal year 2007-08 was $167.7 million and was increased during fiscal year 2007-08 by $19.0 million. Accordingly, the $91.7 million withdrawal at year-end, net of an increase during fiscal year 2008-09 by $12.9 million, leaves the reserve currently funded at $108.1 million. In accordance with the State Constitution, the General Reserve Fund must be restored within three years to its full-funding amount of 3% of the State’s Budgetary General Fund revenues for the latest completed fiscal year. The State’s audited Comprehensive Annual Financial Report for fiscal year ended June 30, 2008 can be found at http://www.cg.state.sc.us.

Fiscal Year Ending June 30, 2010

The State Board of Economic Advisors recently cut their estimate of tax revenues for fiscal year ending June 30, 2010 to $5.47 billion, a decrease of 3.5% or $211 million based upon projections that high unemployment will persist and may worsen during the fiscal year.

State’s Economy

The State’s economy was predominantly dependent on agriculture until well into the 20th century; thereafter, manufacturing became the leading contributor to the gross state product. Since the 1950’s, the State’s economy has undergone a gradual transition to other activities.

Real Gross Domestic Product . At December 31, 2008, principal contributors to the State’s gross domestic product were the trade, transportation and utilities industries (21%), manufacturing (18%), followed by financial activities, and government (15% each). During the years 2002-2007, the fastest growing contributors to the State’s gross domestic product were the information industry (10% average annual growth), followed by retail trade (6%) and professional and business services (5%). Consistent with trends nationwide and in the southeast, manufacturing declined over the period by 4.2% in the State, 3.4% in the southeast, and 4.5% in the nation. The State’s total gross domestic product grew at an average annual growth rate of 1.9% (v. 3.2% for southeastern states, and 2.8% for the nation) from 2002-2007.

Employment . The State’s unemployment rate at December 31, 2008 was 8.3%, up 2.6% from December 31, 2007. By comparison, the unemployment rate was 6.7% for the southeastern states, and 6.7% for the nation.

Over the past several years, the State’s unemployment rates have trended higher than the unemployment rates of other southeastern states and the nation. Largest contributors to the state’s unemployment rate are declines in manufacturing jobs and growth in the labor force. While the State’s economy is generating jobs, not enough jobs have been created to address the expanding labor force. The State’s nonagricultural employment increased 1.6% from 2003-2008, to 1.89 million by December, 2008. Strongest job growth through the period 2003-2008 occurred in the professional and business services industry (45,900 jobs, 2.3% average annual growth), followed by trade, government (38,700, 1.2%), education and health services (30,400, 3.2%), trade, transportation and utilities (18,000, 1.0%), leisure and hospitality (13,500, 1.4%), and financial activities (13,200, 2.7%). During the same period, the State’s manufacturing sector declined by 67,600 jobs (2.6%).

Per Capita Income . In 2008, the State’s per capita income increased to $31,798 or 2.7% year over year, compared to an increase of 2.2% for the southeast and 1.9% for the nation. The State’s per capita income was 80.2% of the national (compared to 80.4% in 2007) and 88.8% of the southeast (compared to 88.5% in 2007) per capita income.

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Population . The State’s population estimate at December 31, 2008 was almost 4.5 million. The State’s rate of growth in population was 10 ^th fastest in the United States in 2008.

Economic Development . For the calendar year 2008, the South Carolina Department of Commerce reported $4.170 billion in new capital investments that are expected to create about 18,993 new jobs. Over the past three years, 29 percent of those jobs were in the State’s rural areas. Additional details and other information regarding economic development efforts may be found at the South Carolina Department of Commerce website, located at http://www.sccommerce.com.

Litigation

There is presently no litigation challenging the validity of any general obligation debt issued or proposed to be issued by the State. The Attorney General of the State advises that, except as described immediately below, there is neither threatened nor, to his knowledge pending, any litigation which would have any material adverse effect upon the revenues of the State.

Anonymous Taxpayer vs. South Carolina Department of Revenue . A separate anonymous taxpayer protest seeks a refund of income taxes pursuant to the statute providing for tax credits related to Economic Impact Zones. The Department of Revenue (DOR) denied the refund, and the matter came before an Administrative Law Court. The Administrative Law Court allowed a $2,112,640 refund for tax year 1995, but denied the $15,323,257 refund request for tax years 1997 and 1998. Both the taxpayer and DOR are seeking judicial review by the Circuit Court.

Abbeville County School District, et. al. v. State of South Carolina . This action was originally brought seeking declaratory and injunctive relief on behalf of certain school districts, taxpayers, and individuals alleging that the State’s method of funding primary and secondary public education violated several provisions of State and federal law. The lower court dismissed the complaint on all counts. The South Carolina Supreme Court affirmed the lower court’s dismissal of all but one of the counts, but reversed the lower court’s dismissal of a claim arising under the education clause of the South Carolina Constitution. Specifically, the South Carolina Supreme Court held that the South Carolina Constitution requires the State to provide the opportunity for each child within the State to receive a minimally adequate education. Finding that the complaint stated a claim under this provision, the South Carolina Supreme Court remanded the case for further proceedings. Following the remand, the plaintiffs requested leave to amend their complaint in this action to add a claim for damages for past actions or omissions of the State. The Court accepted the amended complaint. The suit also contains requests for declaratory and injunctive relief that could result in the State’s providing additional monies for public education and, possibly, for other purposes. On December 29, 2005, the Court issued a order concluding that the instructional facilities in the school districts are safe and adequate to provide the opportunity for a minimally adequate education; that the State’s curriculum standards at the minimum encompass the knowledge and skills necessary to satisfy the definition for a minimally adequate education; that the State’s system of teacher licensure is sufficient to ensure at least minimally competent teachers to provide instruction consistent with the curriculum standards; that inputs into the educational system, except for the funding of early childhood intervention programs, are sufficient to satisfy the constitutional requirement; that the constitutional requirement of adequate funding is not met by the State as a result of its failure to adequately fund early childhood intervention programs; and that the students in the school districts are denied the opportunity to receive minimally adequate education because of the lack of effective and adequately funded early childhood intervention programs designed to address the impact of poverty on their educational abilities and achievements. Motions for reconsideration were filed in January, 2006, with briefs filed on April 4, 2006. The court has yet to make a decision on the reconsideration request. There is no official estimate of the fiscal impact of any remedial action that will be necessitated by the findings of the Court; however, the General Assembly made provision in the 2006-07 Appropriation Act for $23 million to be expended for the purpose of initially addressing the court’s findings, and further provided for establishment of a committee to study and determine steps necessary to address those findings in future years. The Supreme Court heard oral arguments on June 25, 2008 on the merits of the Trial Court’s decision.

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Dean v. South Carolina Department of Public Safety. This class action suit seeks back wages including overtime pay for all hours during which State troopers were on call and during which they were on special duty assignments. The suit seeks payment under the Fair Labor Standards Act (FLSA) and the State Wage Payment Act. The court ruled that this is an “opt in” class, so that it includes all troopers in the State except for the less than 200 who opted out. Questions to be resolved in the case include whether a two or three year statute of limitations applies and whether the period of recovery may be extended back to 1986, the year the FLSA became applicable to the states. The court has ruled that treble damages would not apply to the State, but it has not ruled on the statute of limitations issue. Extensive discovery is proceeding. Settlement discussions have been undertaken. Under the Plaintiffs’ theory of the case, in the event of a loss to the State, the amount could exceed $12 million. The State is vigorously defending this case, but cannot predict its outcome.

Ahrens et al. v. The South Carolina Retirement System and the State of South Carolina . This case is a class action case alleging that provisions in Act No. 153 of the Acts and Joint Resolutions of the General Assembly for the year 2005 (“Act No. 153”) requiring working retirees in the South Carolina Retirement System (“SCRS”) to make employee contributions are unconstitutional and illegal. A circuit court judge has certified the class in this case and issued an order in favor of the plaintiffs. The defendants have filed post-trial motions and if necessary will appeal an adverse ruling. The defendants are also challenging the class definitions. As of May 8, 2009, the Retirement Systems had collected approximately $36 million in the form of retirement contributions from members of the South Carolina Retirement System who retired prior to July 1, 2005 and returned to work. If the Plaintiffs were to prevail, most, if not all of these contributions would be refunded to the members and no future contributions could be collected from them. The Retirement Systems and the State of South Carolina believe their defense is meritorious and is vigorously contesting these claims.

Arnold et al. v. the South Carolina Police Officers Retirement System, the South Carolina Retirement System and the State of South Carolina. This case is a class action case filed on August 9, 2005, alleging that provisions in Act No. 153 of the Acts and Joint Resolutions of the General Assembly for the year 2005 (“Act No. 153”) requiring working retirees in the Police Officers Retirement System (“PORS”) to make employee contributions are unconstitutional and illegal. A circuit court judge has certified the class in this case and issued an order in favor of the plaintiffs. The defendants have filed post-trial motions, and if necessary will appeal an adverse ruling. The defendants are also challenging the class definitions. As of May 8, 2009, the Retirement Systems had collected approximately $11.5 million in the form of retirement contributions from members of the Police Officers Retirement System who retired prior to July 1, 2005 and returned to work. If the Plaintiffs were to prevail, most, if not all of these contributions would be refunded to the members and no future contributions could be collected from them. The Police Officers Retirement System and the State of South Carolina believe their defense is meritorious and is vigorously contesting these claims.

Other Litigation. Certain other legal actions to which the State is a party are discussed in the Notes to the State’s audited financial statements available at www.cg.state.sc.us. Those discussions accurately portray the status and potential impact of such actions, based upon information currently available to the State.

Miscellaneous

South Carolina Lottery. In November, 2000, the State’s electorate approved an amendment to the State Constitution to permit the implementation of a lottery. The amendment was adopted by the South Carolina General Assembly during its 2001 legislative session, and the lottery became operational in January, 2002. As adopted, revised Article XVII, Section 7 of the State Constitution permits lotteries and requires lottery revenues to be applied first to pay all operating expenses and prizes, with the remainder credited to a separate Education Lottery Account in the State Treasury. All account proceeds, including earnings from the investments thereof, which are required to be credited to the Education Lottery Account, must be allocated by the General Assembly only for educational purposes.

The latest information available indicates a total of $270 million net of operating expenses has been transferred to the Education Lottery Account. Monies in the Education Lottery Account must be used to

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supplement and not supplant existing funds for education including pre-school, elementary, high school, technical and higher teaming programs, scholarships, tuition assistance, libraries, endowed chairs at various institutions of higher learning, and acquisition of school buses.

The Adviser believes that the information summarized above describes some of the more significant matters relating to the South Carolina Intermediate Municipal Bond Fund and South Carolina Municipal Bond Fund. The sources of the information are the official statements of issuers located in South Carolina, other publicly available documents, or oral statements from various State agencies. The Adviser has not independently verified any of the information contained in the official statements, other publicly available documents, or oral statements from various State agencies.

Virginia

Debt may be issued by or on behalf of the Commonwealth of Virginia in accordance with the provisions of Article X, Section 9 of the Virginia Constitution. Virginia counties, cities and towns may issue debt pursuant to the provisions of Article VII, Section 10 of the Virginia Constitution and the Public Finance Act of 1991 (Virginia Code Sections 15.2-2600 through 15.2-2663). Private activity bonds may be issued by various special purpose authorities, including industrial development authorities created pursuant to the Industrial Development and Revenue Bond Act (Virginia Code Sections 15.2-4900 through 15.2-4920).

Section 9 of Article X of the Virginia Constitution provide for the issuance of (a) debt to which the Commonwealth’s full faith and credit is pledged (“general obligation debt”) and (b) debt of the Commonwealth not secured by the full faith and credit of the Commonwealth, but which may be supported by and paid from Commonwealth tax collections. The Commonwealth and its localities may also enter into leases and contracts that are not “debt” for constitutional purposes, even though they are classified as long-term indebtedness on the issuer’s financial statements.

The Virginia Constitution authorizes general obligation debt for various purposes, and imposes certain restrictions on the amount of general obligation debt that may be issued by the Commonwealth and, in some cases, makes such debt subject to approval in a state-wide election. The restrictions applicable to general obligation debt of the Commonwealth do not apply to obligations for which the full faith and credit of the Commonwealth is not pledged to the payment of such obligations. These bonds may be paid in whole or in part from revenues received as appropriations by the General Assembly from general tax revenues or solely from revenues derived from revenue-producing undertakings.

The Virginia Intermediate Municipal Bond Fund also invests in debt obligations issued by Virginia local governments. Local government units in the Commonwealth are comprised of counties, incorporated cities, and incorporated towns. The Commonwealth is unique in that cities and counties are independent of each other and their land areas do not overlap. Cities and counties each levy and collect their own taxes and provide their own services. Towns may also levy and collect taxes for town purposes but their residents are also subject to county taxes.

Local governments are authorized under the Virginia Constitution to issue general obligation debt and debt secured by revenues of a revenue-producing undertaking. Generally, debt issued by a county pledging the full faith and credit of the county is subject to voter approval but is not limited as to outstanding amount. Debt pledging the full faith and credit of a town or city is generally subject to a limit on the outstanding amount of such debt equal to 10 percent of the assessed valuation of the real estate subject to taxation in the city or town. Revenue bonds payable from revenues derived from a revenue-producing undertaking and certain lease or installment sale obligations that are subject to appropriation each year by the governing body of the locality are not subject to such limit and are not subject to voter approval in counties.

The primary sources of money available to localities to pay debt service on general obligation bonds are real and personal property taxes, sales tax and business license taxes. Virginia Code Section 15.2-2659, known as the

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“state aid intercept provision” provides a mechanism for applying appropriations to be made from the Commonwealth to any locality to any overdue debt service on general obligation bonds issued by such locality.

Numerous obligations are also issued by industrial development authorities, redevelopment and housing authorities, water and sewer authorities and other issuers created and empowered to issue bonds by Virginia statute. These issuers typically issue bonds payable from the revenues derived from a particular undertaking and not secured by a pledge of the faith and credit of the Commonwealth or any county, city or town. Typically these issuers do not have taxing power.

The General Fund of the Commonwealth derives its revenues primarily from five major taxes imposed by the Commonwealth: individual and fiduciary income; corporation income; state sales and use; deeds, contracts, wills and suits; and premiums of insurance companies. Financial accounting (under GAAP) and budgetary account (on a cash basis) is maintained on a June 30 fiscal year basis. On a GAAP basis, the General Fund balance decreased by $780.8 million in fiscal year 2008, a decrease of 39.4 percent from fiscal year 2007.

Fiscal year 2008 state revenue collections were $15.9 million (0.1 percent) above forecast. Major source tax revenues increased by 1.1 percent from fiscal year 2007 to fiscal year 2008. Individual and fiduciary income tax revenues increased by 3.3 percent and there was a 0.9 percent increase in state sales and use taxes, and an 8.2 percent decrease in corporate income taxes. Total General Fund revenues increased by 1.3 percent compared to fiscal year 2007. Declining employment levels, slower income growth, lower consumer confidence, and the continued downward trends in the housing market caused shortfalls against projections of withholding, sales, and recordation taxes in fiscal year 2008. The two General Fund revenue sources most closely tied to current economic activity – payroll withholding and retail sales taxes – experienced a meaningful slowdown in the rate of growth during the second half of fiscal year 2008. On a GAAP accounting basis, overall Virginia state expenditures rose by 6.0 percent in fiscal year 2008, compared to an 8.3 percent increase in fiscal year 2007.

Of the $2,219.8 million General Fund balance at June 30, 2008, $1,019.4 million was reserved for the Revenue Stabilization Fund. Additionally, Virginia deposited an additional $21.3 million in fiscal year 2009 into the Revenue Stabilization Fund (as required in respect of the increase in revenues in 2007). This fund is segregated from the General Fund and can only be used for constitutionally authorized purposes. Virginia law directs that the Revenue Stabilization Fund be included as a component of the General Fund only for financial reporting purposes. During fiscal year 2008, General Fund expenditures exceeded revenues and net transfers by $735.3 million on the cash basis, and $490 million was withdrawn from the Revenue Stabilization Fund in April 2009 to cover the this shortfall.

Virginia’s 2009-2010 biennial budget (enacted in 2008) projected total state resources available for appropriation projected to equal $80.4 billion for fiscal years 2009 and 2010. Lower revenue collections have resulted in required revenue re-estimates and fiscal year 2009 budget reductions. It is anticipated that additional budget reductions will be required during fiscal year 2010.

In July 2009, Virginia’s Secretary of Finance released preliminary revenue data for fiscal year 2009 which indicates that General Fund revenue collections would fall short of projections by $300 million. General Fund revenue collections has been projected to be 7.3% lower in fiscal year 2009 than for fiscal year 2008, total General Fund revenues have actually declined 9.3 percent but through May 2009. Revenue losses in income tax withholding, sales taxes, and recordation taxes during this period were attributable to declines in employment, consumer confidence and the housing market. The Secretary of Finance also noted that local government finances are suffering from both low-growth rates in both local and state revenues and increasing program costs, and that real estate taxes may not raise enough money to cover current local government budgets.

As of May 2009, over $5 billion of federal has been allocated to Virginia under the American Reinvestment and Recovery Act (ARRA). Legislation effective in April 2009 allowed appropriation and spending of ARRA funding by the Virginia General Assembly. The General Assembly has distributed allocations and appropriations

C-39

across several fiscal years. Approximately 30 percent of the total available AARA funds were allocated to fiscal year 2009, with the remainder either being allocated specifically to fiscal year 2010 or remaining to be allocated to either fiscal year 2010 or 2011.

The Commonwealth’s 2008 population of 7,769,089 was 2.56 percent of the United States’ total. With 39,594 square miles of land area, its 2008 population density was 196.22 persons per square mile, compared with 85.95 persons per square mile for the United States. According to the U.S. Department of Commerce, Bureau of Economic Analysis, in 2008, the Commonwealth had per capita personal income of $42,876, which was greater than the national average of $39,371, the eighth highest state average nationally and the highest of the Southeast region. According to the U.S. Department of Labor, Bureau of Labor Statistics, Virginia had a preliminary unemployment rate of 7.2% percent as of June 2009 compared to 9.5 percent nationally, making the Commonwealth the state with the ninth lowest unemployment rate in June 2009.

Virginia’s bond rating is the best available from the leading ratings agencies at (Aaa/AAA/AAA from Moody’s, Standard & Poor’s, and Fitch Ratings, respectively) for long-term general obligation bonds and has maintained its top rating for such bonds for 70 years, longer than any other state.

The sources of the information described above include the statutes and constitutional provisions referenced, to which reference is made for more detailed information, and official statements of the Commonwealth and other publicly available documents. Columbia Funds has not independently verified any of the information contained in these official statements or documents.

C-40

Columbia Management ^®


		COLUMBIA FUNDS SERIES TRUST

		Class Y Shares

		STATEMENT OF ADDITIONAL INFORMATION

		August 1, 2010

Fund	Class Y Shares
Columbia Short Term Bond Fund	CSBYX

This Statement of Additional Information (SAI) is not a prospectus, is not a substitute for reading any prospectus and is intended to be read in conjunction with the Fund’s prospectuses dated August 1, 2010. The most recent annual report for the Fund, which includes the Fund’s audited financial statements dated March 31, 2010, are incorporated by reference into this SAI.

Copies of the Fund’s current prospectuses and annual and semi-annual reports may be obtained without charge by writing Columbia Management Investment Services Corp., P.O. Box 8081, Boston, MA 02266-8081, by calling Columbia Funds at 800.345.6611 or by visiting the Columbia Funds’ website at www.columbiafunds.com.

INT-[ ]

TABLE OF CONTENTS


			Page
SAI PRIMER			2
ABOUT THE TRUST			6
ABOUT THE FUND’S INVESTMENTS			7
	Certain Investment Activity Limits		7
	Fundamental and Non-Fundamental Investment Policies		7
	Exemptive Orders		8
	Permissible Investments and Related Risks		9
	Borrowings		42
	Short Sales		43
	Lending Securities		44
	Portfolio Turnover		45
	Disclosure of Portfolio Information		45
INVESTMENT ADVISORY AND OTHER SERVICES			50
	The Adviser and Investment Advisory Services		50
	The Administrator		53
	Pricing and Bookkeeping Services		54
	The Principal Underwriter/Distributor		55
		Other Roles and Relationships of Ameriprise Financial and its Affiliates — Certain Conflicts of Interest	56
	Other Services Provided		60
	Distribution and Servicing Plans		61
	Expense Limitations		61
	Codes of Ethics		61
	Proxy Voting Policies and Procedures		61
	Expenses Paid by Third Parties		62
FUND GOVERNANCE			64
	The Board		64
	The Officers		72
BROKERAGE ALLOCATION AND OTHER PRACTICES			77
	General Brokerage Policy, Brokerage Transactions and Broker Selection		77
	Brokerage Commissions		79
	Directed Brokerage		79
	Securities of Regular Broker/Dealers		80
	Additional Shareholder Servicing Payments		80
	Additional Financial Intermediary Payments		81
CAPITAL STOCK AND OTHER SECURITIES			83
	Description of the Trust’s Shares		83
PURCHASE, REDEMPTION AND PRICING OF SHARES			86
	Purchase and Redemption		86
	Offering Price		89
TAXATION			91
CONTROL PERSONS AND PRINCIPAL SHAREHOLDERS			104
LEGAL PROCEEDINGS			105
APPENDIX A — DESCRIPTIONS OF SECURITIES RATINGS			A-1
APPENDIX B — PROXY VOTING POLICIES AND PROCEDURES			B-1

SAI PRIMER

The SAI is a part of the Fund’s registration statement that is filed with the SEC. The registration statement includes the Fund’s prospectuses, the SAI and certain exhibits. The SAI, and any supplements to it, can be found online at www.columbiafunds.com, or by accessing the SEC’s website at www.sec.gov.

The SAI generally provides additional information about the Fund that is not required to be in the Fund’s prospectuses. The SAI expands discussions of certain matters described in the Fund’s prospectuses and provides certain additional information about the Fund that may be of interest to some investors. Among other things, the SAI provides information about:

•

the organization of the Trust;

•

the Fund’s investments;

•

the Fund’s investment adviser, investment subadviser(s) (if any) and other service providers, including roles and relationships of Ameriprise Financial and its affiliates, and conflicts of interest;

•

the governance of the Fund;

•

the Fund’s brokerage practices;

•

the share classes offered by the Fund;

•

the purchase, redemption and pricing of Fund shares; and

•

the application of U.S. federal income tax laws.

Investors may find this information important and helpful. If you have any questions about the Fund, please call Columbia Funds at 800.345.6611 or contact your financial advisor.

Before reading the SAI, you should consult the Glossary below, which defines certain of the terms used in the SAI.

Glossary

1933 Act

Securities Act of 1933, as amended

1934 Act

Securities Exchange Act of 1934, as amended

1940 Act

Investment Company Act of 1940, as amended

Administrative Services Agreement

The administrative services agreement between the Trust, on behalf of the Fund, and the Administrator

Administrator

Columbia Management Investment Advisers, LLC

Adviser

Columbia Management Investment Advisers, LLC

Ameriprise Financial

Ameriprise Financial, Inc.

BANA	Bank of America, National Association

Glossary

Bank of America

Bank of America Corporation

BFDS/DST

Boston Financial Data Services, Inc./DST Systems, Inc.

Board

The Trust’s Board of Trustees

Brandes

Brandes Investment Partners, L.P.

CMOs	Collateralized mortgage obligations

Code	Internal Revenue Code of 1986, as amended

Codes of Ethics

The codes of ethics adopted by the Board pursuant to Rule 17j-1 under the 1940 Act

Columbia Funds Complex

The mutual fund complex that is comprised of the open-end investment management companies advised by the Adviser or its affiliates and principally underwritten by Columbia Management Investment Distributors, Inc., including funds using the RiverSource, Threadneedle and Seligman brands and funds using the Columbia brand

Columbia Funds or Columbia Funds Family

The funds within the Columbia Funds Complex using the Columbia brand

Custodian or State Street

State Street Bank and Trust Company

Distribution Agreement

The distribution agreement between the Trust, on behalf of the Fund, and the Distributor

Distribution Plan(s)

One or more of the plans adopted by the Board pursuant to Rule 12b-1 under the 1940 Act for the distribution of the Fund’s shares

Distributor

Columbia Management Investment Distributors, Inc.

FHLMC

The Federal Home Loan Mortgage Corporation

FDIC	Federal Deposit Insurance Corporation

Fitch

Fitch, Inc.

FNMA	Federal National Mortgage Association

The Fund

The open-end management investment company listed on the front cover of this SAI that is a series of the Trust

GNMA	Government National Mortgage Association

Independent Trustees

The Trustees of the Board who are not “interested persons” (as defined in the 1940 Act) of the Fund

Glossary

Interested Trustee

A Trustee of the Board who is an “interested person” (as defined in the 1940 Act) of the Fund

Investment Management Services Agreement

The investment management services agreement between the Trust, on behalf of the Fund, and the Adviser

IRS	United States Internal Revenue Service

LIBOR

London Interbank Offered Rate

Marsico

Marsico Capital Management, LLC

Moody’s

Moody’s Investors Service, Inc.

NASDAQ

National Association of Securities Dealers Automated Quotations system

NRSRO

Nationally recognized statistical ratings organization (such as Moody’s, Fitch or S&P)

NSCC	National Securities Clearing Corporation

NYSE	New York Stock Exchange

Previous Administrator

Columbia Management Advisors, LLC

Previous Adviser

Columbia Management Advisors, LLC

Previous Distributor

Columbia Management Distributors, LLC

Previous Transfer Agent

Columbia Management Services, Inc.

REIT	Real estate investment trust

REMIC

Real estate mortgage investment conduit

RIC	A “regulated investment company,” as such term is used in the Internal Revenue Code of 1986, as amended

S&P

Standard & Poor’s, a division of the McGraw-Hill Companies (“Standard & Poor’s” and “S&P” are trademarks of The McGraw-Hill Companies, Inc. and have been licensed for use by the Adviser. The Columbia Funds are not sponsored, endorsed, sold or promoted by Standard & Poor’s and Standard & Poor’s makes no representation regarding the advisability of investing in the Columbia Funds)

SAI	This Statement of Additional Information

SEC	United States Securities and Exchange Commission

Glossary

Selling Agent(s)

One or more of the banks, broker/dealers or other financial institutions that have entered into a sales support agreement with the Distributor

Servicing Agent(s)

One or more of the banks, broker/dealers or other financial institutions that have entered into a shareholder servicing agreement with the Distributor

Short Term Bond Fund

Columbia Short Term Bond Fund

Transfer Agency Agreement

The transfer agency agreement between the Trust, on behalf of the Fund, and Columbia Management Investment Services Corp.

Transfer Agent

Columbia Management Investment Services Corp.

The Trust or CFST

Columbia Funds Series Trust, the registered investment company in the Columbia Funds Family to which this SAI relates

Trustee(s)

One or more of the Board’s Trustees

ABOUT THE TRUST

On September 26, 2005, the name of the Fund was changed from Nations Short-Term Income Fund to Columbia Short Term Bond Fund.

The Fund represents a separate series of the Trust and is an open-end diversified management investment company.

The Fund has a fiscal year end of March 31 ^st .

ABOUT THE FUND’S INVESTMENTS

The investment objective, principal investment strategies (i.e., as used in this SAI and the corresponding prospectuses, a strategy which generally involves the ability to invest 10% or more of the Fund’s total assets) and related principal risks for the Fund are discussed in the Fund’s prospectus es.

Certain Investment Activity Limits

The overall investment and other activities of the Adviser and its affiliates may limit the investment opportunities for the Fund in certain markets where limitations are imposed by regulators upon the amount of investment by affiliated investors, in the aggregate or in individual issuers. From time to time, the Fund’s activities also may be restricted because of regulatory restrictions applicable to the Adviser and its affiliates and/or because of their internal policies. See Investment Advisory and Other Services — Other Roles and Relationships of Ameriprise Financial and its Affiliates — Certain Conflicts of Interest .

Fundamental and Non-Fundamental Investment Policies

The following discussion of “fundamental” and “non-fundamental” investment policies and limitations for the Fund supplements the discussion of investment policies in the Fund’s prospectuses. A fundamental policy may be changed only with Board and shareholder approval. A non-fundamental policy may be changed by the Board and does not require shareholder approval, but may require notice to shareholders in certain instances.

Unless otherwise noted, whenever an investment policy or limitation states a maximum percentage of the Fund’s assets that may be invested in any security or other asset, or sets forth a policy regarding an investment standard, compliance with such percentage limitation or standard will be determined solely at the time of the Fund’s acquisition of such security or asset. Borrowings and other instruments that may give rise to leverage and the restriction on investing in illiquid securities are monitored on an ongoing basis.

Fundamental Investment Policies

The 1940 Act provides that a “vote of a majority of the outstanding voting securities” of the Fund means the affirmative vote of the lesser of (1) more than 50% of the outstanding shares of the Fund, or (2) 67% or more of the shares present at a meeting if more than 50% of the outstanding shares are represented at the meeting in person or by proxy. The following fundamental investment policies cannot be changed without such a vote.

The Fund may not, as a matter of fundamental policy:

Purchase or sell real estate, except the Fund may purchase securities of issuers which deal or invest in real estate and may purchase securities which are secured by real estate or interests in real estate;

Purchase or sell commodities, except that the Fund may, to the extent consistent with its investment objective, invest in securities of companies that purchase or sell commodities or which invest in such programs, and purchase and sell options, forward contracts, futures contracts, and options on futures contracts. This limitation does not apply to foreign currency transactions, including, without limitation, forward currency contracts;

activities in the same industry, provided that: (i) there is no limitation with respect to obligations issued or guaranteed by the U.S. Government, any state or territory of the United States, or any of their agencies, instrumentalities or political subdivisions; and (ii) notwithstanding this limitation or any other fundamental investment limitation, assets may be invested in the securities of one or more management investment companies to the extent permitted by the 1940 Act, the rules and regulations thereunder and any exemptive relief obtained by the Fund;

Make loans, except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any exemptive relief obtained by the Fund;

Borrow money or issue senior securities except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any exemptive relief obtained by the Fund; and

Purchase securities (except securities issued or guaranteed by the U.S. Government, its agencies or instrumentalities) of any one issuer if, as a result, more than 5% of its total assets will be invested in the securities of such issuer or it would own more than 10% of the voting securities of such issuer, except that: (i) up to 25% of its total assets may be invested without regard to these limitations; and (ii) the Fund’s assets may be invested in the securities of one or more management investment companies to the extent permitted by the 1940 Act, the rules and regulations thereunder and any exemptive relief obtained by the Fund.

Non-Fundamental Investment Policies

The Fund may not purchase securities of other investment companies except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief. If shares of the Fund are purchased by another fund in reliance on Section 12(d)(1)(G) of the 1940 Act, for so long as shares of the Fund are held by such fund, the Fund will not purchase securities of a registered open-end investment company or registered unit investment trust in reliance on Section 12(d)(1)(F) or Section 12(d)(1)(G) of the 1940 Act.

The Fund may not invest more than 15% of its net assets in illiquid securities.

The Fund may not sell securities short, except as permitted by the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief.

To the extent the Fund is subject to Rule 35d-1 under the 1940 Act (the Names Rule), and does not otherwise have a fundamental investment policy in place to comply with the Names Rule, it has adopted the following non-fundamental policy: Shareholders will receive at least 60 days’ notice of any change to the Fund’s investment objective or principal investment strategies made in order to comply with the Names Rule. The notice will be provided in plain English in a separate written document, and will contain the following prominent statement or similar statement in bold-face type: “Important Notice Regarding Change in Investment Policy.” This statement will appear on both the notice and the envelope in which it is delivered, unless it is delivered separately from other communications to investors, in which case the statement will appear either on the notice or the envelope in which the notice is delivered.

Exemptive Orders

In addition to the policies outlined above, the Columbia Funds Family has received the following exemptive orders from the SEC which enable the Fund to participate in certain transactions beyond the investment limitations described above or described in otherwise applicable restrictions:

Pursuant to an exemptive order dated October 5, 1993, all current and future Funds advised by the Adviser may, subject to certain conditions, pool their uninvested cash balances in one or more joint accounts and use the daily balance of such accounts to enter into repurchase agreements, including the condition that such agreements have a maturity of not more than seven days.

Pursuant to an exemptive order dated September 5, 2003, the Fund may, subject to certain conditions, borrow money from other Funds in the Columbia Funds Family for temporary emergency purposes in order to facilitate redemption requests, or for other purposes consistent with Fund investment policies and restrictions. All loans are set at an interest rate between the rates charged on overnight repurchase agreements and short-term bank loans.

Permissible Investments and Related Risks

The Fund’s prospectuses identify and summarize the individual types of securities in which the Fund invests as part of its principal investment strategies and the principal risks associated with such investments.

The table below identifies for the Fund certain types of securities in which it is permitted to invest, including certain types of securities that are described in the Fund’s prospectuses. The Fund generally has the ability to invest 10% or more of its total assets in each type of security described in its prospectuses (and in each sub-category of such security type described in this SAI). To the extent a type of security identified below for the Fund is not described in the Fund’s prospectuses (or as a sub-category of such security type in this SAI), the Fund generally invests less than 10% of the Fund’s total assets in such security type.

Information about individual types of securities (including certain of their associated risks) in which the Fund may invest is set forth below. The Fund’s investment in these types of securities is subject to its investment objective and fundamental and non-fundamental investment policies.

Temporary Defensive Positions. The Fund may temporarily invest in money market instruments or hold cash. It may do so without limit, when the Adviser or subadviser: (i) believes that the market conditions are not favorable for profitable investing; (ii) is unable to locate favorable investment opportunities; or (iii) determines that a temporary defensive position is advisable or necessary in order to meet anticipated redemption requests, or for other reasons. While the Fund engages in such strategies, it may not achieve its investment objective. See also About the Fund’s Investments — Permissible Investments and Related Risks — Money Market Instruments .

Permissible Fund Investments


Investment Type		Short Term Bond Fund
Asset-Backed Securities		ü
Bank Obligations (Domestic and Foreign)		ü
Common Stock		ü
Convertible Securities		ü
Corporate Debt Securities		ü
Derivatives		ü
Index or Linked Securities (Structured Products)		ü
Futures Contracts and Options on Futures Contracts		ü
Stock Options and Stock Index Options		ü
Swap Agreements		ü
Dollar Rolls		ü
Foreign Currency Transactions		ü
Foreign Securities		ü
Guaranteed Investment Contracts (Funding Agreements)		ü
Illiquid Securities		ü
Initial Public Offerings		ü
Investments in Other Investment Companies		ü

Permissible Fund Investments


Investment Type		Short Term Bond Fund
Low and Below Investment Grade Securities		ü
Money Market Instruments		ü
Mortgage-Backed Securities		ü
Municipal Securities		ü
Participation Interests		ü
Preferred Stock		ü
Private Placement and Other Restricted Securities		ü
Real Estate Investment Trusts and Master Limited Partnerships		ü
Repurchase Agreements		ü
Reverse Repurchase Agreements		ü
Stripped Securities		ü
U.S. Government and Related Obligations		ü
Variable- and Floating-Rate Obligations		ü
Warrants and Rights		ü
When-Issued, Delayed Delivery and Forward Commitment Transactions		ü
Zero-Coupon, Pay-in-Kind and Step-Coupon Securities		ü

Asset-Backed Securities

Asset-backed securities represent interests in, or debt instruments that are backed by, pools of various types of assets that generate cash payments generally over fixed periods of time. Such securities entitle the security holders to receive distributions that are tied to the payments made on the underlying assets (less fees paid to the originator, servicer, or other parties, and fees paid for credit enhancement), so that the payments made on the underlying assets effectively pass through to such security holders. Asset-backed securities typically are created by an originator of loans or owner of accounts receivable that sells such underlying assets to a special purpose entity in a process called a securitization. The special purpose entity issues securities that are backed by the payments on the underlying assets, and have a minimum denomination and specific term. Asset-backed securities may be structured as fixed-, variable- or floating-rate obligations or as zero-coupon, pay-in-kind and step-coupon securities and may be privately placed or publicly offered. See Permissible Fund Investments — Variable- and Floating-Rate Obligations, Permissible Fund Investments — Zero-Coupon, Pay-in-Kind and Step-Coupon Securities and Permissible Fund Investments — Private Placement and Other Restricted Securities for more information.

Credit risk is increased for asset-backed securities that are subordinated to another security (i.e., if the holder of an asset-backed security is entitled to receive payments only after payment obligations to holders of the other security are satisfied). The more deeply subordinated the security, the greater the credit risk associated with the security will be.

Bank Obligations (Domestic and Foreign)

Bank obligations include certificates of deposit, bankers’ acceptances, time deposits and promissory notes that earn a specified rate of return and may be issued by (i) a domestic branch of a domestic bank, (ii) a foreign branch of a domestic bank, (iii) a domestic branch of a foreign bank or (iv) a foreign branch of a foreign bank. Bank obligations may be structured as fixed-, variable- or floating-rate obligations. See Permissible Fund Investments — Variable- and Floating-Rate Obligations for more information.

Certificates of deposit, or so-called CDs, typically are interest-bearing debt instruments issued by banks and have maturities ranging from a few weeks to several years. Bankers’ acceptances are time drafts drawn on and accepted by banks, are a customary means of effecting payment for merchandise sold in import-export transactions and are a general source of financing. Yankee dollar certificates of deposit are negotiable CDs issued in the United States by branches and agencies of foreign banks. Eurodollar certificates of deposit are CDs issued by foreign (mainly European) banks with interest and principal paid in U.S. dollars. Such CDs typically have maturities of less than two years and have interest rates that typically are pegged to the London Interbank Offered Rate or LIBOR. A time deposit can be either a savings account or CD that is an obligation of a financial institution for a fixed term. Typically, there are penalties for early withdrawals of time deposits. Promissory notes are written commitments of the maker to pay the payee a specified sum of money either on demand or at a fixed or determinable future date, with or without interest.

Bank investment contracts are issued by banks. Pursuant to such contracts, the Fund may make cash contributions to a deposit fund of a bank. The bank then credits to the Fund payments at floating or fixed interest rates. The Fund also may hold funds on deposit with its custodian for temporary purposes.

Common Stock

be listed, and their shares traded, on domestic stock exchanges, such as the NYSE, or the NASDAQ Stock Market. Domestic and foreign corporations also may have their shares traded on foreign exchanges, such as the London Stock Exchange or Tokyo Stock Exchange. Common stock may be privately placed or publicly offered. See Permissible Fund Investments — Private Placement and Other Restricted Securities for more information.

If a corporation is liquidated, the claims of secured and unsecured creditors and owners of debt securities and “preferred” stock take priority over the claims of those who own common stock.

Convertible Securities

Convertible securities include bonds, debentures, notes, preferred stocks or other securities that may be converted or exchanged (by the holder or by the issuer) into shares of the underlying common stock (or cash or securities of equivalent value) at a stated exchange ratio or predetermined price (the conversion price). As such, convertible securities combine the investment characteristics of debt securities and equity securities. A holder of convertible securities is entitled to receive the income of a bond, debenture or note or the dividend of a preferred stock until the conversion privilege is exercised. The market value of convertible securities generally is a function of, among other factors, interest rates, the rates of return of similar nonconvertible securities and the financial strength of the issuer. The market value of convertible securities tends to decline as interest rates rise and, conversely, to rise as interest rates decline. However, a convertible security’s market value tends to reflect the market price of the common stock of the issuing company when that stock price approaches or is greater than its conversion price. As the market price of the underlying common stock declines, the price of the convertible security tends to be influenced more by the rate of return of the convertible security. Because both interest rate and market movements can influence their value, convertible securities generally are not as sensitive to changes in interest rates as similar debt securities nor generally are they as sensitive to changes in share price as their underlying common stock. Convertible securities may be structured as fixed-, variable- or floating-rate obligations or as zero-coupon, pay-in-kind and step-coupon securities and may be privately placed or publicly offered. See Permissible Fund Investments — Variable- and Floating-Rate Obligations, Permissible Fund Investments — Zero-Coupon, Pay-in-Kind and Step-Coupon Securities and Permissible Fund Investments — Private Placement and Other Restricted Securities for more information.

Corporate Debt Securities

Corporate debt securities include fixed income securities issued by businesses to finance their operations. Notes, bonds, debentures and commercial paper are the most common types of corporate debt securities, with the primary difference being their interest rates, maturity dates and secured or unsecured status. Commercial paper has the shortest term and usually is unsecured. The broad category of corporate debt securities includes debt issued by domestic or foreign companies of all kinds, including those with small-, mid- and large-capitalizations. The category also includes bank loans, as well as assignments, participations and other interests in bank loans. Corporate debt securities may be rated investment grade or below investment grade and may be structured as fixed-, variable- or floating-rate obligations or as zero-coupon, pay-in-kind and step-coupon securities and may be privately placed or publicly offered. See Permissible Fund Investments — Variable- and Floating-Rate Obligations, Permissible Fund Investments — Zero-Coupon, Pay-in-Kind and Step-Coupon Securities and Permissible Fund Investments — Private Placement and Other Restricted Securities for more information.

Investing in corporate debt securities is subject to certain risks including, among others, credit and interest rate risk. Credit risk is the risk that the Fund could lose money if the issuer of a corporate debt security is unable to pay interest or repay principal when it becomes due. Some corporate debt securities that are rated below investment grade by an NRSRO generally are considered speculative because they present a greater risk of loss, including default, than higher quality debt securities. The credit risk of a particular issuer’s debt security may vary based on its priority for repayment. For example, higher ranking (senior) debt securities have a higher priority than and, therefore, may be paid in full before, lower ranking (subordinated) securities. In addition, in the

event of bankruptcy, holders of higher-ranking senior securities may receive amounts otherwise payable to the holders of more junior securities. Interest rate risk is the risk that the value of certain corporate debt securities will tend to fall when interest rates rise. In general, corporate debt securities with longer terms tend to fall more in value when interest rates rise than do corporate debt securities with shorter terms.

Derivatives

General

The Fund may use derivatives for a variety of reasons, including, for example: (i) to enhance its return; (ii) to attempt to protect against possible changes in the market value of securities held in or to be purchased for its portfolio resulting from securities markets or currency exchange rate fluctuations (i.e., to hedge); (iii) to protect its unrealized gains reflected in the value of its portfolio securities; (iv) to facilitate the sale of such securities for investment purposes; (v) to reduce transaction costs; and/or (vi) to manage the effective maturity or duration of its portfolio.

The Fund’s use of derivatives presents risks different from, and possibly greater than, the risks associated with investing directly in traditional securities. The use of derivatives can lead to losses because of adverse movements in the price or value of the underlying security, asset, index or reference rate, which may be magnified by certain features of the derivatives. These risks are heightened when the Fund uses derivatives to enhance its return or as a substitute for a position or security, rather than solely to hedge or offset the risk of a position or security held by the Fund. There is also a risk that the derivative will not correlate well with the security for which it is substituting. The Fund’s use of derivatives to leverage risk also may exaggerate a loss, potentially causing the Fund to lose more money than if it had invested in the underlying security, or limit a potential gain. The success of management’s derivative strategies will depend on its ability to assess and predict the impact of market or economic developments on the underlying security, asset, index or reference rate and the derivative itself, without necessarily the benefit of observing the performance of the derivative under all possible market conditions. Other risks arise from the Fund’s potential inability to terminate or sell its derivative positions as a liquid secondary market for such positions may not exist at times when the Fund may wish to terminate or sell them. Over-the-counter instruments (investments not traded on an exchange) may be illiquid. Derivatives traded in the over-the-counter market are subject to the risk that the other party will not meet its obligations. Also, with some derivative strategies there is the risk that the Fund may not be able to find a suitable derivative transaction counterparty, and thus may be unable to invest in derivatives altogether. The use of derivatives may also increase the amount and accelerate the timing of taxes payable by shareholders.

The Fund may use any or all of the above investment techniques and may purchase different types of derivative instruments at any time and in any combination. There is no particular strategy that dictates the use of one technique over another, as the use of derivatives is a function of numerous variables, including market conditions.

Index or Linked Securities (Structured Products)

Indexed and Inverse Floating Rate Securities . The Fund may invest in securities that provide a potential return based on a particular index of value or interest rates. For example, the Fund may invest in securities that pay interest based on an index of interest rates. The principal amount payable upon maturity of certain securities also may be based on the value of the index. To the extent the Fund invests in these types of securities, the Fund’s return on such securities will rise and fall with the value of the particular index: that is, if the value of the index falls, the value of the indexed securities owned by the Fund will fall. Interest and principal payable on certain securities may also be based on relative changes among particular indices.

The Fund may also invest in so-called “inverse floaters” or “residual interest bonds” on which the interest rates vary inversely with a floating rate (which may be reset periodically by a dutch auction, a remarketing agent, or by reference to a short-term tax-exempt interest rate index). The Fund may purchase synthetically-created inverse floating rate bonds evidenced by custodial or trust receipts. Generally, income on inverse floating rate bonds will decrease when interest rates increase, and will increase when interest rates decrease. Such securities have the effect of providing a degree of investment leverage, since they may increase or decrease in value in response to changes, as an illustration, in market interest rates at a rate that is a multiple of the rate at which fixed-rate securities increase or decrease in response to such changes. As a result, the market values of such securities will generally be more volatile than the market values of fixed-rate securities. To seek to limit the volatility of these securities, the Fund may purchase inverse floating obligations that have shorter-term maturities or that contain limitations on the extent to which the interest rate may vary. Certain investments in such obligations may be illiquid. The Fund may invest in indexed and inverse securities for hedging purposes or to seek to increase returns. When used for hedging purposes, indexed and inverse securities involve correlation risk. Furthermore, where such a security includes a contingent liability, in the event of an adverse movement in the underlying index or interest rate, the Fund may be required to pay substantial additional margin to maintain the position.

Credit Linked Securities . Among the income producing securities in which the Fund may invest are credit linked securities. The issuers of these securities frequently are limited purpose trusts or other special purpose vehicles that, in turn, invest in a derivative instrument or basket of derivative instruments, such as credit default swaps, interest rate swaps and other securities, in order to provide exposure to certain fixed income markets. For instance, the Fund may invest in credit linked securities as a cash management tool in order to gain exposure to a certain market and/or to remain fully invested when more traditional income producing securities are not available.

receive a stream of payments over the term of the swap agreements provided that no event of default has occurred with respect to the referenced debt obligation upon which the swap is based. If a default occurs, the stream of payments may stop and the issuer would be obligated to pay the counterparty the par (or other agreed upon value) of the referenced debt obligation. This, in turn, would reduce the amount of income and/or principal that the Fund would receive. The Fund’s investments in these instruments are indirectly subject to the risks associated with derivative instruments, including, among others, credit risk, default or similar event risk, counterparty risk, interest rate risk, leverage risk and management risk. These securities generally are exempt from registration under the 1933 Act. Accordingly, there may be no established trading market for the securities and they may constitute illiquid investments.

Index-, Commodity-, Currency- and Equity-Linked Securities . “Index-linked” or “commodity-linked” notes are debt securities of companies that call for interest payments and/or payment at maturity in different terms than the typical note where the borrower agrees to make fixed interest payments and to pay a fixed sum at maturity. Principal and/or interest payments on an index-linked or commodity-linked note depend on the performance of one or more market indices, such as the S&P 500 ^® Index, a weighted index of commodity futures such as crude oil, gasoline and natural gas or the market prices of a particular commodity or basket of commodities. Equity-linked securities are short-term or intermediate term instruments having a value at maturity and/or interest rate determined by reference to the market prices of one or more equity securities. At maturity, the principal amount of an equity-linked debt security is often exchanged for common stock of the issuer or is payable in an amount based on the issuer’s common stock price at the time of maturity. Currency-linked debt securities are short-term or intermediate-term instruments having a value at maturity, and/or an interest rate, determined by reference to one or more foreign currencies. Payment of principal or periodic interest may be calculated as a multiple of the movement of one currency against another currency, or against an index.

Linked securities are often issued by unit investment trusts. Examples of this include such index-linked securities as S&P Depositary Receipts (SPDRs), which is an interest in a unit investment trust holding a portfolio of securities linked to the S&P 500 ^® Index, and a type of exchange-traded fund (ETF). Because a unit investment trust is an investment company under the 1940 Act, the Fund’s investments in SPDRs are subject to the limitations set forth in Section 12(d)(1)(A) of the 1940 Act. SPDRs closely track the underlying portfolio of securities, trade like a share of common stock and pay periodic dividends proportionate to those paid by the portfolio of stocks that comprise the S&P 500 ^® Index. As a holder of interests in a unit investment trust, the Fund would indirectly bear its ratable share of that unit investment trust’s expenses. At the same time, the Fund would continue to pay its own management and advisory fees and other expenses, as a result of which the Fund and its shareholders in effect would be absorbing levels of fees with respect to investments in such unit investment trusts.

Investments in “linked” securities have the potential to lead to significant losses because of unexpected movements in the underlying financial asset, index, currency or other investment. The ability of the Fund to utilize linked-securities successfully will depend on its ability correctly to predict pertinent market movements, which cannot be assured. Because currency-linked securities usually relate to foreign currencies, some of which may be currency from emerging market countries, there are certain additional risks associated with such investments.

Futures Contracts and Options on Futures Contracts

Futures Contracts. A futures contract sale creates an obligation by the seller to deliver the type of security or other asset called for in the contract at a specified delivery time for a stated price. A futures contract purchase creates an obligation by the purchaser to take delivery of the type of security or other asset called for in the contract at a specified delivery time for a stated price. The specific security or other asset delivered or taken at the settlement date is not determined until on or near that date. The determination is made in accordance with the rules of the exchange on which the futures contract was made. The Fund may enter into futures contracts which are traded on national or foreign futures exchanges and are standardized as to maturity date and underlying security or other asset. Futures exchanges and trading in the United States are regulated under the Commodity Exchange Act (CEA) by the Commodity Futures Trading Commission (CFTC), a U.S. Government agency.

Traders in futures contracts may be broadly classified as either “hedgers” or “speculators.” Hedgers use the futures markets primarily to offset unfavorable changes (anticipated or potential) in the value of securities or other assets currently owned or expected to be acquired by them. Speculators less often own the securities or other assets underlying the futures contracts which they trade, and generally use futures contracts with the expectation of realizing profits from fluctuations in the value of the underlying securities or other assets. Pursuant to a notice of eligibility claiming exclusion from the definition of commodity pool operator filed with the CFTC and the National Futures Association on behalf of the Fund, neither the Trust nor the Fund is deemed to be a “commodity pool operator” under the CEA, and, accordingly, they are not subject to registration or regulation as such under the CEA.

Upon entering into futures contracts, in compliance with the SEC’s requirements, cash or liquid securities, equal in value to the amount of the Fund’s obligation under the contract (less any applicable margin deposits and any assets that constitute “cover” for such obligation), will be segregated with the Fund’s custodian.

Unlike when the Fund purchases or sells a security, no price is paid or received by the Fund upon the purchase or sale of a futures contract, although the Fund is required to deposit with its custodian in a segregated

account in the name of the futures broker an amount of cash and/or U.S. Government securities in order to initiate and maintain open positions in futures contracts. This amount is known as “initial margin.” The nature of initial margin in futures transactions is different from that of margin in security transactions, in that futures contract margin does not involve the borrowing of funds by the Fund to finance the transactions. Rather, initial margin is in the nature of a performance bond or good faith deposit intended to assure completion of the contract (delivery or acceptance of the underlying security or other asset) that is returned to the Fund upon termination of the futures contract, assuming all contractual obligations have been satisfied. Minimum initial margin requirements are established by the relevant futures exchange and may be changed. Brokers may establish deposit requirements which are higher than the exchange minimums. Futures contracts are customarily purchased and sold on margin which may range upward from less than 5% of the value of the contract being traded. Subsequent payments, called “variation margin,” to and from the broker (or the custodian) are made on a daily basis as the price of the underlying security or other asset fluctuates, a process known as “marking to market.” If the futures contract price changes to the extent that the margin on deposit does not satisfy margin requirements, payment of additional variation margin will be required. Conversely, a change in the contract value may reduce the required margin, resulting in a repayment of excess margin to the contract holder. Variation margin payments are made for as long as the contract remains open. The Fund expects to earn interest income on its margin deposits.

Although futures contracts by their terms call for actual delivery or acceptance of securities or other assets (stock index futures contracts or futures contracts that reference other intangible assets do not permit delivery of the referenced assets), the contracts usually are closed out before the settlement date without the making or taking of delivery. The Fund may elect to close some or all of its futures positions at any time prior to their expiration. The purpose of taking such action would be to reduce or eliminate the position then currently held by the Fund. Closing out an open futures position is done by taking an opposite position (“buying” a contract which has previously been “sold,” “selling” a contract previously “purchased”) in an identical contract (i.e., the same aggregate amount of the specific type of security or other asset with the same delivery date) to terminate the position. Final determinations are made as to whether the price of the initial sale of the futures contract exceeds or is below the price of the offsetting purchase, or whether the purchase price exceeds or is below the offsetting sale price. Final determinations of variation margin are then made, additional cash is required to be paid by or released to the Fund, and the Fund realizes a loss or a gain. Brokerage commissions are incurred when a futures contract is bought or sold.

Successful use of futures contracts by the Fund is subject to the Adviser’s ability to predict correctly movements in the direction of interest rates and other factors affecting securities and commodities markets. This requires different skills and techniques than those required to predict changes in the prices of individual securities. The Fund, therefore, bears the risk that future market trends will be incorrectly predicted.

In the event of adverse price movements, the Fund would continue to be required to make daily cash payments in order to maintain its required margin. In such a situation, if the Fund has insufficient cash, it may have to sell portfolio securities in order to meet daily margin requirements at a time when it may be disadvantageous to do so. The inability to close the futures position also could have an adverse impact on the ability to hedge effectively.

To reduce or eliminate a hedge position held by the Fund, the Fund may seek to close out a position. The ability to establish and close out positions will be subject to the development and maintenance of a liquid secondary market. It is not certain that this market will develop or continue to exist for a particular futures contract, which may limit the Fund’s ability to realize its profits or limit its losses. Reasons for the absence of a liquid secondary market on an exchange include the following: (i) there may be insufficient trading interest in certain contracts; (ii) restrictions may be imposed by an exchange on opening transactions, closing transactions or both; (iii) trading halts, suspensions or other restrictions may be imposed with respect to particular classes or series of contracts, or underlying securities; (iv) unusual or unforeseen circumstances, such as volume in excess of trading or clearing capability, may interrupt normal operations on an exchange; (v) the facilities of an exchange or a clearing corporation may not at all times be adequate to handle current trading volume; or (vi) one or more exchanges could, for economic or other reasons, decide or be compelled at some future date to discontinue the trading of contracts (or a particular class or series of contracts), in which event the secondary market on that exchange (or in the class or series of contracts) would cease to exist, although outstanding contracts on the exchange that had been issued by a clearing corporation as a result of trades on that exchange would continue to be exercisable in accordance with their terms.

Interest Rate Futures Contracts . Bond prices are established in both the cash market and the futures market. In the cash market, bonds are purchased and sold with payment for the full purchase price of the bond being made in cash, generally within five business days after the trade. In the futures market, a contract is made to purchase or sell a bond in the future for a set price on a certain date. Historically, the prices for bonds established in the futures markets have tended to move generally in the aggregate in concert with the cash market prices and have maintained fairly predictable relationships. Accordingly, the Fund may use interest rate futures contracts as a defense, or hedge, against anticipated interest rate changes. The Fund presently could accomplish a similar result to that which it hopes to achieve through the use of interest rate futures contracts by selling bonds with long maturities and investing in bonds with short maturities when interest rates are expected to increase, or conversely, selling bonds with short maturities and investing in bonds with long maturities when interest rates are expected to decline. However, because of the liquidity that is often available in the futures market, the protection is more likely to be achieved, perhaps at a lower cost and without changing the rate of interest being earned by the Fund, through using futures contracts.

Interest rate futures contracts are traded in an auction environment on the floors of several exchanges — principally, the Chicago Board of Trade, the Chicago Mercantile Exchange and the New York Futures Exchange. Each exchange guarantees performance under contract provisions through a clearing corporation, a nonprofit organization managed by the exchange membership. A public market exists in futures contracts covering various financial instruments including long-term U.S. Treasury Bonds and Notes; GNMA modified pass-through mortgage backed securities; three-month U.S. Treasury Bills; and ninety-day commercial paper. The Fund may also invest in exchange-traded Eurodollar contracts, which are interest rate futures on the forward level of LIBOR. These contracts are generally considered liquid securities and trade on the Chicago Mercantile Exchange. Such Eurodollar contracts are generally used to “lock-in” or hedge the future level of short-term rates. The Fund may trade in any interest rate futures contracts for which there exists a public market, including, without limitation, the foregoing instruments.

Index Futures Contracts . An index futures contract is a contract to buy or sell units of an index at a specified future date at a price agreed upon when the contract is made. Entering into a contract to buy units of an index is commonly referred to as buying or purchasing a contract or holding a long position in the index. Entering into a contract to sell units of an index is commonly referred to as selling a contract or holding a short position in the index. A unit is the current value of the index. The Fund may enter into stock index futures contracts, debt index futures contracts, or other index futures contracts appropriate to its objective(s).

There are several risks in connection with the use by the Fund of index futures as a hedging device. One risk arises because of the imperfect correlation between movements in the prices of the index futures and movements in the prices of securities which are the subject of the hedges. The Adviser will attempt to reduce this risk by

selling, to the extent possible, futures on indices the movements of which will, in its judgment, have a significant correlation with movements in the prices of the Fund’s portfolio securities sought to be hedged.

Options on Futures Contracts. The Fund may purchase and write call and put options on those futures contracts that it is permitted to buy or sell. The Fund may use such options on futures contracts in lieu of writing options directly on the underlying securities or other assets or purchasing and selling the underlying futures contracts. Such options generally operate in the same manner as options purchased or written directly on the underlying investments. A futures option gives the holder, in return for the premium paid, the right to buy from (call) or sell to (put) the writer of the option a futures contract at a specified price at any time during the period of the option. Upon exercise, the writer of the option is obligated to pay the difference between the cash value of the futures contract and the exercise price. Like the buyer or seller of a futures contract, the holder or writer of an option has the right to terminate its position prior to the scheduled expiration of the option by selling or purchasing an option of the same series, at which time the person entering into the closing purchase transaction will realize a gain or loss. There is no guarantee that such closing purchase transactions can be effected.

The Fund will enter into written options on futures contracts only when, in compliance with the SEC’s requirements, cash or liquid securities equal in value to the underlying security’s or other asset’s value (less any applicable margin deposits) have been deposited in a segregated account. The Fund will be required to deposit initial margin and maintenance margin with respect to put and call options on futures contracts written by it pursuant to brokers’ requirements similar to those described above.

Investments in futures options involve some of the same risks that are involved in connection with investments in futures contracts (for example, the existence of a liquid secondary market). In addition, the purchase of an option also entails the risk that changes in the value of the underlying futures contract will not be fully reflected in the value of the option purchased. There may be circumstances when the purchase of a call or put option on a futures contract would result in a loss to the Fund when the purchase or sale of a futures contract would not, such as when there is no movement in the prices of the hedged investments. In general, the market prices of options can be expected to be more volatile than the market prices on the underlying futures contracts. Compared to the purchase or sale of futures contracts, however, the purchase of call or put options on futures contracts may frequently involve less potential risk to the Fund because the maximum amount at risk is the premium paid for the options (plus transaction costs).

Successful use of index futures by the Fund is also subject to the Adviser’s ability to predict correctly movements in the direction of the market. It is possible that, for example, where the Fund has sold futures to hedge its portfolio against a decline in the market, the index on which the futures are written may advance and the value of securities held in the Fund’s portfolio may decline. If this occurred, the Fund would lose money on the futures and also experience a decline in the value of its portfolio securities, as the Fund’s ability to effectively hedge all or a portion of the securities in its portfolio, in anticipation of or during a market decline, through transactions in futures or put options on stock indices, depends on the degree to which price movements in the underlying index correlate with the price movements of the securities held by the Fund. In as much as the Fund’s securities will not duplicate the components of an index, the correlation will not be perfect. Consequently, the Fund bears the risk that the prices of its securities being hedged will not move to the same extent as do the prices of its put options on the stock indices. It is also possible that, if the Fund has hedged against the possibility of a decline in the market adversely affecting securities held in its portfolio and securities prices increase instead, the

Fund will lose part or all of the benefit of the increased values of those securities that it has hedged, because it will have offsetting losses in its futures positions. In addition, in such situations, if the Fund has insufficient cash, it may have to sell securities to meet daily variation margin requirements.

There is also the risk of loss by the Fund of margin deposits in the event of bankruptcy of a broker with whom the Fund has an open position in a futures contract or related option. Most futures exchanges limit the amount of fluctuation permitted in some contract prices during a single trading day. The daily limit establishes the maximum amount that the price of a futures contract may vary either up or down from the previous day’s settlement price at the end of a trading session. Once the daily limit has been reached in a particular type of contract, no trades may be made on that day at a price beyond that limit. The daily limit governs only price movement during a particular trading day and, therefore, does not limit potential losses, because the limit may prevent the liquidation of unfavorable positions. Futures contract prices have occasionally moved to the daily limit for several consecutive trading days with little or no trading, thereby preventing prompt liquidation of futures positions and subjecting some futures traders to substantial losses.

Options on Index Futures Contracts . The Fund may also purchase and sell options on index futures contracts. Options on index futures give the purchaser the right, in return for the premium paid, to assume a position in an index futures contract (a long position if the option is a call and a short position if the option is a put), at a specified exercise price at any time during the period of the option. Upon exercise of the option, the delivery of the futures position by the writer of the option to the holder of the option will be accompanied by delivery of the accumulated balance in the writer’s futures margin account, which represents the amount by which the market price of the index futures contract, at exercise, exceeds (in the case of a call) or is less than (in the case of a put) the exercise price of the option on the index future. If an option is exercised on the last trading day prior to the expiration date of the option, the settlement will be made entirely in cash equal to the difference between the exercise price of the option and the closing level of the index on which the future is based on the expiration date. Purchasers of options who fail to exercise their options prior to the exercise date suffer a loss of the premium paid.

There are various risks in connection with the use by the Fund of index futures as a hedging device. For example, a risk arises because of the imperfect correlation between movements in the prices of the index futures and movements in the prices of securities which are the subject of the hedges. The Adviser will attempt to reduce this risk by selling, to the extent possible, futures on indices the movements of which will, in its judgment, have a significant correlation with movements in the prices of the Fund’s portfolio securities sought to be hedged; there can be no assurance that the Adviser will be successful in doing so.

Stock Options and Stock Index Options

The Fund may purchase and write (i.e., sell) put and call options. Such options may relate to particular stocks or stock indices, and may or may not be listed on a domestic or foreign securities exchange and may or

may not be issued by the Options Clearing Corporation (OCC). Stock index options are put options and call options on various stock indices. In most respects, they are identical to listed options on common stocks.

The successful use of the Fund’s options strategies depends on the ability of the Adviser to forecast interest rate and market movements correctly. When it purchases an option, the Fund runs the risk that it will lose its entire investment in the option in a relatively short period of time, unless the Fund exercises the option or enters into a closing sale transaction for such option during the life of the option. If the price of the underlying security does not rise (in the case of a call) or fall (in the case of a put) to an extent sufficient to cover the option premium and transaction costs, the Fund will lose part or all of its investment in the option. This contrasts with an investment by the Fund in the underlying securities, since the Fund may continue to hold its investment in those securities notwithstanding the lack of a change in price of those securities.

The effective use of options also depends on the Fund’s ability to terminate option positions at times when the Adviser deems it desirable to do so. Although the Fund will take an option position only if the Adviser believes there is a liquid secondary market for the option, there is no assurance that the Fund will be able to effect closing transactions at any particular time or at an acceptable price.

If a secondary trading market in options were to become unavailable, the Fund could no longer engage in closing transactions. The writer in such circumstances would be subject to the risk of market decline or appreciation in the instrument during such period. If an option purchased by the Fund expires unexercised, the Fund will realize a loss equal to the premium paid. Reasons for the absence of a liquid secondary market on an exchange include the following: (i) there may be insufficient trading interest in certain options; (ii) restrictions may be imposed by an exchange on opening transactions or closing transactions or both; (iii) trading halts, suspensions or other restrictions may be imposed with respect to particular classes or series of options, or underlying securities; (iv) unusual or unforeseen circumstances, such as volume in excess of trading or clearing capability, may interrupt normal operations on an exchange; (v) the facilities of an exchange or a clearing corporation may not at all times be adequate to handle current trading volume; or (vi) one or more exchanges could, for economic or other reasons, decide or be compelled at some future date to discontinue the trading of options (or a particular class or series of options), in which event the secondary market on that exchange (or in the class or series of options) would cease to exist, although outstanding options on the exchange that had been issued by a clearing corporation as a result of trades on that exchange would continue to be exercisable in accordance with their terms.

Disruptions in the markets for the securities underlying options purchased or sold by the Fund could result in losses on the options. If trading is interrupted in an underlying security, the trading of options on that security is normally halted as well. As a result, the Fund as purchaser or writer of an option will be unable to close out its positions until options trading resumes, and it may be faced with losses if trading in the security reopens at a substantially different price. In addition, the OCC or other options markets may impose exercise restrictions. If a prohibition on exercise is imposed at a time when trading in the option has also been halted, the Fund as purchaser or writer of an option will be locked into its position until one of the two restrictions has been lifted. If a prohibition on exercise remains in effect until an option owned by the Fund has expired, the Fund could lose the entire value of its option.

Dealer (Over-the-Counter) Options . Dealer options are options negotiated individually through dealers rather than traded on an exchange. Certain risks are specific to dealer options. While the Fund might look to a clearing corporation to exercise exchange-traded options, if the Fund purchases a dealer option it must rely on the selling dealer to perform if the Fund exercises the option. Failure by the dealer to do so would result in the loss of the premium paid by the Fund as well as loss of the expected benefit of the transaction. Exchange-traded options generally have a continuous liquid market while dealer options more often may not. Consequently, the Fund can realize the value of a dealer option it has purchased only by exercising or reselling the option to the issuing dealer. Similarly, when the Fund writes a dealer option, the Fund can close out the option prior to its expiration only by entering into a closing purchase transaction with the dealer. While the Fund seeks to enter into dealer options only with dealers who will agree to and can enter into closing transactions with the Fund, no assurance exists that the Fund will at any time be able to liquidate a dealer option at a favorable price at any time prior to expiration. Unless the Fund, as a covered dealer call option writer, can effect a closing purchase transaction, it will not be able to liquidate securities (or other assets) used as cover until the option expires or is exercised. In the event of insolvency of the other party, the Fund may be unable to liquidate a dealer option. With respect to options written by the Fund, the inability to enter into a closing transaction may result in material losses to the Fund. For example, because the Fund must maintain a secured position with respect to any call option on a security it writes, the Fund may not sell the assets, which it has segregated to secure the position while it is obligated under the option. This requirement may impair the Fund’s ability to sell portfolio securities at a time when such sale might be advantageous.

The Fund generally will treat purchased dealer options as illiquid securities. The Fund may treat the cover used for written dealer options as liquid if the dealer agrees that the Fund may repurchase the dealer option it has written for a maximum price to be calculated by a predetermined formula. In such cases, the dealer option would be considered illiquid only to the extent the maximum purchase price under the formula exceeds the intrinsic value of the option.

Writing Covered Options . The Fund may write covered call options and covered put options on securities held in its portfolio when, in the opinion of the Adviser, such transactions are consistent with the Fund’s investment goal and policies. Call options written by the Fund give the purchaser the right to buy the underlying securities from the Fund at the stated exercise price at any time prior to the expiration date of the option, regardless of the security’s market price; put options give the purchaser the right to sell the underlying securities to the Fund at the stated exercise price at any time prior to the expiration date of the option, regardless of the security’s market price.

The Fund may write only covered options, which means that, so long as the Fund is obligated as the writer of a call option, it will own the underlying securities subject to the option (or comparable securities satisfying the cover requirements of securities exchanges). In the case of put options, the Fund will hold cash and/or high-grade short-term debt obligations equal to the price to be paid if the option is exercised. In addition, the Fund will be considered to have covered a put or call option if and to the extent that it holds an option that offsets some or all of the risk of the option it has written. The Fund may write combinations of covered puts and calls (straddles) on the same underlying security.

The Fund will receive a premium from writing a put or call option, which increases the Fund’s return on the underlying security if the option expires unexercised or is closed out at a profit. The amount of the premium reflects, among other things, the relationship between the exercise price and the current market value of the underlying security, the volatility of the underlying security, the amount of time remaining until expiration, current interest rates, and the effect of supply and demand in the options market and in the market for the

underlying security. By writing a call option, the Fund limits its opportunity to profit from any increase in the market value of the underlying security above the exercise price of the option but continues to bear the risk of a decline in the value of the underlying security. By writing a put option, the Fund assumes the risk that it may be required to purchase the underlying security for an exercise price higher than the security’s then-current market value, resulting in a potential capital loss unless the security subsequently appreciates in value.

The Fund’s obligation to sell an instrument subject to a call option written by it, or to purchase an instrument subject to a put option written by it, may be terminated prior to the expiration date of the option by the Fund’s execution of a closing purchase transaction, which is effected by purchasing on an exchange an offsetting option of the same series (i.e., same underlying instrument, exercise price and expiration date) as the option previously written. A closing purchase transaction will ordinarily be effected in order to realize a profit on an outstanding option, to prevent an underlying instrument from being called, to permit the sale of the underlying instrument or to permit the writing of a new option containing different terms on such underlying instrument. The Fund realizes a profit or loss from a closing purchase transaction if the cost of the transaction (option premium plus transaction costs) is less or more than the premium received from writing the option. Because increases in the market price of a call option generally reflect increases in the market price of the security underlying the option, any loss resulting from a closing purchase transaction may be offset in whole or in part by unrealized appreciation of the underlying security.

If the Fund writes a call option but does not own the underlying security, and when it writes a put option, the Fund may be required to deposit cash or securities with its broker as “margin” or collateral for its obligation to buy or sell the underlying security. As the value of the underlying security varies, the Fund may also have to deposit additional margin with the broker. Margin requirements are complex and are fixed by individual brokers, subject to minimum requirements currently imposed by the Federal Reserve Board and by stock exchanges and other self-regulatory organizations.

Purchasing Put Options . The Fund may purchase put options to protect its portfolio holdings in an underlying security against a decline in market value. Such hedge protection is provided during the life of the put option since the Fund, as holder of the put option, is able to sell the underlying security at the put exercise price regardless of any decline in the underlying security’s market price. For a put option to be profitable, the market price of the underlying security must decline sufficiently below the exercise price to cover the premium and transaction costs. By using put options in this manner, the Fund will reduce any profit it might otherwise have realized from appreciation of the underlying security by the premium paid for the put option and by transaction costs.

Purchasing Call Options . The Fund may purchase call options to hedge against an increase in the price of securities that the Fund wants ultimately to buy. Such hedge protection is provided during the life of the call option since the Fund, as holder of the call option, is able to buy the underlying security at the exercise price regardless of any increase in the underlying security’s market price. In order for a call option to be profitable, the market price of the underlying security must rise sufficiently above the exercise price to cover the premium and transaction costs. These costs will reduce any profit the Fund might have realized had it bought the underlying security at the time it purchased the call option.

Over-the-Counter (OTC) Options . The Fund will enter into OTC options transactions only with primary dealers in U.S. Government securities and, in the case of OTC options written by the Fund, only pursuant to agreements that will assure that the Fund will at all times have the right to repurchase the option written by it from the dealer at a specified formula price. The Fund will treat the amount by which such formula price exceeds the amount, if any, by which the option may be “in-the-money” as an illiquid investment. It is the present policy of the Fund not to enter into any OTC option transaction if, as a result, more than 15% (10% in some cases, refer to your Fund’s prospectuses) of the Fund’s net assets would be invested in (i) illiquid investments (determined under the foregoing formula) relating to OTC options written by the Fund, (ii) OTC options purchased by the Fund, (iii) securities which are not readily marketable, and (iv) repurchase agreements maturing in more than seven days.

Index Options . As an alternative to purchasing call and put options on index futures, the Fund may purchase call and put options on the underlying indices themselves. Such options could be used in a manner identical to the use of options on index futures. Options involving securities indices provide the holder with the right to make or receive a cash settlement upon exercise of the option based on movements in the relevant index. Such options must be listed on a national securities exchange and issued by the OCC. Such options may relate to various stock indices, except that the Fund may not write covered options on an index.

Foreign Stock Index Options. The Fund may, for the purpose of hedging its portfolio, subject to applicable securities regulations, purchase and write put and call options on foreign stock indices listed on foreign and domestic stock exchanges.

Swap Agreements

Swap agreements are derivative instruments that can be individually negotiated and structured to include exposure to a variety of different types of investments or market factors. Depending on their structure, swap agreements may increase or decrease the Fund’s exposure to long- or short-term interest rates, foreign currency values, mortgage securities, corporate borrowing rates, or other factors such as security prices or inflation rates. The Fund may enter into a variety of swap agreements, including interest rate, index, commodity, equity, credit default and currency exchange rate swap agreements, and other types of swap agreements such as caps, collars and floors. The Fund also may enter into swaptions, which are options to enter into a swap agreement.

Swap agreements will tend to shift the Fund’s investment exposure from one type of investment to another. For example, if the Fund agreed to pay fixed rates in exchange for floating rates while holding fixed-rate bonds, the swap would tend to decrease the Fund’s exposure to long-term interest rates. Another example is if the Fund agreed to exchange payments in dollars for payments in foreign currency, the swap agreement would tend to decrease the Fund’s exposure to U.S. interest rates and increase its exposure to foreign currency and interest rates.

investments. Because they are two party contracts and because they may have terms of greater than seven days, swap agreements may be considered to be illiquid. Moreover, the Fund bears the risk of loss of the amount expected to be received under a swap agreement in the event of the default or bankruptcy of a swap agreement counterparty. The most significant factor in the performance of swap agreements is the change in the specific interest rate, currency, or other factor that determines the amounts of payments due to and from the Fund. If a swap agreement calls for payments by the Fund, the Fund must be prepared to make such payments when due. In addition, if the counterparty’s creditworthiness declines, the value of a swap agreement likely would decline, potentially resulting in losses for the Fund. The Fund will closely monitor the credit of a swap agreement counterparty in order to attempt to minimize this risk. The Fund may also suffer losses if it is unable to terminate outstanding swap agreements (either by assignment or other disposition) or reduce its exposure through offsetting transactions (i.e., by entering into an offsetting swap agreement with the same party or a similarly creditworthy party).

Credit Default Swap Agreements . The Fund may enter into credit default swap agreements, which may have as reference obligations one or more securities or a basket of securities that are or are not currently held by the Fund. The protection “buyer” in a credit default contract is generally obligated to pay the protection “seller” an upfront or a periodic stream of payments over the term of the contract provided that no credit event, such as a default, on a reference obligation has occurred. If a credit event occurs, the seller generally must pay the buyer the “par value” (full notional value) of the swap in exchange for an equal face amount of deliverable obligations of the reference entity described in the swap, or the seller may be required to deliver the related net cash amount, if the swap is cash settled. The Fund may be either the buyer or seller in the transaction. If the Fund is a buyer and no credit event occurs, the Fund may recover nothing if the swap is held through its termination date. However, if a credit event occurs, the buyer generally may elect to receive the full notional value of the swap in exchange for an equal face amount of deliverable obligations of the reference entity whose value may have significantly decreased. As a seller, the Fund generally receives an upfront payment or a fixed rate of income throughout the term of the swap provided that there is no credit event. As the seller, the Fund would effectively add leverage to its portfolio because, in addition to its total net assets, the Fund would be subject to investment exposure on the notional amount of the swap.

Credit default swap agreements may involve greater risks than if the Fund had invested in the reference obligation directly since, in addition to risks relating to the reference obligation, credit default swaps are subject to illiquidity risk, counterparty risk and credit risk. The Fund will enter into credit default swap agreements generally with counterparties that meet certain standards of creditworthiness. A buyer generally will lose its investment and recover nothing if no credit event occurs and the swap is held to its termination date. If a credit event were to occur, the value of any deliverable obligation received by the seller, coupled with the upfront or periodic payments previously received, may be less than the full notional value it pays to the buyer, resulting in a loss of value to the seller.

Equity Swaps . The Fund may engage in equity swaps. Equity swaps allow the parties to the swap agreement to exchange components of return on one equity investment (e.g., a basket of equity securities or an index) for a component of return on another non-equity or equity investment, including an exchange of differential rates of return. Equity swaps may be used to invest in a market without owning or taking physical custody of securities in circumstances where direct investment may be restricted for legal reasons or is otherwise impractical. Equity swaps also may be used for other purposes, such as hedging or seeking to increase total return.

The values of equity swaps can be very volatile. To the extent that the Adviser does not accurately analyze and predict the potential relative fluctuation on the components swapped with the other party, the Fund may suffer a loss. The value of some components of an equity swap (such as the dividend on a common stock) may also be sensitive to changes in interest rates. Furthermore, during the period a swap is outstanding, the Fund may suffer a loss if the counterparty defaults.

contract, which may include a specified security, basket of securities or securities indices during the specified period, in return for periodic payments based on a fixed or variable interest rate or the total return from other underlying assets. Total return swap agreements may be used to obtain exposure to a security or market without owning or taking physical custody of such security or investing directly in such market. Total return swap agreements may effectively add leverage to the Fund’s portfolio because, in addition to its total net assets, the Fund would be subject to investment exposure on the notional amount of the swap.

Total return swap agreements are subject to the risk that a counterparty will default on its payment obligations to the Fund thereunder, and conversely, that the Fund will not be able to meet its obligation to the counterparty. Generally, the Fund will enter into total return swaps on a net basis (i.e., the two payment streams are netted against one another with the Fund receiving or paying, as the case may be, only the net amount of the two payments). The net amount of the excess, if any, of the Fund’s obligations over its entitlements with respect to each total return swap will be accrued on a daily basis, and an amount of liquid assets having an aggregate net asset value at least equal to the accrued excess will be segregated by the Fund. If the total return swap transaction is entered into on other than a net basis, the full amount of the Fund’s obligations will be accrued on a daily basis, and the full amount of the Fund’s obligations will be segregated by the Fund in an amount equal to or greater than the market value of the liabilities under the total return swap agreement or the amount it would have cost the Fund initially to make an equivalent direct investment, plus or minus any amount the Fund is obligated to pay or is to receive under the total return swap agreement.

Dollar Rolls

Dollar rolls involve selling securities (e.g., mortgage-backed securities or U.S. Treasury securities) and simultaneously entering into a commitment to purchase those or similar (same collateral type, coupon and maturity) securities on a specified future date and price. Mortgage dollar rolls and U.S. Treasury rolls are types of dollar rolls. The Fund foregoes principal and interest paid on the securities during the “roll” period. The Fund is compensated by the difference between the current sales price and the lower forward price for the future purchase of the securities as well as the interest earned on the cash proceeds of the initial sale.

Dollar rolls involve the risk that the market value of the securities the Fund is obligated to repurchase may decline below the repurchase price or that the transaction costs may exceed the return earned by the Fund from the transaction. Dollar rolls also involve risk to the Fund if the other party should default on its obligation and the Fund is delayed or prevented from completing the transaction. In the event that the buyer of securities under a dollar roll files for bankruptcy or becomes insolvent, the Fund’s use of proceeds of the dollar roll may be restricted pending a determination by the other party, or its trustee or receiver, whether to enforce the Fund’s obligation to repurchase the securities. In addition, the security to be delivered in the future may turn out to be inferior to the security sold upon entering into the transaction.

Foreign Currency Transactions

Foreign currency transactions may be used to protect, to some extent, against uncertainty in the level of future currency exchange rates by establishing a fixed exchange rate. Foreign currency transactions may involve the purchase or sale of foreign currencies on a “spot” (cash) basis at the prevailing exchange rate or may involve “forward contracts” that allow the Fund to purchase or sell foreign currencies at a future date. Forward contracts may be used for “transaction hedging,” “position hedging” and “cross-hedging.” The Fund may use forward sale contracts to sell an amount of a foreign currency approximating the value of the Fund’s securities denominated in the foreign security when that foreign currency suffers a substantial decline against the U.S. dollar. The Fund may use forward purchase contracts to purchase a foreign currency when it is believed that the U.S. dollar may

suffer a substantial decline against the foreign currency. Although these transactions tend to minimize the risk of loss due to a decline in the value of the hedged currency, they also tend to limit any potential gain that might be realized if the value of the hedged currency increases.

Transaction hedging may allow the Fund to “lock in” the U.S. dollar price of a security it has agreed to purchase or sell, or the U.S. dollar equivalent of a dividend or interest rate payment in a foreign currency. The Fund may use transaction hedging to protect itself against a possible loss resulting from an adverse change in the relationship between the U.S. dollar and the applicable foreign currency during the period between the date on which the security is purchased or sold, or on which the dividend or interest payment is declared, and the date on which such payments are made or received.

Position hedging may allow the Fund to protect against an adverse change in the relationship between the U.S. dollar and the applicable foreign currencies in which its portfolio securities are denominated. The Fund may use position hedging when it is believed that the U.S. dollar may suffer a decline against the foreign currency by entering into a forward purchase contract to purchase that foreign currency for a fixed dollar amount.

Cross-hedging may allow the Fund to enter into a forward contract to sell a different foreign currency for a fixed U.S. dollar amount when it is believed that the U.S. dollar value of the currency to be sold pursuant to the forward contract will fall if there is a decline in the U.S. dollar value of the currency in which the Fund’s securities are denominated.

The Fund also may purchase exchange-listed and over-the-counter call and put options on foreign currencies and foreign currency contracts. Options on foreign currencies and foreign currency contracts give the holder a right to buy or sell the underlying foreign currencies or foreign currency contracts for a specified period of time and for a specified amount. The value of an option on foreign currencies or foreign currency contracts reflects the value of an exchange rate, which depends on the relative values of the U.S. dollar and the relevant foreign currency.

Engaging in foreign currency transactions is subject to certain risks. For example, if the value of a foreign currency were to decline against the U.S. dollar, such decline would reduce the dollar value of any securities held by the Fund denominated in that currency. It is impossible to forecast with precision the market value of portfolio securities at the expiration or maturity of a forward or futures contract, which may make it necessary for the Fund to purchase additional foreign currency on the spot market if the market value of the security being hedged is less than the amount of foreign currency the Fund is obligated to deliver at the time the Fund sells the security being hedged. The value of any currency, including the U.S. dollar, may be affected by political and economic factors applicable to the issuer’s country. The exchange rates of currencies also may be affected adversely by governmental actions. Transaction, position and cross-hedging do not eliminate fluctuations in the underlying prices of securities that the Fund owns or intends to purchase or sell and may limit the amount of potential gain that might result from the increase in value of the currency being hedged. Settlement procedures relating to the Fund’s foreign currency transactions may be more complex than those relating to investments in securities of U.S. issuers.

Foreign Securities

Foreign securities include debt, equity and derivative securities that the Adviser determines are “foreign” based on the consideration of an issuer’s domicile, its principal place of business, its primary stock exchange listing, the source of its revenue or other factors. Foreign securities may be structured as fixed-, variable- or floating-rate obligations or as zero-coupon, pay-in-kind and step-coupon securities and may be privately placed or publicly offered. See Permissible Fund Investments — Variable- and Floating-Rate Obligations, Permissible Fund Investments — Zero-Coupon, Pay-in-Kind and Step-Coupon Securities and Permissible Fund Investments — Private Placement and Other Restricted Securities for more information.

Foreign securities may include depositary receipts, such as American Depositary Receipts (ADRs), European Depositary Receipts (EDRs) and Global Depositary Receipts (GDRs). ADRs are U.S. dollar-denominated receipts issued in registered form by a domestic bank or trust company that evidence ownership of underlying securities issued by a foreign issuer. EDRs are foreign currency-denominated receipts issued in Europe, typically by foreign banks or trust companies and foreign branches of domestic banks, that evidence ownership of foreign or domestic securities. GDRs are receipts structured similarly to ADRs and EDRs and are marketed globally. Depositary receipts will not necessarily be denominated in the same currency as their underlying securities. In general, ADRs, in registered form, are designed for use in the U.S. securities markets, and EDRs, in bearer form, are designed for use in European securities markets. GDRs are tradable both in the United States and in Europe and are designed for use throughout the world. The Fund may invest in depositary receipts through “sponsored” or “unsponsored” facilities. A sponsored facility is established jointly by the issuer of the underlying security and a depositary, whereas a depositary may establish an unsponsored facility without participation by the issuer of the deposited security. Holders of unsponsored depositary receipts generally bear all the costs of such facilities and the depositary of an unsponsored facility frequently is under no obligation to distribute interest holder communications received from the issuer of the deposited security or to pass through voting rights to the holders of such receipts in respect of the deposited securities. The issuers of unsponsored depositary receipts are not obligated to disclose material information in the United States, and, therefore, there may be limited information available regarding such issuers and/or limited correlation between available information and the market value of the depositary receipts.

Investing in foreign securities is subject to certain risks. For example, foreign markets can be extremely volatile. Fluctuations in currency exchange rates also may impact the value of foreign securities denominated in foreign currencies or U.S. dollars, without a change in the intrinsic value of those securities. Additionally, the U.S. dollar value of a foreign security tends to decrease when the value of the U.S. dollar rises against the foreign currency in which the security is denominated and tends to increase when the value of the U.S. dollar falls against such currency. The Fund may attempt to minimize the risk from adverse changes in the relationship between the U.S. dollar and foreign currencies by purchasing and selling forward foreign currency exchange contracts and foreign currency futures contracts and related options. Foreign securities may be less liquid than domestic securities so that the Fund may, at times, be unable to sell foreign securities at desirable prices. Brokerage commissions, custodial fees and other fees also are generally higher for foreign securities. The Fund may have limited legal recourse in the event of default with respect to certain debt securities issued by foreign governments. In addition, foreign governments may impose potentially confiscatory withholding or other taxes, which would reduce the Fund’s return on these securities.

Other risks of investing in foreign securities include: possible delays in the settlement of transactions or in the notification of income; generally less publicly available information about companies; adverse impact of political, social or diplomatic events; possible seizure, expropriation or nationalization of a company or its assets; possible imposition of currency exchange controls; and that foreign companies generally are not subject to accounting, auditing and financial reporting standards comparable to those mandated for domestic companies.

rapid development, and may lack the social, political and economic stability of more developed countries. Investing in emerging market securities also involves risks beyond the risks applicable to foreign investments. For example, some emerging market countries may have fixed or managed currencies that are not free-floating against the U.S. dollar. Further, certain currencies may not be traded internationally, and some countries with emerging securities markets have sustained long periods of very high inflation or rapid fluctuation in inflation rates which can have negative effects on a country’s economy and securities markets.

Guaranteed Investment Contracts (Funding Agreements)

Guaranteed investment contracts, or funding agreements, are debt instruments issued by insurance companies. Pursuant to such contracts, the Fund may make cash contributions to a deposit fund of the insurance company’s general account. The insurance company then credits to the Fund payments at negotiated, floating or fixed interest rates. The Fund will purchase guaranteed investment contracts only from issuers that, at the time of purchase, meet certain credit and quality standards.

Investing in guaranteed investment contracts is subject to certain risks. In general, guaranteed investment contracts are not assignable or transferable without the permission of the issuing insurance companies, and an active secondary market does not exist for these investments. In addition, the issuer may not be able to pay the principal amount to the Fund on seven days notice or less, at which time the investment may be considered illiquid under applicable SEC regulatory guidance and subject to certain restrictions.

Illiquid Securities

Illiquid securities are defined by the Fund consistent with SEC staff’s current guidance and interpretations which provide that an illiquid security is an asset which may not be sold or disposed of in the ordinary course of business within seven days at approximately the value at which the Fund has valued the investment on its books. Some securities, such as those not registered under U.S. securities laws, cannot be sold in public transactions. Subject to its investment policies, the Fund may invest in illiquid investments and may invest in certain restricted securities that are deemed to be illiquid securities.

Initial Public Offerings

The Fund may invest in initial public offerings (IPOs) of common stock or other primary or secondary syndicated offerings of equity or debt securities issued by a corporate issuer. A purchase of IPO securities often involves higher transaction costs than those associated with the purchase of securities already traded on exchanges or markets. IPO securities are subject to market risk and liquidity risk. The market value of recently issued IPO securities may fluctuate considerably due to factors such as the absence of a prior public market, unseasoned trading and speculation, a potentially small number of securities available for trading, limited information about the issuer, and other factors. The Fund may hold IPO securities for a period of time, or may sell them soon after the purchase. Investments in IPOs could have a magnified impact – either positive or negative – on the Fund’s performance while the Fund’s assets are relatively small. The impact of an IPO on the Fund’s performance may tend to diminish as the Fund’s assets grow. In circumstances when investments in IPOs make a significant contribution to the Fund’s performance, there can be no assurance that similar contributions from IPOs will continue in the future.

Investments in Other Investment Companies

Investing in other investment companies may be a means by which the Fund seeks to achieve its investment objective. The Fund may invest in securities issued by other investment companies within the limits prescribed by the 1940 Act, the rules and regulations thereunder and any exemptive orders currently or in the future obtained by the Fund from the SEC.

Except with respect to funds structured as funds-of-funds or so-called master/feeder funds, the 1940 Act generally requires that the Fund limit its investments in another investment company or series thereof so that, as determined at the time a securities purchase is made: (i) no more than 5% of the value of its total assets will be invested in the securities of any one investment company; (ii) no more than 10% of the value of its total assets will be invested in the aggregate in securities of other investment companies; and (iii) no more than 3% of the outstanding voting stock of any one investment company or series thereof will be owned by the Fund or by companies controlled by the Fund. Such other investment companies may include ETFs which are shares of publicly traded unit investment trusts, open-end funds or depositary receipts that seek to track the performance of specific indexes or companies in related industries.

Investing in other investment companies is subject to certain risks. Although the Fund may derive certain advantages from being able to invest in shares of other investment companies, such as to be fully invested, there may be potential disadvantages. Investing in other investment companies may result in higher fees and expenses for the Fund and its shareholders. A shareholder may be charged fees not only on Fund shares held directly but also on the investment company shares that the Fund purchases.

Under the 1940 Act and rules and regulations thereunder, the Fund may purchase shares of affiliated funds, subject to certain conditions. Investing in affiliated Funds may present certain actual or potential conflicts of interest. For more information about such actual and potential conflicts of interest, see Investment Advisory and Other Services — Other Roles and Relationships of Ameriprise Financial and its Affiliates — Certain Conflicts of Interest .

Low and Below Investment Grade Securities

Low and below investment grade securities (below investment grade securities are also known as “junk bonds”) are debt securities with the lowest investment grade rating (e.g., BBB by S&P and Fitch or Baa by Moody’s), that are below investment grade (e.g., lower than BBB by S&P and Fitch or Baa by Moody’s) or that are unrated but determined by the Adviser to be of comparable quality. These types of securities may be issued to fund corporate transactions or restructurings, such as leveraged buyouts, mergers, acquisitions, debt reclassifications or similar events, are more speculative in nature than securities with higher ratings and tend to be more sensitive to credit risk, particularly during a downturn in the economy. These types of securities generally are issued by unseasoned companies without long track records of sales and earnings, or by companies or municipalities that have questionable credit strength. Low and below investment grade securities and comparable unrated securities: (i) likely will have some quality and protective characteristics that, in the judgment of one or more NRSROs, are outweighed by large uncertainties or major risk exposures to adverse conditions; (ii) are speculative with respect to the issuer’s capacity to pay interest and repay principal in accordance with the terms of the obligation; and (iii) may have a less liquid secondary market, potentially making it difficult to value or sell such securities. Low and below investment grade securities may be structured as fixed-, variable- or floating-rate obligations or as zero-coupon, pay-in-kind and step-coupon securities and may be privately placed or publicly offered. See Permissible Fund Investments — Variable- and Floating-Rate Obligations, Permissible Fund Investments — Zero-Coupon, Pay-in-Kind and Step-Coupon Securities and Permissible Fund Investments — Private Placement and Other Restricted Securities for more information.

on more highly rated securities, but generally involve greater volatility of price and risk of loss of principal and income, including the possibility of default by or insolvency of the issuers of such securities. Accordingly, the Fund may be more dependent on the Adviser’s credit analysis with respect to these types of securities than is the case for more highly rated securities.

The risk of loss due to default is greater for low and below investment grade and comparable unrated securities than it is for higher rated securities because low and below investment grade securities and comparable unrated securities generally are unsecured and frequently are subordinated to more senior indebtedness. The Fund may incur additional expenses to the extent that it is required to seek recovery upon a default in the payment of principal or interest on its holdings of such securities. The existence of limited markets for lower-rated debt securities may diminish the Fund’s ability to: (i) obtain accurate market quotations for purposes of valuing such securities and calculating portfolio net asset value; and (ii) sell the securities at fair market value either to meet redemption requests or to respond to changes in the economy or in financial markets.

Many lower-rated securities are not registered for offer and sale to the public under the 1933 Act. Investments in these restricted securities may be determined to be liquid (able to be sold within seven days at approximately the price at which they are valued by the Fund) pursuant to policies approved by the Fund’s Trustees. Investments in illiquid securities, including restricted securities that have not been determined to be liquid, may not exceed 15% of the Fund’s net assets. The Fund is not otherwise subject to any limitation on its ability to invest in restricted securities. Restricted securities may be less liquid than other lower-rated securities, potentially making it difficult to value or sell such securities.

Money Market Instruments

Money market instruments are high-quality, short-term debt obligations, which include: (i) bank obligations, including certificates of deposit, time deposits and bankers’ acceptances; (ii) funding agreements; (iii) repurchase agreements; (iv) obligations of the United States, foreign countries and supranational entities, and each of their subdivisions, agencies and instrumentalities; (v) certain corporate debt securities, such as commercial paper, short-term corporate obligations and extendible commercial notes; (vi) participation interests; and (vii) municipal securities. Money market instruments may be structured as fixed-, variable- or floating-rate obligations and may be privately placed or publicly offered. See Permissible Fund Investments — Variable- and Floating-Rate Obligations and Permissible Fund Investments — Private Placement and Other Restricted Securities for more information.

Mortgage-Backed Securities

fees paid to the originator, servicer, or other parties, and fees paid for credit enhancement), so that the payments made on the underlying mortgage collateral effectively pass through to such security holders. Mortgage-backed securities are created when mortgage originators (or mortgage loan sellers who have purchased mortgage loans from mortgage loan originators) sell the underlying mortgages to a special purpose entity in a process called a securitization. The special purpose entity issues securities that are backed by the payments on the underlying mortgage loans, and have a minimum denomination and specific term. Mortgage-backed securities may be structured as fixed-, variable- or floating-rate obligations or as zero-coupon, pay-in-kind and step-coupon securities and may be privately placed or publicly offered. See Permissible Fund Investments — Variable and Floating-Rate Obligations, Permissible Fund Investments — Zero-Coupon, Pay-in-Kind and Step-Coupon Securities and Permissible Fund Investments — Private Placement and Other Restricted Securities for more information.

Mortgage-backed securities may be issued or guaranteed by GNMA (also known as Ginnie Mae), FNMA (also known as Fannie Mae), or FHLMC (also known as Freddie Mac), but also may be issued or guaranteed by other issuers, including private companies. GNMA is a government-owned corporation that is an agency of the U.S. Department of Housing and Urban Development. It guarantees, with the full faith and credit of the United States, full and timely payment of all monthly principal and interest on its mortgage-backed securities. Until recently, FNMA and FHLMC were government-sponsored corporations owned entirely by private stockholders. Both issue mortgage-related securities that contain guarantees as to timely payment of interest and principal but that are not backed by the full faith and credit of the U.S. Government. The value of the companies’ securities fell sharply in 2008 due to concerns that the firms did not have sufficient capital to offset losses. In mid-2008, the U.S. Treasury was authorized to increase the size of home loans that FNMA and FHLMC could purchase in certain residential areas and, until 2009, to lend FNMA and FHLMC emergency funds and to purchase the companies’ stock. More recently, in September 2008, the U.S. Treasury announced that FNMA and FHLMC had been placed in conservatorship by the Federal Housing Finance Agency (FHFA), a newly created independent regulator. In addition to placing the companies in conservatorship, the U.S. Treasury announced three additional steps that it intended to take with respect to FNMA and FHLMC. First, the U.S. Treasury has entered into “Preferred Stock Purchase Agreements” (PSPAs) under which, if the FHFA determines that FNMA’s or FHLMC’s liabilities have exceeded its assets under generally accepted accounting principles, the U.S. Treasury will contribute cash capital to the company in an amount equal to the difference between liabilities and assets. The PSPAs are designed to provide protection to the senior and subordinated debt and the mortgage-backed securities issued by FNMA and FHLMC. Second, the U.S. Treasury established a new secured lending credit facility that is available to FNMA and FHLMC until December 2009. Third, the U.S. Treasury initiated a temporary program to purchase FNMA and FHLMC mortgage-backed securities, which is expected to continue until December 2009. No assurance can be given that the U.S. Treasury initiatives discussed above with respect to the debt and mortgage-backed securities issued by FNMA and FHLMC will be successful.

than expected, which may affect the security’s average maturity and rate of return. Whether or not a mortgage loan is prepaid is almost entirely controlled by the borrower. Borrowers are most likely to exercise prepayment options at the time when it is least advantageous to investors, generally prepaying mortgages as interest rates fall, and slowing payments as interest rates rise. Besides the effect of prevailing interest rates, the rate of prepayment and refinancing of mortgages also may be affected by home value appreciation, ease of the refinancing process and local economic conditions, among other factors. Market risk reflects the risk that the price of a security may fluctuate over time. The price of mortgage-backed securities can be particularly sensitive to prevailing interest rates, the length of time the security is expected to be outstanding and the liquidity of the issue. In a period of unstable interest rates, there may be decreased demand for certain types of mortgage-backed securities, which in turn may decrease their value. Credit risk reflects the risk that a holder of mortgage-backed securities may not receive all or part of its principal because the issuer, any credit enhancer and/or the underlying mortgage borrower has defaulted on its obligations. Credit risk is increased for mortgage-backed securities that are backed by mortgages to so-called subprime borrowers (who may pose a greater risk of defaulting on their loans) or that are subordinated to another security (i.e., if the holder of a mortgage-backed security is entitled to receive payments only after payment obligations to holders of the other security are satisfied). The more deeply subordinated the security, the greater the credit risk associated with the security will be. Mortgage-backed securities issued by private issuers, whether or not such obligations are subject to guarantees by the private issuer, may entail greater risk than mortgage-backed securities guaranteed by the U.S. Government. The performance of mortgage-backed securities issued by private issuers generally depends on the financial health of those institutions.

Municipal Securities

Municipal securities include debt obligations issued by governmental entities to obtain funds for various public purposes, including the construction of a wide range of public facilities, the refunding of outstanding obligations, the payment of general operating expenses, and the extension of loans to public institutions and facilities. Municipal securities can be classified into two principal categories, including “general obligation” bonds and other securities and “revenue” bonds and other securities. General obligation bonds are secured by the issuer’s full faith, credit and taxing power for the payment of principal and interest. Revenue securities are payable only from the revenues derived from a particular facility or class of facilities or, in some cases, from the proceeds of a special excise tax or other specific revenue source, such as the user of the facility being financed. Municipal securities also may include “moral obligation” securities, which normally are issued by special purpose public authorities. If the issuer of moral obligation securities is unable to meet its debt service obligations from current revenues, it may draw on a reserve fund, the restoration of which is a moral commitment but not a legal obligation of the governmental entity that created the special purpose public authority. Municipal securities may be structured as fixed-, variable- or floating-rate obligations or as zero-coupon, pay-in-kind and step-coupon securities and may be privately placed or publicly offered. See Permissible Fund Investments—Variable- and Floating-Rate Obligations, Permissible Fund Investments—Zero Coupon, Pay-in-kind and Step-Coupon Securities and Permissible Fund Investments—Private Placement and Other Restricted Securities for more information.

governmental entity or agency. While these obligations are intended to be paid from general revenues or refinanced with long-term debt, they frequently are backed by letters of credit, lending agreements, note repurchase agreements or other credit facility agreements offered by banks or institutions.

Municipal demand obligations can be subdivided into two general types: variable rate demand notes and master demand obligations. Variable rate demand notes are tax-exempt municipal obligations or participation interests that provide for a periodic adjustment in the interest rate paid on the notes. They permit the holder to demand payment of the notes, or to demand purchase of the notes at a purchase price equal to the unpaid principal balance, plus accrued interest either directly by the issuer or by drawing on a bank letter of credit or guaranty issued with respect to such note. The issuer of the municipal obligation may have a corresponding right to prepay at its discretion the outstanding principal of the note plus accrued interest upon notice comparable to that required for the holder to demand payment. The variable rate demand notes in which the Fund may invest are payable, or are subject to purchase, on demand usually on notice of seven calendar days or less. The terms of the notes generally provide that interest rates are adjustable at intervals ranging from daily to six months.

Master demand obligations are tax-exempt municipal obligations that provide for a periodic adjustment in the interest rate paid and permit daily changes in the amount borrowed. The interest on such obligations is, in the opinion of counsel for the borrower, excluded from gross income for federal income tax purposes (but not necessarily for alternative minimum tax purposes). Although there is no secondary market for master demand obligations, such obligations are considered by the Fund to be liquid because they are payable upon demand.

Municipal lease obligations are participations in privately arranged loans to state or local government borrowers. In general, such loans are unrated, in which case they will be determined by the Adviser to be of comparable quality at the time of purchase to rated instruments that may be acquired by the Fund. Frequently, privately arranged loans have variable interest rates and may be backed by a bank letter of credit. In other cases, they may be unsecured or may be secured by assets not easily liquidated. Moreover, such loans in most cases are not backed by the taxing authority of the issuers and may have limited marketability or may be marketable only by virtue of a provision requiring repayment following demand by the lender.

Although lease obligations do not constitute general obligations of the municipal issuer to which the government’s taxing power is pledged, a lease obligation ordinarily is backed by the government’s covenant to budget for, appropriate, and make the payments due under the lease obligation. However, certain lease obligations contain “non-appropriation” clauses that provide that the government has no obligation to make lease or installment purchase payments in future years unless money is appropriated for such purpose on a periodic basis. In the case of a “non-appropriation” lease, the Fund’s ability to recover under the lease in the event of non-appropriation or default likely will be limited to the repossession of the leased property in the event that foreclosure proves difficult.

The payment of principal and interest on most municipal securities purchased by the Fund will depend upon the ability of the issuers to meet their obligations. An issuer’s obligations under its municipal securities are subject to the provisions of bankruptcy, insolvency, and other laws affecting the rights and remedies of creditors, such as the United States Bankruptcy Code. The power or ability of an issuer to meet its obligations for the payment of interest on and principal of its municipal securities may be materially adversely affected by litigation or other conditions.

There are particular considerations and risks relevant to investing in a portfolio of a single state’s municipal securities, such as the greater risk of the concentration of portfolio holdings.

The Fund ordinarily purchases municipal securities whose interest, in the opinion of bond counsel, is excluded from gross income for federal income tax purposes. The opinion of bond counsel may assert that such interest is not an item of tax preference for the purposes of the alternative minimum tax or is exempt from certain state or local taxes. There is no assurance that the applicable taxing authorities will agree with this opinion. In the event, for example, that the IRS determines that an issuer does not comply with the relevant tax requirements, interest payments from a security could become federally taxable, possibly retroactively to the date the security was issued. As a shareholder of the Fund, you may be required to file an amended tax return as a result, reporting such income as taxable.

Participation Interests

Participation interests (also called pass-through certificates or securities) represent an interest in a pool of debt obligations, such as municipal bonds or notes, that have been “packaged” by an intermediary, such as a bank or broker/dealer. Participation interests typically are issued by partnerships or trusts through which the Fund receives principal and interest payments that are passed through to the holder of the participation interest from the payments made on the underlying debt obligations. The purchaser of a participation interest receives an undivided interest in the underlying debt obligations. The issuers of the underlying debt obligations make interest and principal payments to the intermediary, as an initial purchaser, which are passed through to purchasers in the secondary market, such as the Fund. Mortgage-backed securities are a common type of participation interest. Participation interests may be structured as fixed-, variable- or floating-rate obligations or as zero-coupon, pay in-kind and step-coupon securities and may be privately placed or publicly offered. See Permissible Fund Investments — Variable- and Floating-Rate Obligations, Permissible Fund Investments — Zero-Coupon, Pay-in-Kind and Step-Coupon Securities and Permissible Fund Investments — Private Placement and Other Restricted Securities for more information.

Investing in participation interests is subject to certain risks. Participation interests generally are subject to the credit risk associated with the underlying borrowers. If the underlying borrower defaults, the Fund may be subject to delays, expenses and risks that are greater than those that would have been involved if the Fund had purchased a direct obligation of the borrower. The Fund also may be deemed a creditor of the lending bank or syndicate members and be subject to the risk that the lending bank or syndicate members may become insolvent.

Preferred Stock

its holders to share in profits above and beyond the declared dividend, along with common shareholders, as distinguished from nonparticipating preferred stock, which is limited to the stipulated dividend. Convertible preferred stock is exchangeable for a given number of shares of common stock and thus tends to be more volatile than nonconvertible preferred stock, which generally behaves more like a fixed income bond. Preferred stock may be privately placed or publicly offered. See Permissible Fund Investments — Private Placement and Other Restricted Securities for more information.

In addition to reinvestment risk if interest rates fall, some specific risks with regard to APS include:

•

Early call risk: APS generally is redeemable at any time, usually upon notice, at the issuer’s option, at par plus accrued dividends.

Investing in preferred stock also may involve the risks applicable to investing in a particular industry, such as technology, financial services, consumer goods or natural resources (e.g. , oil and gas). To some extent, the prices of stocks tend to move by industry sector. When market conditions favorably affect, or are expected to favorably affect, an industry, the prices of the stocks of companies in that industry tend to rise. Conversely, negative news or a poor outlook for a particular industry can cause the value of those companies’ stock to decline.

Private Placement and Other Restricted Securities

common stock, convertible securities, corporate debt securities, foreign securities, low and below investment grade securities, money market instruments, mortgage-backed securities, participation interests, preferred stock and other types of equity and debt instruments may be privately placed or restricted securities.

Investing in private placement and other restricted securities is subject to certain risks. Private placements may be considered illiquid securities. Private placements typically are subject to restrictions on resale as a matter of contract or under federal securities laws. Because there may be relatively few potential purchasers for such securities, especially under adverse market or economic conditions or in the event of adverse changes in the financial condition of the issuer, the Fund could find it more difficult to sell such securities when it may be advisable to do so or it may be able to sell such securities only at prices lower than if such securities were more widely held. At times, it also may be more difficult to determine the fair value of such securities for purposes of computing the Fund’s net asset value due to the absence of a trading market.

Real Estate Investment Trusts and Master Limited Partnerships

Repurchase Agreements

Repurchase agreements are agreements under which the Fund acquires a security for a relatively short period of time subject to the obligation of a seller to repurchase and the Fund to resell such security at a fixed

time and price (representing the Fund’s cost plus interest). Repurchase agreements also may be viewed as loans made by the Fund that are collateralized by the securities subject to repurchase. The Fund typically will enter into repurchase agreements only with commercial banks, registered broker/dealers and the Fixed Income Clearing Corporation. Such transactions are monitored to ensure that the value of the underlying securities will be at least equal at all times to the total amount of the repurchase obligation, including any accrued interest. Repurchase agreements generally are subject to counterparty risk.

If a counterparty defaults, the Fund could realize a loss on the sale of the underlying security to the extent that the proceeds of the sale are less than the resale price provided in the repurchase agreement including interest. In the event that a counterparty fails to perform because it is insolvent or otherwise subject to insolvency proceedings against it, the Fund’s right to take possession of the underlying securities would be subject to applicable insolvency law and procedure, including an automatic stay (which would preclude immediate enforcement of the Fund’s rights) and exemptions thereto (which would permit the Fund to take possession of the underlying securities or to void a repurchase agreement altogether). Since it is possible that an exemption from the automatic stay would not be available, the Fund might be prevented from immediately enforcing its rights against the counterparty. Accordingly, if a counterparty becomes insolvent or otherwise subject to insolvency proceedings against it, the Fund may incur delays in or be prevented from liquidating the underlying securities and could experience losses, including the possible decline in value of the underlying securities during the period in which the Fund seeks to enforce its rights thereto, possible subnormal levels of income or lack of access to income during such time, as well as the costs incurred in enforcing the Fund’s rights. For example, if the Fund enters into a repurchase agreement with a broker that becomes insolvent, it is possible for the Securities Investor Protection Corporation (SIPC) to institute a liquidation proceeding in federal court against the broker counterparty which could lead to a foreclosure by SIPC of the underlying securities or SIPC may stay, or preclude, the Fund’s ability under contract to terminate the repurchase agreement.

Reverse Repurchase Agreements

Reverse repurchase agreements are agreements under which the Fund sells a security subject to the obligation of a buyer to resell and the Fund to repurchase such security at a fixed time and price. Reverse repurchase agreements also may be viewed as borrowings made by the Fund.

Reverse repurchase agreements involve the risk that the market value of the securities the Fund is obligated to repurchase under the agreement may decline below the repurchase price. In the event the buyer of securities under a reverse repurchase agreement files for bankruptcy or becomes insolvent, the Fund’s use of proceeds of the agreement may be restricted pending a determination by the other party, or its trustee or receiver, whether to enforce the Fund’s obligation to repurchase the securities. In addition, reverse repurchase agreements are techniques involving leverage, and are subject to asset coverage requirements. Under the requirements of the 1940 Act, the Fund is required to maintain an asset coverage (including the proceeds of the borrowings) of at least 300% of all borrowings.

Stripped Securities

Stripped securities are securities that evidence ownership in either the future interest or principal payments on an instrument. There are many different types and variations of stripped securities. For example, Separate Trading of Registered Interest and Principal Securities (STRIPs) can be component parts of a U.S. Treasury security where the principal and interest components are traded independently through DTC, a clearing agency registered pursuant to Section 17A of the 1934 Act and created to hold securities for its participants, and to facilitate the clearance and settlement of securities transactions between participants through electronic computerized book-entries, thereby eliminating the need for physical movement of certificates. Treasury Investor Growth Receipts (TIGERs) are U.S. Treasury securities stripped by brokers. Stripped mortgage-backed securities, or SMBS, also can be issued by the U.S. Government or its agencies. Stripped securities may be structured as fixed-, variable- or floating-rate obligations. See Permissible Fund Investments — Variable- and Floating-Rate Obligations for more information.

Investing in stripped securities is subject to certain risks. If the underlying obligations experience greater than anticipated prepayments of principal, the Fund may fail fully to recoup its initial investment in such securities. The market value of the class consisting primarily or entirely of principal payments can be especially volatile in response to changes in interest rates. The rates of return on a class of SMBS that receives all or most of the interest are generally higher than prevailing market rates of return on other mortgage-backed obligations because their cash flow patterns also are volatile and there is a greater risk that the initial investment will not be recouped fully.

U.S. Government and Related Obligations

U.S. Government obligations include U.S. Treasury obligations and securities issued or guaranteed by various agencies of the U.S. Government or by various instrumentalities which have been established or sponsored by the U.S. Government. U.S. Treasury obligations and securities issued or guaranteed by various agencies of the U.S. Government differ in their interest rates, maturities and time of issuance, as well as with respect to whether they are guaranteed by the U.S. Government. U.S. Government and related obligations may be structured as fixed-, variable- or floating-rate obligations. See Permissible Fund Investments — Variable and Floating-Rate Obligations for more information.

Variable- and Floating-Rate Obligations

Variable- and floating-rate obligations provide for periodic adjustments in the interest rate and, under certain circumstances, varying principal amounts. Unlike a fixed interest rate, a variable, or floating, rate is one that rises and declines based on the movement of an underlying index of interest rates and may pay interest at rates that are adjusted periodically according to a specified formula. Asset-backed securities, bank obligations, convertible securities, corporate debt securities, foreign securities, low and below investment grade securities, money market instruments, mortgage-backed securities, participation interests, stripped securities, U.S. Government and related obligations and other types of debt instruments may be structured as variable- and floating-rate obligations.

Investing in variable- and floating-rate obligations is subject to certain risks. Variable- and floating-rate obligations may involve direct lending arrangements between the purchaser and the issuer and there may be no active secondary market, making it difficult to resell such obligations to a third party. Variable- and floating-rate obligations also may be subject to interest rate and credit risks. Changes in interest rates can affect the rate of return on such obligations. If an issuer of a variable- or floating rate obligation defaults, the Fund could sustain a loss to the extent of such default.

Warrants and Rights

When-Issued, Delayed Delivery and Forward Commitment Transactions

When-issued, delayed delivery and forward commitment transactions involve the purchase or sale of securities by the Fund, with payment and delivery taking place in the future. When engaging in when-issued, delayed delivery and forward commitment transactions, the Fund typically will hold cash or liquid securities in a segregated account in an amount equal to or greater than the purchase price. The payment obligation and, if applicable, the interest rate that will be received on the securities, are fixed at the time that the Fund agrees to purchase the securities. The Fund generally will enter into when-issued, delayed delivery and forward commitment transactions only with the intention of completing such transactions. However, the Adviser may determine not to complete a transaction if it deems it appropriate. In such cases, the Fund may realize short-term gains or losses.

When-issued, delayed delivery and forward commitment transactions involve the risks that the securities purchased may fall in value by the time they actually are issued or that the other party may fail to honor the contract terms. The Fund that invests in delayed delivery securities may rely on a third party to complete the transaction. Failure by a third party to deliver a security purchased on a delayed delivery basis may result in a financial loss to the Fund or the loss of an opportunity to make an alternative investment.

Zero-Coupon, Pay-in-Kind and Step-Coupon Securities

corporate debt securities, foreign securities, low and below investment grade securities, mortgage-backed securities, municipal securities, participation interests, stripped securities, U.S. Government and related obligations and other types of debt instruments may be structured as zero-coupon, pay-in-kind and step-coupon securities.

Borrowings

The Fund has a fundamental policy with respect to borrowing that can be found under the heading About the Fund’s Investments — Fundamental and Non-Fundamental Investment Policies . Specifically, the Fund may not borrow money or issue senior securities except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any exemptive relief obtained by the Fund. In general, pursuant to the 1940 Act, the Fund may borrow money only from banks in an amount not exceeding 33 ¹ / 3 % of its total assets (including the amount borrowed) less liabilities (other than borrowings). Any borrowings that come to exceed this amount must be reduced within three days (not including Sundays and holidays) to the extent necessary to comply with the 33 ¹ / 3 % limitation.

The Fund participates in a committed line of credit (Line of Credit). Any advance under the Line of Credit is contemplated primarily for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely sale of portfolio securities.

Pursuant to an exemptive order from the SEC, the Fund may, subject to certain conditions, borrow money from or lend money to other funds in the Columbia Funds Family or any other registered investment company advised by the Adviser or its affiliates, for temporary emergency purposes in order to facilitate redemption requests, or for other purposes consistent with Fund investment policies and restrictions. All loans are set at an interest rate between the rates charged on overnight repurchase agreements and short-term bank loans.

Short Sales

The Fund may sometimes sell securities short when it owns an equal amount of such securities as those securities sold short. This is a technique known as selling short “against the box.” If the Fund makes a short sale “against the box,” it would not immediately deliver the securities sold and would not receive the proceeds from the sale. The seller is said to have a short position in the securities sold until it delivers the securities sold, at which time it receives the proceeds of the sale. To secure its obligation to deliver securities sold short, the Fund will deposit in escrow in a separate account with the custodian an equal amount of the securities sold short or securities convertible into or exchangeable for such securities. The Fund can close out its short position by purchasing and delivering an equal amount of the securities sold short, rather than by delivering securities already held by the Fund, because the Fund might want to continue to receive interest and dividend payments on securities in its portfolio that are convertible into the securities sold short.

Short sales “against the box” entail many of the same risks and considerations described above regarding short sales not “against the box.” However, when the Fund sells short “against the box” it typically limits the amount of securities that it has leveraged. The Fund’s decision to make a short sale “against the box” may be a technique to hedge against market risks when the Adviser believes that the price of a security may decline, causing a decline in the value of a security owned by the Fund or a security convertible into or exchangeable for such security. In such case, any future losses in the Fund’s long position would be reduced by a gain in the short position. The extent to which such gains or losses in the long position are reduced will depend upon the amount of securities sold short relative to the amount of the securities the Fund owns, either directly or indirectly, and, in the case where the Fund owns convertible securities, changes in the investment values or conversion premiums of such securities. Short sales may have adverse tax consequences to the Fund and its shareholders.

Subject to its fundamental and non-fundamental investment policies, the Fund may engage in short sales that are not “against the box,” which are sales by the Fund of securities or commodity futures contracts that it does not own in hopes of purchasing the same security at a later date at a lower price. The technique is also used to protect a profit in a long-term position in a security or commodity futures contract. To make delivery to the buyer, the Fund must borrow or purchase the security. If borrowed, the Fund is then obligated to replace the security borrowed from the third party, so the Fund must purchase the security at the market price at a later time. If the price of the security has increased during this time, then the Fund will incur a loss equal to the increase in price of the security from the time of the short sale plus any premiums and interest paid to the third party. (Until the security is replaced, the Fund is required to pay to the lender amounts equal to any dividends or interest which accrue during the period of the loan. To borrow the security, the Fund also may be required to pay a premium, which would increase the cost of the security sold. The proceeds of the short sale will be retained by the broker, to the extent necessary to meet the margin requirements, until the short position is closed out.)

Short sales by the Fund that are not made “against the box” create opportunities to increase the Fund’s return but, at the same time, involve specific risk considerations and may be considered a speculative technique. Because the Fund in effect profits from a decline in the price of the securities sold short without the need to invest the full purchase price of the securities on the date of the short sale, the Fund’s NAV per share tends to increase more when the securities it has sold short decrease in value, and to decrease more when the securities it

has sold short increase in value, than if it had not engaged in such short sales. The amount of any gain will be decreased, and the amount of any loss increased, by the amount of any premium, dividends or interest the Fund may be required to pay in connection with the short sale. Short sales could potentially involve unlimited loss, as the market price of securities sold short may continually increase, although the Fund can mitigate any such losses by replacing the securities sold short. Under adverse market conditions, the Fund might have difficulty purchasing securities to meet its short sale delivery obligations, and might have to sell portfolio securities to raise the capital necessary to meet its short sale obligations at a time when fundamental investment considerations would not favor such sales. There is also the risk that the third party to the short sale may fail to honor its contract terms, causing a loss to the Fund.

The Fund’s successful use of short sales also will be subject to the ability of the Adviser to predict movements in the directions of the relevant market. The Fund therefore bears the risk that the Adviser will incorrectly predict future price directions. In addition, if the Fund sells a security short, and that security’s price goes up, the Fund will have to make up the margin on its open position (i.e., purchase more securities on the market to cover the position). It may be unable to do so and thus its position may not be closed out. There can be no assurance that the Fund will not incur significant losses in such a case.

In the view of the SEC, a short sale involves the creation of a “senior security” as such term is defined in the 1940 Act, unless the sale is “against the box” and the securities sold short are placed in a segregated account (not with the broker), or unless the Fund’s obligation to deliver the securities sold short is “covered” by placing in a segregated account (not with the broker) cash, U.S. Government securities or other liquid debt or equity securities in an amount equal to the difference between the market value of the securities sold short at the time of the short sale and any such collateral required to be deposited with a broker in connection with the sale (not including the proceeds from the short sale), which difference is adjusted daily for changes in the value of the securities sold short. The total value of the cash, U.S. Government securities or other liquid debt or equity securities deposited with the broker and otherwise segregated may not at any time be less than the market value of the securities sold short at the time of the short sale.

Lending Securities

Securities lending refers to the lending of the Fund’s portfolio securities. Subject to its investment policies described above and in the prospectuses, the Fund may make secured loans of its portfolio securities to broker/ dealers and other institutional investors. Securities loans by the Fund are made pursuant to agreements that require that loans be secured continuously by collateral in cash. The Fund retains all or a portion of the income received on investment of cash collateral. A borrower will pay to the Fund an amount equal to any dividends or interest received on securities loaned, but the borrower typically will receive a portion of the income earned on investments of cash collateral. Although voting rights, or rights to consent, with respect to loaned securities pass to a borrower, the Fund retains the right to call the loans at any time on reasonable notice, and may do so in order to vote upon matters affecting, or to sell, the loaned securities.

The Fund typically invests the cash collateral it receives in connection with its securities lending program directly or indirectly in high quality, short-term investments. The Fund may invest some or all of such cash collateral in one or more pooled investment vehicles, including, among other vehicles, money market funds managed by the Fund’s securities lending agent or its affiliates. The securities lending agent shares in any income resulting from the investment of such cash collateral, and an affiliate of the securities lending agent receives asset-based fees for the management of such pooled investment vehicles, which may create a conflict of interest between the securities lending agent (or its affiliate) and the Fund with respect to the management of such cash collateral.

Portfolio Turnover

A change in the securities held by the Fund is known as “portfolio turnover.” High portfolio turnover ( e.g. , over 100%) involves correspondingly greater expenses to the Fund, including brokerage commissions or dealer mark-ups and other transaction costs on the sale of securities and reinvestments in other securities. Such sales may also result in adverse tax consequences to the Fund’s shareholders. The trading costs and tax effects associated with portfolio turnover may adversely affect the Fund’s performance.

For the Fund’s portfolio turnover rate, see the Fees and Expenses of the Fund – Portfolio Turnover section in the prospectuses for that Fund.

Disclosure of Portfolio Information

Public Disclosures

•

For equity, convertible, balanced and asset allocation Columbia Funds, other than small cap and specialty Columbia Funds a complete list of portfolio holdings as of a month-end is posted approximately 15 calendar days after such month-end.

•

For small cap and specialty Columbia Funds and those Columbia Funds that are sub-advised by Marsico and Brandes, subadvisers to certain Columbia Funds, a complete list of portfolio holdings as of a month end is posted approximately 30 calendar days after such month-end.

•

For fixed-income funds, a complete list of portfolio holdings as of a calendar quarter-end is posted approximately 30 calendar days after such quarter-end.

•

For Columbia Funds that are money market funds, a complete list of portfolio holdings as of a month-end is posted approximately 5 business days after such month-end.

The Adviser may also disclose more current portfolio holdings information as of specified dates on the Columbia Funds’ website.

The Columbia Funds, the Adviser and their affiliates may include portfolio holdings information that already has been made public through a website posting or SEC filing in marketing literature and other communications to shareholders, advisors or other parties, provided that the information is disclosed no earlier than the business day after the date the information is disclosed publicly on the Columbia Funds’ website or no earlier than the time a Columbia Fund files such information in a publicly available SEC filing required to include such information.

Other Disclosures

In addition, the Columbia Funds periodically disclose their portfolio information on a confidential basis to various service providers that require such information to assist the Columbia Funds with their day-to-day business affairs. In addition to the Adviser and its affiliates, these service providers include each Columbia Fund’s subadviser(s) (if any), the Columbia Funds’ custodian, sub-custodians, independent registered public accounting firm, legal counsel, financial printers, proxy solicitor and proxy voting service provider, as well as ratings agencies that maintain ratings on certain Columbia Funds. These service providers are required to keep such information confidential, and are prohibited from trading based on the information or otherwise using the information except as necessary in providing services to the Columbia Funds. The Columbia Funds also may disclose portfolio holdings information to broker/dealers and certain other entities in connection with potential transactions and management of the Columbia Funds, provided that reasonable precautions, including limitations on the scope of the portfolio holdings information disclosed, are taken to avoid any potential misuse of the disclosed information.

information disclosed to such recipients is current as of the time of its disclosure, is disclosed to each recipient solely for purposes consistent with the services described below and has been authorized by the Columbia Funds’ President. These special arrangements are described in the table below.

Ongoing Portfolio Holdings Disclosure Arrangements


IDENTITY OF RECIPIENT	COMPENSATION/ CONSIDERATION RECEIVED	CONDITIONS/RESTRICTIONS ON USE OF INFORMATION	FREQUENCY OF DISCLOSURE

Standard & Poor’s	None	Use to maintain ratings for certain money market funds.	Weekly

InvestorTools, Inc.	None	Access granted solely for the purpose of testing back office conversion of trading systems.	Real time

ING Insurance Company	None	Access granted for specific Columbia Funds for ING’s creation of client/shareholder materials. ING may not distribute materials until the holdings information is made public.	Quarterly

Glass-Lewis & Co.	None	Access in connection with testing the firm’s proxy services.	Daily

CMS Bondedge	None	Access when assisting in resolving technical difficulties with application used by the Adviser’s Fixed Income Portfolio Management team as an analytical and trading tool.	Ad hoc

Linedata Services, Inc.	None	Access when assisting in resolving technical difficulties with the software for the LongView Trade Order Management System.	Ad hoc

JP Morgan	None	Access to provide the Adviser’s High Yield portfolio management team with peer group analysis reports for purposes of analyzing the portfolio.	Monthly

Malaspina Communications	None	Use to facilitate writing, publishing and mailing Columbia Fund shareholder reports and communications including shareholder letters and management’s discussion of Columbia Fund performance.	Quarterly

Evare LLP	None	Use for standardizing and reformatting data according to the Adviser’s specifications for use in the reconciliation process.	Daily


IDENTITY OF RECIPIENT	COMPENSATION/ CONSIDERATION RECEIVED	CONDITIONS/RESTRICTIONS ON USE OF INFORMATION	FREQUENCY OF DISCLOSURE

FactSet Research Systems, Inc.	None	Use for provision of quantitative analytics, charting and fundamental data to the Adviser and Marsico, subadviser to certain Columbia Funds.	Daily

RR Donnelley/WE Andrews	None	Access as printers for the Columbia Funds’ prospectuses, supplements, SAIs, fact sheets and brochures.	Monthly

Merrill Corporation	None	Use to provide fulfillment of the Columbia Funds’ prospectuses, supplements, SAIs and sales materials.	Monthly

Citigroup	None	Access when assisting in resolving technical difficulties with Yield Book, an analytic software program that the Adviser uses to perform ongoing risk analysis and management of certain fixed income Columbia Funds and fixed income separately managed accounts.	Daily

Institutional Shareholder Services (ISS)	None	Proxy voting administration and research on proxy matters utilized by MacKay Shields LLC, subadviser to certain Columbia Funds.	Daily

Cogent Consulting LLC	None	Utilized by Marsico, subadviser for certain Columbia Funds, to facilitate the evaluation of commission rates and to provide flexible commission reporting.	Daily

Moody’s	None	Ongoing portfolio surveillance for ratings it maintains on certain money market funds.	Monthly

Kynex	None	Use to provide portfolio attribution reports.	Daily

Bowne & Co.	None	Use for printing of the following materials: prospectuses, supplements and SAIs.	Monthly/quarterly

Bloomberg	None	Use for portfolio analytics.	Daily

Barclays Point	None	Use for analytics including risk and attribution assessment.	Daily

Broadridge Financial Solutions, Inc.	None	Proxy voting and research utilized by Marsico, subadviser to certain Columbia Funds.	Daily


IDENTITY OF RECIPIENT	COMPENSATION/ CONSIDERATION RECEIVED	CONDITIONS/RESTRICTIONS ON USE OF INFORMATION	FREQUENCY OF DISCLOSURE

Investment Technology Group, Inc. (ITG, formerly known as Macgregor)	None	Order management system utilized by Marsico, subadviser to certain Columbia Funds that stores trading data and is used for trading and compliance purposes.	Ad hoc

Advent/AXP	None	Portfolio accounting system utilized by Marsico, subadviser to certain Columbia Funds, for both portfolio accounting and internal recordkeeping purposes.	Ad hoc

Investment Technology Group, Inc. (ITG, formerly known as Plexus Group)	None	Evaluation and assessment of trading activity, execution and practices by the Adviser.	Five days after quarter-end

BANA and State Street	None	Credit analysis performed by lenders.	Ad hoc

State Street	None	Use to provide custodian services.	Real time

Lipper	None	Use to create metrics for board and executive management reporting, product and marketing analysis, and fund performance.	Daily

Morningstar, Inc.	None	Use for independent research and ranking of Columbia Funds.	Daily

INVESTMENT ADVISORY AND OTHER SERVICES

The Adviser and Investment Advisory Services

Columbia Management Investment Advisers, LLC (formerly, RiverSource Investments, LLC) (the Adviser) is the investment adviser and administrator of the Fund. The Adviser is a wholly-owned subsidiary of Ameriprise Financial. Ameriprise Financial is located at 1099 Ameriprise Financial Center, Minneapolis, MN 55474. The Adviser is located at 100 Federal Street, Boston, MA 02110. Prior to May 1, 2010, Columbia Management Advisors, LLC (the Previous Adviser), a wholly-owned subsidiary of Bank of America, was the Fund’s investment adviser.

Services Provided

Under the Investment Management Services Agreement, the Adviser has contracted to furnish the Fund with investment research and advice. For these services, the Fund pays a monthly fee to the Adviser based on the average of the daily closing value of the total net assets of the Fund for such month. Under the Investment Management Services Agreement, any liability of the Adviser to the Trust, the Fund and/or its shareholders is limited to situations involving the Adviser’s own willful misfeasance, bad faith, negligence or reckless disregard of its duties.

The Investment Management Services Agreement may be terminated with respect to the Fund at any time on 60 days’ written notice by the Adviser or by the Trustees of the Trust or by a vote of a majority of the outstanding voting securities of the Fund. The Investment Management Services Agreement will automatically terminate upon any assignment thereof and shall continue in effect for two years from May 1, 2010 and thereafter shall continue from year to year only so long as such continuance is approved at least annually (i) by the Trustees of the Trust or by a vote of a majority of the outstanding voting securities of the Fund and (ii) by vote of a majority of the Trustees who are not interested persons (as such term is defined in the 1940 Act) of the Adviser or the Trust, cast in person at a meeting called for the purpose of voting on such approval.

The Adviser pays all compensation of the Trustees and officers of the Trust who are employees of the Adviser, except for the Chief Compliance Officer, a portion of whose salary is paid by the Columbia Funds. Except to the extent expressly assumed by the Adviser and except to the extent required by law to be paid or reimbursed by the Adviser, the Adviser does not have a duty to pay any Fund operating expense incurred in the organization and operation of the Fund, including, but not limited to, auditing, legal, custodial, investor servicing and shareholder reporting expenses. The Trust pays the cost of printing and mailing Fund prospectuses to shareholders. The Adviser, at its own expense, provides office space, facilities and supplies, equipment and personnel for the performance of its functions under the Fund’s Investment Management Services Agreement.

Advisory Fee Rates and Fees Paid

The Fund pays the Adviser an annual fee for its investment advisory services, as set forth in the Investment Management Services Agreement, and as shown in the section entitled Fees and Expenses of the Fund — Annual Fund Operating Expenses in the Fund’s prospectuses. The fee is calculated as a percentage of the average daily net assets of the Fund and is paid monthly. The Adviser also may pay amounts from its own assets to the Distributor and/or to selling and/or servicing agents for services they provide.

The Adviser receives a monthly investment advisory fee at the annual rate of 0.30% on the Fund’s average daily net assets.

The Previous Adviser received fees from the Fund for its services as reflected in the following chart, which shows the advisory fees paid to the Previous Adviser and the advisory fees waived/reimbursed by the Previous Adviser, where applicable, for the three most recently completed fiscal years.

Advisory Fees Paid by the Fund


Fund	Fiscal Year Ended March 31, 2010	Fiscal Year Ended March 31, 2009		Fiscal Year Ended March 31, 2008
Short Term Bond Fund
Advisory Fee Paid to the Previous Adviser		$	3,615,919	$	2,820,376
Amount Waived by the Previous Adviser		$	221,792	$	188,025
Amount Reimbursed by the Previous Adviser			—		—

Portfolio Manager(s)

The following provides additional information about the portfolio manager(s) of the Adviser who are responsible for making the day-to-day investment decisions for the Fund. As described in the Management of the Fund — Primary Service Providers section of the Fund’s prospectuses, the portfolio manager(s) of the Adviser who are responsible for the Fund are:

Portfolio Manager(s) of the Adviser


Portfolio Manager		Fund
Leonard Aplet		Short Term Bond Fund
Gregory Scott Liechty		Short Term Bond Fund
Ronald Stahl		Short Term Bond Fund

Compensation

Compensation of Legacy Columbia Management Advisors, LLC Portfolio Managers

This section describes the compensation structure of the portfolio managers who were associates of the Previous Adviser prior to May 1, 2010.


Portfolio Manager	Primary Benchmark(s)	Peer Group(s) (Lipper Classification)
Leonard Aplet	Barclays Capital 1-3 Year Government/Credit Index	Lipper Short Investment Grade Debt Classification
Gregory Scott Liechty	Barclays Capital U.S. 1-3 Year Government/Credit Index	Lipper Short Investment Grade Debt Classification
Ronald Stahl	Barclays Capital 1-3 Year Government/Credit Index	Lipper Short Investment Grade Debt Classification

Other Accounts

The following table shows the number and assets of other investment accounts (or portions of investment accounts) that the portfolio manager(s) of the Adviser managed, as of March 31, 2010.

Other Accounts Managed by the Portfolio Manager(s)

Portfolio Manager

Other SEC-registered
Open-end and Closed-end Funds

Other Pooled
Investment Vehicles

Other Accounts

Number of
accounts

Assets

Number of
accounts

Assets

Number of
accounts

Assets

Leonard Aplet

Gregory Scott Liechty

Ronald Stahl

The following table shows the number and assets of the above accounts (or portions of such accounts) for which the compensation of the Adviser’s portfolio manager(s) is based on performance, as of March 31, 2010.

Other Accounts Managed by the Portfolio Manager(s) for which the Advisory Fee is Based on Performance

Portfolio Managers

Other SEC-registered
Open-end and Closed-end Funds

Other Pooled
Investment Vehicles

Other Accounts

Number of
accounts

Assets

Number of
accounts

Assets

Number of
accounts

Assets

Leonard Aplet

—

Gregory Scott Liechty

Ronald Stahl

—

Ownership of Securities

The table below shows the dollar ranges of shares of each Fund beneficially owned (as determined pursuant to Rule 16a-1(a)(2) under the 1934 Act) by the Fund’s portfolio manager(s), as of March 31, 2010.

Portfolio Manager Ownership of the Fund as of March 31, 2010


Portfolio Manager	Fund	Dollar Range of Equity Securities in the Fund Beneficially Owned
Leonard Aplet	Short Term Bond Fund
Gregory Scott Liechty
Ronald Stahl	Short Term Bond Fund

The Adviser’s Portfolio Managers and Potential Conflicts of Interest

Potential conflicts of interest also may arise when a portfolio manager has personal investments in other accounts that may create an incentive to favor those accounts. As a general matter and subject to the Adviser’s Code of Ethics and certain limited exceptions, the Adviser’s investment professionals do not have the opportunity to invest in client accounts, other than the Fund. A portfolio manager who is responsible for managing multiple funds and/or accounts may devote unequal time and attention to the management of those funds and/or accounts. The effects of this potential conflict may be more pronounced where funds and/or accounts managed by a particular portfolio manager have different investment strategies.

A portfolio manager may be able to select or influence the selection of the broker/dealers that are used to execute securities transactions for the Fund. A portfolio manager’s decision as to the selection of broker/dealers could produce disproportionate costs and benefits among the Fund and the other accounts the portfolio manager manages.

A potential conflict of interest may arise when a portfolio manager buys or sells the same securities for the Fund and other accounts. On occasions when a portfolio manager considers the purchase or sale of a security to be in the best interests of the Fund as well as other accounts, the Adviser’s trading desk may, to the extent consistent with applicable laws and regulations, aggregate the securities to be sold or bought in order to obtain the best execution and lower brokerage commissions, if any. Aggregation of trades may create the potential for unfairness to the Fund or another account if a portfolio manager favors one account over another in allocating the securities bought or sold.

“Cross trades,” in which a portfolio manager sells a particular security held by the Fund to another account (potentially saving transaction costs for both accounts), could involve a potential conflict of interest if, for example, a portfolio manager is permitted to sell a security from one account to another account at a higher price than an independent third party would pay. The Adviser and the Fund have adopted compliance procedures that provide that any transactions between the Fund and another account managed by the Adviser are to be made at a current market price, consistent with applicable laws and regulations.

Another potential conflict of interest may arise based on the different investment objectives and strategies of the Fund and other accounts managed by its portfolio manager(s). Depending on another account’s objectives and other factors, a portfolio manager may give advice to and make decisions for the Fund that may differ from advice given, or the timing or nature of decisions made, with respect to another account. A portfolio manager’s investment decisions are the product of many factors in addition to basic suitability for the particular account involved. Thus, a portfolio manager may buy or sell a particular security for certain accounts, and not for a Fund, even though it could have been bought or sold for the Fund at the same time. A portfolio manager also may buy a particular security for one or more accounts when one or more other accounts are selling the security (including short sales). There may be circumstances when a portfolio manager’s purchases or sales of portfolio securities for one or more accounts may have an adverse effect on other accounts, including the Fund.

The Fund’s portfolio manager(s) also may have other potential conflicts of interest in managing the Fund, and the description above is not a complete description of every conflict that could exist in managing the Fund and other accounts. Many of the potential conflicts of interest to which the Adviser’s portfolio managers are subject are essentially the same or similar to the potential conflicts of interest related to the investment management activities of the Adviser and its affiliates. See Investment Advisory and Other Services — Other Roles and Relationships of Ameriprise Financial and its Affiliates — Certain Conflicts of Interest for more information about conflicts of interest, including those that relate to the Adviser and its affiliates.

The Administrator

Columbia Management Investment Advisers, LLC (which is also the Adviser) serves as Administrator of the Fund.

Services Provided

Pursuant to the terms of the Administrative Services Agreement, the Administrator has agreed to provide all of the services and facilities necessary for, or appropriate to, the business and effective operation of the Fund that are not (a) provided by employees or other agents engaged by the Fund or (b) required to be provided by any person pursuant to any other agreement or arrangement with the Fund.

Administration Fee Rates and Fees Paid

The following chart shows the administration fees paid to the Previous Administrator for the three most recently completed fiscal years.

Administration Fees Paid by the Fund


Fund	Fiscal Year Ended March 31, 2010	Fiscal Year Ended March 31, 2009		Fiscal Year Ended March 31, 2008
Short Term Bond Fund
Administration Fee Paid to the Previous Administrator		$	1,550,851	$	1,165,896
Amount Waived/Reimbursed by the Previous Administrator		$	241,564		—

Pricing and Bookkeeping Services

State Street is responsible for providing certain pricing and bookkeeping services to the Fund. The Administrator is responsible for overseeing the performance of these services and for certain other services.

Services Provided

Effective December 15, 2006, the Trust entered into a Financial Reporting Services Agreement with State Street and the Previous Adviser (the Financial Reporting Services Agreement) pursuant to which State Street provides financial reporting services to the Fund. Also effective December 15, 2006, the Trust entered into an Accounting Services Agreement with State Street and the Previous Adviser (collectively with the Financial Reporting Services Agreement, the State Street Agreements) pursuant to which State Street provides accounting services to the Fund. Effective May 1, 2010, the State Street Agreements were amended to, among other things, assign and delegate the Previous Adviser’s rights and obligations under the State Street Agreements to the Administrator. Under the State Street Agreements, the Fund pays State Street an annual fee of $38,000 paid monthly plus an additional monthly fee based on an annualized percentage rate of average daily net assets of the Fund for the month. The aggregate fee for the Fund during any year shall not exceed $140,000 annually (exclusive of out-of-pocket expenses and charges). The Fund also reimburses State Street for certain out-of-pocket expenses and charges.

Previous Adviser in the performance of services under the Services Agreement. Prior to January 1, 2008, the Fund also reimbursed the Previous Adviser for accounting oversight services, services related to Fund expenses and the requirements of the Sarbanes-Oxley Act of 2002. Effective May 1, 2010, the services provided by the Previous Adviser under the Services Agreement are provided by the Administrator under the Administrative Services Agreement.

Pricing and Bookkeeping Fees Paid

The Previous Adviser and State Street received fees from the Fund for their services as reflected in the following chart, which shows the net pricing and bookkeeping fees paid to State Street and to the Previous Adviser for the three most recently completed fiscal years. Prior to December 1, 2005, pricing and bookkeeping agency services were provided by the Administrator under the Administrative Services Agreement.

Pricing and Bookkeeping Fees Paid by the Fund


Fund	Fiscal Year Ended March 31, 2010	Fiscal Year Ended March 31, 2009		Fiscal Year Ended March 31, 2008
Short Term Bond Fund		$	171,635	$	170,169
Amount Paid to the Previous Adviser			—	$	10,280
Amount Paid to State Street		$	171,635	$	159,889

The Principal Underwriter/Distributor

Columbia Management Investment Distributors, Inc. (the Distributor) serves as the principal underwriter and distributor for the continuous offering of shares of the Fund pursuant to a Distribution Agreement. The Distribution Agreement obligates the Distributor to use appropriate efforts to find purchasers for the shares of the Fund. The Distributor’s address is: One Financial Center, Boston, MA 02111.

Distribution Obligations

Pursuant to the Distribution Agreement, the Distributor, as agent, sells shares of the Fund on a continuous basis and transmits purchase and redemption orders that it receives to the Trust or the Transfer Agent, or their designated agents. Additionally, the Distributor has agreed to use appropriate efforts to solicit orders for the sale of shares and to undertake advertising and promotion as it believes appropriate in connection with such solicitation. Pursuant to the Distribution Agreement, the Distributor, at its own expense, finances those activities which are primarily intended to result in the sale of shares of the Fund, including, but not limited to, advertising, compensation of underwriters, dealers and sales personnel, the printing and mailing of prospectuses to other than existing shareholders, and the printing and mailing of sales literature. The Distributor, however, may be compensated or reimbursed for all or a portion of such expenses to the extent permitted by a Distribution Plan adopted by the Trust pursuant to Rule 12b-1 under the 1940 Act.

The Distribution Agreement became effective with respect to the Fund after approval by its Board, and, after an initial two-year period, continues from year to year, provided that such continuation of the Distribution Agreement is specifically approved at least annually by the Board, including its Independent Trustees. The Distribution Agreement terminates automatically in the event of its assignment, and is terminable with respect to the Fund at any time without penalty by the Trust (by vote of the Board or by vote of a majority of the outstanding voting securities of the Fund) or by the Distributor on 60 days’ written notice.

Underwriting Commissions

The following table shows all commissions and other compensation received by the Previous Distributor, as well as amounts the Previous Distributor retained, during the Fund’s past three fiscal periods.

Underwriting Commissions Paid by the Fund and Retained by the Distributor


Fund	Fiscal Year Ended March 31, 2010	Fiscal Year Ended March 31, 2009	Fiscal Year Ended March 31, 2008
Short Term Bond Fund
Amount Paid
Class Y shares		N/A	N/A
Amount Retained
Class Y shares		N/A	N/A


		Other Roles and Relationships of Ameriprise Financial and its Affiliates — Certain Conflicts of Interest

As described above in the Investment Advisory and Other Services section of this SAI, and in the Management of the Fund — Primary Service Providers section of the Fund’s prospectuses, the Adviser, Administrator, Distributor and Transfer Agent, all affiliates of Ameriprise Financial, receive compensation from the Fund for the various services they provide to the Fund. Additional information as to the specific terms regarding such compensation is set forth in these affiliated service providers’ contracts with the Fund, each of which typically is included as an exhibit to Part C of the Fund’s registration statement.

In many instances, the compensation paid to the Adviser and other Ameriprise Financial affiliates for the services they provide to the Fund is based, in some manner, on the size of the Fund’s assets under management. As the size of the Fund’s assets under management grows, so does the amount of compensation paid to the Adviser and other Ameriprise Financial affiliates for providing services to the Fund. This relationship between Fund assets and affiliated service provider compensation may create economic and other conflicts of interests of which Fund investors should be aware. These potential conflicts of interest, as well as additional ones, are discussed in detail below and also are addressed in other disclosure materials, including the Fund’s prospectuses. These conflicts of interest also are highlighted in account documentation and other disclosure materials of Ameriprise Financial affiliates that make available or offer the Columbia Funds as investments in connection with their respective products and services. In addition, Part 1A of the Adviser’s Form ADV, which it must file with the SEC as an investment adviser registered under the Investment Advisers Act of 1940, provides information about the Adviser’s business, assets under management, affiliates and potential conflicts of interest. Part 1A of the Adviser’s Form ADV is available online through the SEC’s website at www.adviserinfo.sec.gov.

Additional actual or potential conflicts of interest and certain investment activity limitations that could affect the Fund may arise from the financial services activities of Ameriprise Financial and its affiliates, including, for example, the investment advisory/management services provided for clients and customers other than the Fund. In this regard, Ameriprise Financial is a major financial services company. Ameriprise Financial and its affiliates, are engaged in a wide range of financial activities beyond the mutual fund-related activities of the Adviser, including, among others, broker/dealer (sales and trading), asset management, insurance and other financial activities. The broad range of financial services activities of Ameriprise Financial and its affiliates may involve multiple advisory, transactional, lending, financial and other interests in securities and other instruments, and in companies, that may be bought, sold or held by the Fund. The following describes certain actual and potential conflicts of interest that may be presented.

The Adviser and other affiliates of Ameriprise Financial may advise or manage funds and accounts other than the Fund. In this regard, Ameriprise Financial and its affiliates may provide investment advisory/management and other services to other advised/managed funds and accounts that are similar to those provided to the Fund. The Adviser and Ameriprise Financial’s other investment adviser affiliates (including, for example, Columbia Wanger Asset Management, LLC) will give advice to and make decisions for all advised/managed funds and accounts, including the Fund, as they believe to be in that fund’s and/or account’s best interests, consistent with their fiduciary duties. The Fund and the other advised/managed funds and accounts of Ameriprise Financial and its affiliates are separately and potentially divergently managed, and there is no assurance that any investment advice Ameriprise Financial and its affiliates give to other advised/managed funds and accounts will also be given simultaneously or otherwise to the Fund.

A variety of other actual and potential conflicts of interest may arise from the advisory relationships of the Adviser and other Ameriprise Financial affiliates with other clients and customers. Advice given to the Fund and/or investment decisions made for the Fund by the Adviser or other Ameriprise Financial affiliates may differ from, or may conflict with, advice given to and/or investment decisions made for other advised/managed funds and accounts. As a result, the performance of the Fund may differ from the performance of other funds or accounts advised/managed by the Adviser or other Ameriprise Financial affiliates. Similarly, a position taken by Ameriprise Financial and its affiliates, including the Adviser, on behalf of other funds or accounts may be contrary to a position taken on behalf of the Fund. Moreover, Ameriprise Financial and its affiliates, including the Adviser, may take a position on behalf of other advised/managed funds and accounts, or for their own proprietary accounts, that is adverse to companies or other issuers in which the Fund is invested. For example, the Fund may hold equity securities of a company while another advised/managed fund or account may hold debt securities of the same company. If the portfolio company were to experience financial difficulties, it might be in the best interest of the Fund for the company to reorganize while the interests of the other advised/managed fund or account might be better served by the liquidation of the company. This type of conflict of interest could arise as the result of circumstances that cannot be generally foreseen within the broad range of investment advisory/management activities in which Ameriprise Financial and its affiliates engage.

Investment transactions made on behalf of other funds or accounts advised/managed by the Adviser or other Ameriprise Financial affiliates also may have a negative effect on the value, price or investment strategies of the Fund. For example, this could occur if another advised/managed fund or account implements an investment decision ahead of, or at the same time as, the Fund and causes the Fund to experience less favorable trading results than it otherwise would have experienced based on market liquidity factors. In addition, the other funds and accounts advised/managed by the Adviser and other Ameriprise Financial affiliates, including the other Columbia Funds, may have the same or very similar investment objective and strategies as the Fund. In this situation, the allocation of, and competition for, investment opportunities among the Fund and other funds and/or accounts advised/managed by the Adviser or other Ameriprise Financial affiliates may create conflicts of interest especially where, for example, limited investment availability is involved. The Adviser has adopted policies and procedures addressing the allocation of investment opportunities among the Fund and other funds and accounts advised by the Adviser and other affiliates of Ameriprise Financial. For more information, see Investment Advisory and Other Services — The Adviser and Investment Advisory Services — Portfolio Manager(s) — The Adviser’s Portfolio Managers and Potential Conflicts of Interests.

Sharing of Information among Advised/Managed Accounts

Ameriprise Financial and its affiliates also may possess information that could be material to the management of the Fund and may not be able to, or may determine not to, share that information with the Fund, even though the information might be beneficial to the Fund. This information may include actual knowledge regarding the particular investments and transactions of other advised/managed funds and accounts, as well as proprietary investment, trading and other market research, analytical and technical models, and new investment techniques, strategies and opportunities. Depending on the context, Ameriprise Financial and its affiliates generally will have no obligation to share any such information with the Fund. In general, employees of

Ameriprise Financial and its affiliates, including the portfolio managers of the Adviser, will make investment decisions without regard to information otherwise known by other employees of Ameriprise Financial and its affiliates, and generally will have no obligation to access any such information and may, in some instances, not be able to access such information because of legal and regulatory constraints or the internal policies and procedures of Ameriprise Financial and its affiliates. For example, if the Adviser or another Ameriprise Financial affiliate, or their respective employees, come into possession of non-public information regarding another advised/managed fund or account, they may be prohibited by legal and regulatory constraints, or internal policies and procedures, from using that information in connection with transactions made on behalf of the Fund. For more information, see Investment Advisory and Other Services — The Adviser and Investment Advisory Services — Portfolio Manager(s) — The Adviser’s Portfolio Managers and Potential Conflicts of Interests.

Soft Dollar Benefits

Certain products and services, commonly referred to as “soft dollar services” (including, to the extent permitted by law, research reports, economic and financial data, financial publications, proxy analysis, computer databases and other research-oriented materials), that the Adviser may receive in connection with brokerage services provided to the Fund may have the inadvertent effect of disproportionately benefiting other advised/managed funds or accounts. This could happen because of the relative amount of brokerage services provided to the Fund as compared to other advised/managed funds or accounts, as well as the relative compensation paid by the Fund.

Services Provided to Other Advised/Managed Accounts

Ameriprise Financial and its affiliates also may act as an investment adviser, investment manager, administrator, transfer agent, custodian, trustee, broker/dealer, agent, or in another capacity, for advised/managed funds and accounts other than the Fund, and may receive compensation for acting in such capacity. This compensation that the Adviser, Distributor and Transfer Agent and other Ameriprise Financial affiliates receive could be greater than the compensation Ameriprise Financial and its affiliates receive for acting in the same or similar capacity for the Fund. In addition, the Adviser, Distributor and Transfer Agent and other Ameriprise Financial affiliates may receive other benefits, including enhancement of new or existing business relationships. This compensation and/or the benefits that Ameriprise Financial and its affiliates may receive from other advised/ managed funds and accounts and other relationships could potentially create incentives to favor other advised/managed funds and accounts over the Fund. Trades made by Ameriprise Financial and its affiliates for the Fund may be, but are not required to be, aggregated with trades made for other funds and accounts advised/managed by the Adviser and other Ameriprise Financial affiliates. If trades are aggregated among the Fund and those other funds and accounts, the various prices of the securities being traded may be averaged, which could have the potential effect of disadvantaging the Fund as compared to the other funds and accounts with which trades were aggregated.

Proxy Voting

Although the Adviser endeavors to make all proxy voting decisions with respect to the interests of the Fund for which it is responsible in accordance with its proxy voting policies and procedures, the Adviser’s proxy voting decisions with respect to the Fund’s portfolio securities may nonetheless benefit other advised/managed funds and accounts, and/or clients, of Ameriprise Financial and its affiliates. The Adviser has adopted proxy voting policies and procedures that are designed to provide that all proxy voting is done in the best interests of its clients, including the Fund, without any resulting benefit or detriment to the Adviser and/or its affiliates, including Ameriprise Financial and its affiliates. For more information about the Adviser’s proxy voting policies and procedures, see Investment Advisory and Other Services — Proxy Voting Policies and Procedures.

Certain Trading Activities

Fund. In order to reduce the possibility that such personal investment activities of the directors/trustees, officers and employees of Ameriprise Financial and its affiliates will materially adversely affect the Fund, Ameriprise Financial and its affiliates have adopted policies and procedures, and the Fund, the Board, the Adviser and the Distributor have each adopted a Code of Ethics that addresses such personal investment activities. For more information, see Investment Advisory and Other Services — Codes of Ethics.

Affiliate Transactions

Subject to applicable legal and regulatory requirements, the Fund may enter into transactions in which Ameriprise Financial and/or its affiliates may have an interest that potentially conflicts with the interests of the Fund. For example, an affiliate of Ameriprise Financial may sell securities to the Fund from an offering in which it is an underwriter or from securities that it owns as a dealer, subject to applicable legal and regulatory requirements.

Investment Limitations Arising from Ameriprise Financial Activities

Regulatory restrictions applicable to Ameriprise Financial and its affiliates may limit the Fund’s investment activities in various ways. For example, regulations regarding certain industries and markets, such as those in emerging or international markets, and certain transactions, such as those involving certain futures and derivatives, may impose a cap on the aggregate amount of investments that may be made by affiliated investors, including accounts managed by the same affiliated manager, in the aggregate or in individual issuers. At certain times, Ameriprise Financial and its affiliates also may be restricted in the securities that can be bought or sold for the Fund and other advised/managed funds and accounts because of the lending or other relationships Ameriprise Financial and its affiliates have with the issuers of securities. This could happen, for example, if the Fund and/or other advised/managed funds and accounts desired to buy a security issued by a company for which Ameriprise Financial or its affiliates served as underwriter. The internal policies and procedures of Ameriprise Financial and its affiliates covering these types of regulatory restrictions and addressing similar issues also may at times restrict the Fund’s investment activities. A client not advised by Ameriprise Financial and its affiliates would not be subject to many of these restrictions. See also About the Fund’s Investments — Certain Investment Activity Limits.

Actual and Potential Conflicts of Interest Related to Ameriprise Financial and its Affiliates’ Non-Advisory Relationships with Clients and Customers other than the Fund

The financial relationships that Ameriprise Financial and its affiliates may have with companies and other entities in which the Fund may invest can give rise to actual and potential conflicts of interest. Subject to applicable legal and regulatory requirements, the Fund may invest (a) in the securities of Ameriprise Financial and/or its affiliates and/or in companies in which Ameriprise Financial and its affiliates have an equity, debt or other interest, and/or (b) in the securities of companies held by other Columbia Funds. The purchase, holding and sale of such securities by the Fund may enhance the profitability and the business interests of Ameriprise Financial and/or its affiliates and/or other Columbia Funds. There also may be limitations as to the sharing with the Adviser of information derived from the non-investment advisory/management activities of Ameriprise Financial and its affiliates because of legal and regulatory constraints and internal policies and procedures (such as information barriers and ethical walls). Because of these limitations, Ameriprise Financial and its affiliates generally will not share information derived from its non-investment advisory/management activities with the Adviser.

Actual and Potential Conflicts of Interest Related to Ameriprise Financial Affiliates’ Marketing and Use of the Columbia Funds as Investment Options

investments in connection with brokerage and other securities products offered by Ameriprise Financial and its affiliates, and may be utilized as investments in connection with fiduciary, investment management and other accounts offered by affiliates of Ameriprise Financial, as well as for other Columbia Funds structured as “funds of funds.” The use of the Columbia Funds in connection with other products and services offered by Ameriprise Financial and its affiliates may introduce economic and other conflicts of interest. These conflicts of interest are highlighted in account documentation and other disclosure materials for the other products and services offered by Ameriprise Financial and its affiliates.

Ameriprise Financial and its affiliates, including the Adviser, may make payments to their affiliates in connection with the promotion and sale of the Fund’s shares, in addition to the sales-related and other compensation that these parties may receive from the Fund. As a general matter, personnel of Ameriprise Financial and its affiliates do not receive compensation in connection with their sales or use of the Fund that is greater than that paid in connection with their sales of other comparable products and services. Nonetheless, because the compensation that the Adviser and other affiliates of Ameriprise Financial may receive for providing services to the Fund is generally based on the Fund’s assets under management and those assets will grow as shares of the Fund are sold, potential conflicts of interest may exist. See Brokerage Allocation and Other Practices — Additional Financial Intermediary Payments for more information.

Other Services Provided

The Transfer Agent

Columbia Management Investment Services Corp. acts as Transfer Agent for the Fund’s shares and can be contacted at P.O. Box 8081, Boston, MA 02266-8081. Under the Transfer Agency Agreement, the Transfer Agent provides transfer agency, dividend disbursing agency and shareholder servicing agency services to the Fund. The Fund pays the Transfer Agent an annual transfer agency fee of $17.34 per Class Y share account, payable monthly. Effective January 1, 2010, the Fund will reimburse the Transfer Agent an annual transfer agency fee of $22.36 per Class Y share account, payable monthly. The Fund also pays certain reimbursable out-of-pocket expenses to the Transfer Agent. The Transfer Agent also may retain as additional compensation for its services revenues for fees for wire, telephone and redemption orders, IRA trustee agent fees and account transcripts due the Transfer Agent from Fund shareholders and credits (net of bank charges) earned with respect to balances in accounts the Transfer Agent maintains in connection with its services to the Fund.

The Transfer Agent retains BFDS/DST, 2 Heritage Drive, North Quincy, MA 02171 as the Fund’s sub-transfer agent. BFDS/DST assists the Transfer Agent in carrying out its duties.

The Custodian

State Street, which is located at State Street Financial Center, One Lincoln Street, Boston, MA 02111, is the Fund’s Custodian. State Street is responsible for safeguarding the Fund’s cash and securities, receiving and delivering securities and collecting the Fund’s interest and dividends.

Independent Registered Public Accounting Firm

[ ], which is located at 125 High Street, Boston, MA 02110, is the Fund’s independent registered public accounting firm. The Fund issues unaudited financial statements semi-annually and audited financial statements annually. The annual financial statements for the Fund’s fiscal year ended March 31, 2010 have been audited by [ ]. The Board has selected [ ] as the independent registered public accounting firm to audit the Fund’s books and review its tax returns for the fiscal year ended March 31, 2011.

The Report of the Independent Registered Public Accounting firm and the audited financial statements included in the Annual Report to Shareholders of the Fund dated March 31, 2010 are incorporated herein by reference. No other parts of the annual report or semi-annual report to shareholders are incorporated by reference

herein. The financial statements incorporated by reference into the Fund’s prospectuses and this SAI have been so incorporated in reliance upon the report of the independent registered public accounting firm, given on its authority as an expert in auditing and accounting.

Counsel

Goodwin Procter LLP serves as legal counsel to the Trust. Its address is 901 New York Avenue, N.W., Washington, D.C. 20001.

Distribution and Servicing Plans

The Trust has not adopted distribution and servicing plans for Class Y shares of the Fund.

Expense Limitations


Fund		Expenses Exceeding:
Short Term Bond Fund		0.48% of average daily net assets

Codes of Ethics

The Fund, the Adviser and the Distributor have adopted Codes of Ethics pursuant to the requirements of the 1940 Act, including Rule 17j-1 under the 1940 Act. These Codes of Ethics permit personnel subject to the Codes of Ethics to invest in securities, including securities that may be bought or held by the Fund. These Codes of Ethics are included as exhibits to Part C of the Fund’s registration statement. These Codes of Ethics can be reviewed and copied at the SEC’s Public Reference Room and may be obtained by calling the SEC at 202.551.8090; they also are available on the SEC’s website at www.sec.gov, and may be obtained, after paying a duplicating fee, by electronic request to publicinfo@sec.gov or by writing to the SEC’s Public Reference Section, Washington, D.C. 20549-1520.

Proxy Voting Policies and Procedures

The Fund has delegated to the Adviser or, as applicable, a subadviser, the responsibility to vote proxies relating to portfolio securities held by the Fund. In deciding to delegate this responsibility to the Adviser, the Board reviewed and approved the policies and procedures adopted by the Adviser and, as applicable, a subadviser. These included the procedures that the Adviser follows when a vote presents a conflict between the interests of the Fund and its shareholders and the Adviser (or subadviser), its affiliates, its other clients or other persons.

The Adviser’s policy is to vote all proxies for Fund securities in a manner considered by the Adviser to be in the best interest of the Fund and its shareholders without regard to any benefit to the Adviser, its affiliates, its other clients or other persons. The Adviser examines each proposal and votes against the proposal, if, in its judgment, approval or adoption of the proposal would be expected to have an adverse impact on the current or potential market value of the issuer’s securities. The Adviser also examines each proposal and votes the proxies against the proposal, if, in its judgment, the proposal would be expected to affect adversely the best interest of the Fund. The Adviser determines the best interest of the Fund in light of the potential economic return on the Fund’s investment.

The Adviser seeks to address potential material conflicts of interest by having predetermined voting guidelines. For those proposals that require special consideration or in instances where special circumstances may require varying from the predetermined guideline, the Adviser’s Proxy Voting Committee determines the vote in the best interest of the Fund, without consideration of any benefit to the Adviser, its affiliates, its other clients or other persons. The Adviser’s Proxy Voting Committee is composed of representatives of the Adviser’s equity investments, equity research, compliance, legal and operations functions. In addition to the responsibilities described above, the Proxy Voting Committee has the responsibility to review, at least annually, the Adviser’s proxy voting policies to ensure consistency with internal policies and regulatory requirements and to develop additional predetermined voting guidelines to assist in the review of proxy proposals.

The Proxy Voting Committee may vary from a predetermined guideline if it determines that voting on the proposal according to the predetermined guideline would be expected to have an adverse impact on the current or potential market value of the issuer’s securities or to affect adversely the best interest of the Fund. References to the best interests of the Fund refer to the interest of the Fund in terms of the potential economic return on the client’s investment. In determining the vote on any proposal, the Proxy Voting Committee does not consider any benefit other than benefits to the Fund. A member of the Proxy Voting Committee is prohibited from voting on any proposal for which he or she has a conflict of interest by reason of a direct relationship with the issuer or other party affected by a given proposal. Persons making recommendations to the Proxy Voting Committee or its members are required to disclose to the Committee any relationship with a party making a proposal or other matter known to the person that would create a potential conflict of interest.

Information regarding how the Columbia Funds (except certain Columbia Funds that do not invest in voting securities) voted proxies relating to portfolio securities during the most recent twelve month period ended June 30 will be available by August 31 of this year free of charge: (i) through the Columbia Funds’ website at www.columbiafunds.com and (ii) on the SEC’s website at www.sec.gov. For a copy of the Adviser’s and the subadviser’s policies and procedures that are used to determine how to vote proxies relating to portfolio securities held by the Columbia Funds, see Appendix B to this SAI.

Expenses Paid by Third Parties

The Distributor and the Administrator furnish, without additional cost to the Fund, the services of certain officers of the Fund and such other personnel (other than the personnel of the Adviser or the investment subadviser(s), if applicable) as are required for the proper conduct of the Fund’s affairs. The Distributor bears the incremental expenses of printing and distributing prospectuses used by the Distributor or furnished by the Distributor to investors in connection with the public offering of the Fund’s shares and the costs of any other promotional or sales literature, except that to the extent permitted under the Distribution Plans of the Fund, sales-related expenses incurred by the Distributor may be reimbursed by the Fund.

The Fund pays or causes to be paid all other expenses of the Fund, including, without limitation: the fees of the Adviser, the Distributor and the Administrator; the charges and expenses of any registrar, any custodian or depository appointed by the Fund for the safekeeping of its cash, Fund securities and other property, and any stock transfer, dividend or accounting agent or agents appointed by the Fund; brokerage commissions chargeable to the Fund in connection with Fund securities transactions to which the Fund is a party; all taxes, including securities issuance and transfer taxes; corporate fees payable by the Fund to federal, state or other governmental agencies; all costs and expenses in connection with the registration and maintenance of registration of the Fund’s shares with the SEC and various states and other jurisdictions (including filing fees, legal fees and disbursements of counsel); the costs and expenses of preparing and typesetting prospectuses and statements of additional information of the Fund (including supplements thereto) and periodic reports and of printing and distributing such prospectuses and statements of additional information (including supplements thereto) to the Fund’s

shareholders; all expenses of shareholders’ and Trustee meetings and of preparing, printing and mailing proxy statements and reports to shareholders; fees and travel expenses of directors or director members of any advisory board or committee; all expenses incident to the payment of any distribution, whether in shares or cash; charges and expenses of any outside service used for pricing of the Fund’s shares; fees and expenses of legal counsel and of independent auditors in connection with any matter relating to the Fund; membership dues of industry associations; interest payable on Fund borrowings; postage and long-distance telephone charges; insurance premiums on property or personnel (including officers and directors) of the Fund which inure to their benefit; extraordinary expenses (including, but not limited to, legal claims and liabilities and litigation costs and any indemnification related thereto); and all other charges and costs of the Fund’s operation unless otherwise explicitly assumed by the Adviser or the Administrator.

Expenses of the Fund which are not attributable to the operations of any class of shares or Fund are pro-rated among all classes of shares or Fund based upon the relative net assets of each class or Fund. Expenses which are not directly attributable to a specific class of shares but are attributable to a specific Fund are prorated among all the classes of shares of such Fund based upon the relative net assets of each such class of shares. Expenses which are directly attributable to a class of shares are charged against the income available for distribution as dividends to such class of shares.

FUND GOVERNANCE

The Board

Leadership Structure and Risk Oversight

The Board oversees management of the Trust and the Fund. The Board has a duty to act in the best interest of shareholders when supervising and overseeing the management and operations of the Trust. The Board consists of seven Trustees who have extensive and varied experience and skills. Six of the Trustees are Independent Trustees. The Trust currently treats the remaining Trustee, Dr. Anthony M. Santomero, as an “interested person” (as defined in the 1940 Act) of the Columbia Funds (the Interested Trustee) because he serves as a Director of Citigroup, Inc. and CitiBank N.A. companies that may engage from time-to-time in brokerage execution, principal transactions and lending relationships with the Fund or other funds or accounts advised/managed by the Adviser. Further information about the background and qualifications of each of the Trustees can be found in the section Trustee Biographical Information and Qualifications .

The Board has several standing committees (the Committees), which are an integral part of the Fund’s overall governance and risk management oversight structure. The standing Committees are the Audit Committee, the Governance Committee, the Contracts Review Committee and the Investment Committee. The roles of each Committee are more fully described in the section Standing Committees below.

The Fund have retained the Adviser as the Fund’s investment adviser and administrator. The Adviser provides the Fund with investment advisory services, and is responsible for day-to-day management and administration of the Fund and management of the risks that arise from the Fund’s investments and operations. The Board is responsible for overseeing the Adviser and other service providers in the operation of the Trust, including with respect to risk management functions. The Fund and the Trust are subject to a number of risks, including investment, compliance, operational, and valuation risks, among others. Day-to-day risk management functions are subsumed within the responsibilities of the Adviser, the subadvisers and other service providers (depending on the nature of the risk), who carry out the Fund’s investment management and business affairs. Each of the Adviser, the subadvisers and other service providers have their own, independent interest in risk management, and their policies and methods of carrying out risk management functions will depend, in part, on their analysis of the risks, functions and business models.

Risk oversight forms part of the Board’s general oversight of the Fund and the Trust and is addressed as part of various Board and Committee activities. The Board recognizes that it is not possible to identify all of the risks that may affect the Fund or to develop processes and controls to eliminate or even mitigate their occurrence or effects. As part of its regular oversight of the Trust, the Board, directly or through a Committee, interacts with and reviews reports from, among others, the Adviser, subadvisers, the independent registered public accounting firm for the Fund, and internal auditors for the Adviser or its affiliates, as appropriate, regarding risks faced by the Fund and relevant risk functions. The Board and the Audit Committee also meet periodically with the Fund’s Chief Compliance Officer, to receive reports regarding the compliance of the Fund and their principal service providers with the federal securities laws and their internal compliance policies and procedures. The Board and the Audit Committee review and approve the compliance program of the Fund and certain of its service providers, and also receive periodic and annual reports from the Fund’s Chief Compliance Officer, as required under applicable regulations. The Board, with the assistance of the Investment Committee, reviews investment

policies and risks in connection with its review of the Fund’s performance, and meets periodically with the portfolio managers of the Fund to receive reports regarding the management of the Fund, including their investment risks. In addition, as part of the Board’s periodic review of the Fund’s advisory, subadvisory and other service provider agreements, the Board may consider risk management aspects of their operations and the functions for which they are responsible.

Standing Committees

The Trust has four standing Committees, which are the Audit Committee, the Contracts Review Committee, the Governance Committee and the Investment Committee.

In general, the function of the Audit Committee is oversight of the financial aspects of the Trust and Fund and approval of and interaction with the Fund’s Independent Auditors. Management (which generally means the appropriate officers of the Trust, and the Fund’s investment adviser(s), administrator(s) and other key service providers (other than the independent registered public accounting firm)) is primarily responsible for the preparation of the financial statements of each Fund, and the independent registered public accounting firm is responsible for auditing those financial statements. Management also is responsible for maintaining appropriate systems for accounting and “internal controls over financial reporting” (as such term is defined in Rule 30a-3 under the 1940 Act), and the independent registered public accounting firm is primarily responsible for considering such internal controls over financial reporting in connection with its financial statement audits. While the Audit Committee has the duties and powers set forth in the Audit Committee charter, the Audit Committee is not responsible for planning or conducting any Fund audit or for determining whether the Fund’s financial statements are complete and accurate and are in accordance with generally accepted accounting principles.

The Audit Committee has, among other things, specific power and responsibility to: (i) oversee its Fund’s accounting and financial reporting processes and practices, its internal controls over financial reporting and, as appropriate, the internal controls over financial reporting of the Fund maintained by key service providers; (ii) approve, and recommend to the full Board for its approval in accordance with applicable law, the selection and appointment of an independent registered public accounting firm for the Fund prior to the engagement of such independent registered public accounting firm; (iii) pre-approve all audit and non-audit services provided to the Fund by its independent registered public accounting firm, directly or by establishing pre-approval policies and procedures pursuant to which such services may be rendered, provided however, that the policies and procedures are detailed as to the particular service and the Audit Committee is informed of each service, and such policies do not include the delegation to management of the Audit Committee’s responsibilities under the 1934 Act or applicable rules or listing requirements; and (iv) pre-approve all non-audit services provided by the Fund’s independent registered public accounting firm to the Fund’s investment adviser and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the Fund, if the engagement relates directly to the operations and financial reporting of the Fund. The members of the Audit Committee are William A. Hawkins (Chair), Edward J. Boudreau, Jr. and William P. Carmichael. The Audit Committee members are all Independent Trustees. The Audit Committee met on [ ] occasions during the last fiscal year.

The primary responsibilities of the Governance Committee include, as set forth in its charter: (i) nominating Independent Trustees; (ii) overseeing issues of corporate governance for the Trust and the Fund; (iii) addressing matters relating to compensation of Trustees who are not current directors, officers or employees of the Fund’s investment adviser or subadviser or any control affiliate thereof, including deferred compensation and retirement policies; and (iv) evaluating each Board and its committee structure as often as it deems necessary or desirable to determine whether each is functioning effectively. The Governance Committee shall determine the nature of the evaluation and its role therein in its sole discretion. The members of the Governance Committee are Minor M. Shaw (Chair), William A. Hawkins, R. Glenn Hilliard and William P. Carmichael (ex officio). The Governance Committee members are all Independent Trustees. The Governance Committee met on [ ] occasions during the last fiscal year.

Following is a summary of each Trustee’s particular professional and other experience that qualifies each person to serve as a Trustee of the Trust as of the date of this SAI:

Independent Trustee Biographical Information


Name, Year of Birth and Position Held with the Trust	Year First Appointed or Elected to a Board in the Columbia Funds Complex	Principal Occupation(s) During the Past Five Years	Number of Funds in the Columbia Funds Complex Overseen	Other Directorships Held by Trustee During the Past Five Years
Edward J. Boudreau, Jr. (Born 1944) Trustee	Indefinite term; Trustee since January 2005	Managing Director — E.J. Boudreau & Associates (consulting), from 2000 through current	52	Trustee — BofA Funds Series Trust

William P. Carmichael (Born 1943) Trustee and Chairman of the Board	Indefinite term; Trustee since 1999	Retired	52	Director — Cobra Electronics Corporation (electronic equipment manufacturer); Simmons Company (bedding); and The Finish Line (athletic shoes and apparel); Trustee — BofA Funds Series Trust

William A. Hawkins (Born 1942) Trustee	Indefinite term; Trustee since January 2005	President and Chief Executive Officer — California Bank, N.A., from January 2008 through current	52	Trustee — BofA Funds Series Trust

R. Glenn Hilliard (Born 1943) Trustee	Indefinite term; Trustee since January 2005	Chairman and Chief Executive Officer — Hilliard Group LLC (investing and consulting), from April 2003 through current; Non-Executive Director & Chairman — Conseco, Inc. (insurance), September 2003 through current; Executive Chairman — Conseco, Inc. (insurance), August 2004 through September 2005	52	Director — Conseco, Inc. (insurance); Trustee — BofA Funds Series Trust


Name, Year of Birth and Position Held with the Trust	Year First Appointed or Elected to a Board in the Columbia Funds Complex	Principal Occupation(s) During the Past Five Years	Number of Funds in the Columbia Funds Complex Overseen	Other Directorships Held by Trustee During the Past Five Years
John J. Nagorniak (Born 1944) Trustee	Indefinite term; Trustee since January 2008	Retired; President and Director — Foxstone Financial, Inc. (consulting), 2000 through December 2007; Director — Mellon Financial Corporation affiliates (investing), 2000 through 2007; Chairman — Franklin Portfolio Associates (investing — Mellon affiliate) 1982 through 2007	52	Trustee — Research Foundation of CFA Institute; Director — MIT Investment Company; Trustee — MIT 401k Plan; Trustee — BofA Funds Series Trust

Minor M. Shaw (Born 1947) Trustee	Indefinite term; Trustee since 2003	President — Micco Corporation and Mickel Investment Group	52	Board Member — Piedmont Natural Gas; Trustee — BofA Funds Series Trust

*Interested Trustee Biographical Information*

Anthony M. Santomero* (Born 1946) Trustee	Indefinite term; Trustee since January 2008	Richard K. Mellon Professor Emeritus of Finance, The Wharton School, University of Pennsylvania, from 2002 through current; Senior Adviser — McKinsey & Company (consulting), 2006 through 2008; President and Chief Executive Officer — Federal Reserve Bank of Philadelphia, 2000 through 2006	52	Director — Renaissance Reinsurance Ltd.; Trustee — Penn Mutual Life Insurance Company; Director — Citigroup; Trustee — BofA Funds Series Trust

The Fund currently treat Mr. Santomero as an “interested person” (as defined in the 1940 Act) of the Fund because he serves as a Director of Citigroup, Inc. and Citibank, N.A. Citigroup, Inc., through its subsidiaries and affiliates, including Citibank, N.A., may engage from time-to-time in brokerage execution, principal transactions and/or lending relationships with the Columbia Funds or other funds or accounts advised/managed by the Adviser.

Compensation

Trustees are compensated for their services to the Columbia Funds Family on a complex-wide basis, as shown in the table below.

Independent Trustee Compensation for the Fiscal Year Ended March 31, 2010


Name of Trustee		Aggregate Compensation for Short Term Bond Fund for the Fiscal Year ended March 31, 2010 ^(a)
Edward J. Boudreau, Jr. ^(b)
William P. Carmichael ^(c)
Minor M. Shaw ^(d)
R. Glenn Hilliard ^(e)
William A. Hawkins ^(f)
John J. Nagorniak ^(g)

*Interested Trustee Compensation for the Fiscal Year Ended March 31, 2010*

Anthony M. Santomero ^(h)


*Independent Trustee Compensation for the Calendar Year Ended December 31, 2009*

Name of Trustee		Total Compensation from the Columbia Funds Complex Paid to Independent Trustees for the Calendar Year ended December 31, 2009 ^(a)
Edward J. Boudreau, Jr. ^(b)
William P. Carmichael ^(c)
Minor M. Shaw ^(d)
R. Glenn Hilliard ^(e)
William A. Hawkins ^(f)
John J. Nagorniak ^(g)

*Interested Trustee Compensation for the Calendar Year Ended December 31, 2009*

Anthony M. Santomero ^(h)

^(a)	All Trustees receive reimbursements for reasonable expenses related to their attendance at meetings of the Board or standing committees, which are not included in the amounts shown.

^(b)

^(c)

^(d)

^(e)

^(f)	During the fiscal year ended March 31, 2010, Mr. Hawkins deferred $0 of his compensation from the Fund. During the calendar year ended December 31, 2009, Mr. Hawkins deferred $0 of his total compensation from the Columbia Funds pursuant to the deferred compensation plan.

^(g)

^(h)

Columbia Funds Deferred Compensation Plan

Beneficial Equity Ownership

As of the date of this SAI, the Trustees and Officers of the Trust, as a group, beneficially owned less than 1% of each class of shares of the Fund. The table below shows, for each Trustee, the amount of Fund equity securities beneficially owned by the Trustee and the aggregate value of all investments in equity securities of the Columbia Funds Family overseen by the Trustee, stated as one of the following ranges: A = $0; B = $1-$10,000; C = $10,001-$50,000; D = $50,001-$100,000; and E = over $100,000.

Independent Trustee Ownership for the Calendar Year Ended December 31, 2009


Trustee	Dollar Range of Equity Securities in the Fund	Aggregate Dollar Range of Equity Securities in all Funds in the Columbia Funds Family Overseen by the Trustee
Edward J. Boudreau, Jr.	Short Term Bond Fund —

William P. Carmichael	Short Term Bond Fund —

Minor M. Shaw	Short Term Bond Fund —

R. Glenn Hilliard	Short Term Bond Fund —

William A. Hawkins	Short Term Bond Fund —

John J. Nagorniak	Short Term Bond Fund —

*Interested Trustee Ownership for the Calendar Year Ended December 31, 2009*

Anthony M. Santomero	Short Term Bond Fund —

The Officers

Officer Biographical Information


Name, Year of Birth and Address	Position with the Trust	Year First Elected or Appointed to Office	Principal Occupation(s) During the Past Five Years
J. Kevin Connaughton (Born 1964) One Financial Center Boston, MA 02111	President (Principal Executive Officer)	2009	Senior Vice President and General Manager — Mutual Fund Products, Columbia Management Investment Advisers, LLC since May 2010; President, Columbia Funds, since 2009, and RiverSource Funds, since May 2010 (previously Senior Vice President and Chief Financial Officer, Columbia Funds, from June 2008 to January 2009, Treasurer, Columbia Funds, from October 2003 to May 2008, and senior officer of various other affiliated funds since 2000); Managing Director, Columbia Management Advisors, LLC from December 2004 to April 2010.

Michael G. Clarke (Born 1969) One Financial Center Boston, MA 02111	Senior Vice President and Chief Financial Officer ( Principal Financial Officer )	2009	Vice President, Columbia Management Investment Advisers, LLC since May 2010; Managing Director of Fund Administration, Columbia Management Advisors, LLC, from September 2004 to April 2010; senior officer of Columbia Funds and affiliated funds since 2002.


Name, Year of Birth and Address	Position with the Trust	Year First Elected or Appointed to Office	Principal Occupation(s) During the Past Five Years
Scott R. Plummer (Born 1959) 5228 Ameriprise Financial Center Minneapolis, MN 55474	Senior Vice President, Secretary and Chief Legal Officer	2010	Chief Legal Officer and Assistant Secretary, Columbia Management Investment Advisers, LLC since June 2005; Vice President and Lead Chief Counsel — Asset Management, Ameriprise Financial, Inc. since May 2010 (previously Vice President and Chief Counsel — Asset Management, from 2005 to April 2010, and Vice President — Asset Management Compliance from 2004 to 2005); Vice President, Chief Counsel and Assistant Secretary, Columbia Management Investment Distributors, Inc. since 2008; Vice President, General Counsel and Secretary, Ameriprise Certificate Company since 2005; Chief Counsel, RiverSource Distributors, Inc. since 2006; Vice President, General Counsel and Secretary, RiverSource Funds, since December 2006; Senior Vice President, Secretary and Chief Legal Officer, Columbia Funds, since May 2010.

Linda J. Wondrack (Born 1964) One Financial Center Boston, MA 02111	Senior Vice President and Chief Compliance Officer	2007	Vice President and Chief Compliance Officer, Columbia Management Investment Advisers, LLC since May 2010; Chief Compliance Officer, Columbia Funds, since 2007, and RiverSource Funds, since May 2010; Director (Columbia Management Group, LLC and Investment Product Group Compliance), Bank of America, from June 2005 to April 2010; Director of Corporate Compliance and Conflicts Officer of MFS Investment Management (investment management) from August 2004 to May 2005.


Name, Year of Birth and Address	Position with the Trust	Year First Elected or Appointed to Office	Principal Occupation(s) During the Past Five Years
William F. Truscott (Born 1960) 53600 Ameriprise Financial Center Minneapolis, MN 55474	Senior Vice President	2010	Chairman of the Board, Columbia Management Investment Advisers, LLC since May 2010 (previously President, Chairman of the Board and Chief Investment Officer, from 2001 to April 2010); Chief Executive Officer, U.S. Asset Management & President, Annuities, Ameriprise Financial, Inc. since May 2010 (previously President — U.S. Asset Management and Chief Investment Officer from 2005 to April 2010, and Senior Vice President — Chief Investment Officer, from 2001 to 2005); Director, President and Chief Executive Officer, Ameriprise Certificate Company since 2006; Director, Columbia Management Investment Distributors, Inc. since May 2010 (previously Chairman of the Board and Chief Executive Officer from 2008 to April 2010); Chairman of the Board and Chief Executive Officer, RiverSource Distributors, Inc. since 2006.

Colin Moore (Born 1958) One Financial Center Boston, MA 02111	Senior Vice President	2010	Director and Chief Investment Officer, Columbia Management Investment Advisers, LLC since May 2010; Manager, Managing Director and Chief Investment Officer of Columbia Management Advisors, LLC from 2007 to April 2010; Head of Equities, Columbia Management Advisors, LLC from 2002 to 2007.

Michael A. Jones (Born 1959) 100 Federal Street Boston, MA 02110	Senior Vice President	2010	Director and President, Columbia Management Investment Advisers, LLC since May 2010; President and Director, Columbia Management Investment Distributors, Inc. since May 2010; Manager, Chairman, Chief Executive Officer and President, Columbia Management Advisors, LLC from 2007 to April 2010; Chief Executive Officer, President and Director, Columbia Management Distributors, Inc. from November 2006 to April 2010; previously, co-president and senior managing director at Robeco Investment Management.


Name, Year of Birth and Address	Position with the Trust	Year First Elected or Appointed to Office	Principal Occupation(s) During the Past Five Years
Amy Johnson (Born 1965) 5228 Ameriprise Financial Center Minneapolis, MN 55474	Senior Vice President	2010	Senior Vice President and Chief Operating Officer of the Adviser, since May 2010; Chief Administrative Officer, the Adviser from 2009 until May 2010; Vice President — Asset Management and Trust Company Services, the Adviser, 2006-2009; Vice President — Operations and Compliance, the Adviser, 2004-2006; Director of Product Development — Mutual Funds, Ameriprise Financial, 2001-2004.

Joseph F. DiMaria (Born 1968) One Financial Center Boston, MA 02111	Treasurer and Chief Accounting Officer	2008	Vice President, Mutual Fund Administration, Columbia Management Investment Advisers, LLC, since May 2010; Director of Fund Administration, Columbia Management Advisors, LLC from January 2006 to April 2010; Head of Tax/Compliance and Assistant Treasurer, Columbia Management Advisors, LLC, from November 2004 to December 2005.

Marybeth Pilat (Born 1968) One Financial Center Boston, MA 02111	Deputy Treasurer	2010	Vice President, Mutual Fund Administration, Columbia Management Investment Advisers, LLC, since May 2010; Vice President, Investment Operations, Bank of America, from October 2008 to April 2010; Finance Manager, Boston Children’s Hospital from August 2008 to October 2008; Director, Mutual Fund Administration, Columbia Management Advisors, LLC, from May 2007 to July 2008; Vice President, Mutual Fund Valuation, Columbia Management Advisors, LLC, from January 2006 to May 2007; Vice President, Mutual Fund Accounting Oversight, Columbia Management Advisors, LLC from January 2005 to January 2006.

Julian Quero (Born 1967) One Financial Center Boston, MA 02111	Deputy Treasurer	2008	Vice President, Mutual Fund Administration, Columbia Management Investment Advisers, LLC since May 2010; Director of Fund Administration, Columbia Management Advisors, LLC, from August 2008 to April 2010; Senior Tax Manager, Columbia Management Advisors, LLC from August 2006 to July 2008; Senior Compliance Manager, Columbia Management Advisors, LLC from April 2002 to August 2006.


Name, Year of Birth and Address	Position with the Trust	Year First Elected or Appointed to Office	Principal Occupation(s) During the Past Five Years
Stephen T. Welsh (Born 1957) One Financial Center Boston, MA 02111	Vice President	2006	President and Director, Columbia Management Investment Services Corp. since May 2010; President and Director, Columbia Management Services, Inc. from July 2004 to April 2010; Managing Director, Columbia Management Distributors, Inc. from August 2007 to April 2010.

Kathryn Thompson (Born 1967) One Financial Center Boston, MA 02111	Assistant Treasurer	2006	Director, Mutual Fund Accounting Oversight and Treasury of the Adviser, since May 2010; Vice President, Mutual Fund Accounting Oversight of the Previous Adviser from December 2004 to April 2010; Vice President, State Street Corporation (financial services) prior to December 2004.

Paul B. Goucher (Born 1968) 5228 Ameriprise Financial Center Minneapolis, MN 55474	Assistant Secretary	2010	Vice President and Chief Counsel of Ameriprise Financial since January 2010 (formerly Vice President and Group Counsel from November 2008 to January 2010); Director, Managing Director and General Counsel of J. & W. Seligman & Co. Incorporated (Seligman) from July 2008 to November 2008 and Managing Director and Associate General Counsel of Seligman from January 2005 to July 2008.

Ryan C. Larrenaga (Born 1970) One Financial Center Boston, MA 02111	Assistant Secretary	2005	Counsel, Ameriprise Financial since May 2010; Assistant General Counsel, Bank of America from March 2005 to April 2010; Associate, Ropes & Gray LLP (law firm) from 1998 to February 2005.

Christopher O. Petersen (Born 1970) 5228 Ameriprise Financial Center Minneapolis, MN 55474	Assistant Secretary	2010	Vice President and Chief Counsel, Ameriprise Financial since January 2010 (formerly Vice President and Group Counsel or Counsel from April 2004 to January 2010); Assistant Secretary of RiverSource Funds since January 2007.

BROKERAGE ALLOCATION AND OTHER PRACTICES

General Brokerage Policy, Brokerage Transactions and Broker Selection

Subject to policies established by the Board, the Adviser (or the investment subadviser(s) who make(s) the day-to-day investment decisions for the Fund, as applicable) is responsible for decisions to buy and sell securities for the Fund, for the selection of broker/dealers, for the execution of the Fund’s securities transactions and for the allocation of brokerage commissions in connection with such transactions. The Adviser’s primary consideration in effecting a security transaction is to obtain the best net price and the most favorable execution of the order. Purchases and sales of securities on a securities exchange are effected through brokers who charge negotiated commissions for their services. Orders may be directed to any broker to the extent and in the manner permitted by applicable law.

In placing orders for portfolio securities of the Fund, the Adviser gives primary consideration to obtaining the best net prices and most favorable execution. This means that the Adviser will seek to execute each transaction at a price and commission, if any, which provides the most favorable total cost or proceeds reasonably attainable in the circumstances. In seeking such execution, the Adviser will use its best judgment in evaluating the terms of a transaction, and will give consideration to various relevant factors, including, without limitation, the size and type of the transaction, the nature and character of the market for the security, the confidentiality, speed and certainty of effective execution required for the transaction, the general execution and operational capabilities of the broker/dealer, the reputation, reliability, experience and financial condition of the broker/dealer, the value and quality of the services rendered by the broker/dealer in this instance and other transactions and the reasonableness of the spread or commission, if any. Research services received from broker/dealers supplement the Adviser’s own research and may include the following types of information: statistical and background information on industry groups and individual companies; forecasts and interpretations with respect to U.S. and foreign economies, securities, markets, specific industry groups and individual companies; information on political developments; Fund management strategies; performance information on securities and information concerning prices of securities; and information supplied by specialized services to the Adviser and to the Board with respect to the performance, investment activities and fees and expenses of other mutual funds. Such information may be communicated electronically, orally or in written form. Research services also may include the arranging of meetings with management of companies and the provision of access to consultants who supply research information.

placement of transactions of other clients may be of value to the Adviser in fulfilling its obligations to the Fund. The Adviser is of the opinion that this material is beneficial in supplementing its research and analysis; and, therefore, it may benefit the Trust by improving the quality of the Adviser’s investment advice. The advisory fees paid by the Trust are not reduced because the Adviser receives such services.

Under Section 28(e) of the 1934 Act, the Adviser shall not be “deemed to have acted unlawfully or to have breached its fiduciary duty” solely because under certain circumstances it has caused the account to pay a higher commission than the lowest available. To obtain the benefit of Section 28(e), the Adviser must make a good faith determination that the commissions paid are “reasonable in relation to the value of the brokerage and research services provided by such member, broker, or dealer, viewed in terms of either that particular transaction or his overall responsibilities with respect to the accounts as to which he exercises investment discretion.” Accordingly, the price to the Fund in any transaction may be less favorable than that available from another broker/dealer if the difference is reasonably justified by other aspects of the portfolio execution services offered. Some broker/dealers may indicate that the provision of research services is dependent upon the generation of certain specified levels of commissions and underwriting concessions by the Adviser’s clients, including the Fund.

In certain instances there may be securities that are suitable for more than one Fund as well as for one or more of the other clients of the Adviser. Investment decisions for the Fund and for the Adviser’s other clients are made with the goal of achieving their respective investment objectives. A particular security may be bought or sold for only one client even though it may be held by, or bought or sold for, other clients. Likewise, a particular security may be bought for one or more clients when one or more other clients are selling that same security. Some simultaneous transactions are inevitable when a number of accounts receive investment advice from the same investment adviser, particularly when the same security is suitable for the investment objectives of more than one client. When two or more clients are engaged simultaneously in the purchase or sale of the same security, the securities are allocated among clients in a manner believed to be equitable to each. In some cases, this policy could have a detrimental effect on the price or volume of the security in a particular transaction that may affect the Fund.

The Fund may participate, if and when practicable, in bidding for the purchase of portfolio securities directly from an issuer in order to take advantage of the lower purchase price available to members of a bidding group. The Fund will engage in this practice, however, only when the Adviser, in its sole discretion, believes such practice to be otherwise in the Fund’s interests.

The Trust will not execute portfolio transactions through, or buy or sell portfolio securities from or to, the Distributor, the Adviser, the Administrator or their affiliates acting as principal (including repurchase and reverse repurchase agreements), except to the extent permitted by applicable law, regulation or order. However, the Adviser is authorized to allocate buy and sell orders for portfolio securities to certain broker/dealers and financial institutions, including, in the case of agency transactions, broker/dealers and financial institutions that are affiliated with Ameriprise Financial. To the extent that the Fund executes any securities trades with an affiliate of Ameriprise Financial, the Fund does so in conformity with Rule 17e-1 under the 1940 Act and the procedures that the Fund has adopted pursuant to the rule. In this regard, for each transaction, the Board will determine that: (i) the transaction resulted in prices for and execution of securities transactions at least as favorable to the particular Fund as those likely to be derived from a non-affiliated qualified broker/dealer; (ii) the affiliated

broker/dealer charged the Fund commission rates consistent with those charged by the affiliated broker/dealer in similar transactions to clients comparable to the Fund and that are not affiliated with the broker/dealer in question; and (iii) the fees, commissions or other remuneration paid by the Fund did not exceed 2% of the sales price of the securities if the sale was effected in connection with a secondary distribution, or 1% of the purchase or sale price of such securities if effected in other than a secondary distribution.

Certain affiliates of Ameriprise Financial, may have deposit, loan or commercial banking relationships with the corporate users of facilities financed by industrial development revenue bonds or private activity bonds bought by certain of the Columbia Funds. Ameriprise Financial or certain of its affiliates may serve as trustee, custodian, tender agent, guarantor, placement agent, underwriter, or in some other capacity, with respect to certain issues of securities. Under certain circumstances, the Fund may buy securities from a member of an underwriting syndicate in which an affiliate of Ameriprise Financial is a member. The Trust has adopted procedures pursuant to Rule 10f-3 under the 1940 Act, and intends to comply with the requirements of Rule 10f-3, in connection with any purchases of municipal securities that may be subject to Rule 10f-3.

Given the breadth of the Adviser’s investment management activities, investment decisions for the Fund are not always made independently from those for other funds, or other investment companies and accounts advised or managed by the Adviser. When a purchase or sale of the same security is made at substantially the same time on behalf of one or more of the Columbia Funds and another investment portfolio, investment company or account, the transaction will be averaged as to price and available investments allocated as to amount in a manner which the Adviser believes to be equitable to the Fund and such other funds, investment portfolio, investment company or account. In some instances, this investment procedure may adversely affect the price paid or received by the Fund or the size of the position obtained or sold by the Fund. To the extent permitted by law, the Adviser may aggregate the securities to be sold or bought for the Fund with those to be sold or bought for other funds, investment portfolios, investment companies, or accounts in executing transactions.

See Investment Advisory and Other Services — Other Roles and Relationships of Ameriprise Financial and its Affiliates — Certain Conflicts of Interest for more information about these and other conflicts of interest.

Brokerage Commissions

The following tables describe the amounts of brokerage commissions paid by the Fund during its three most recently completed fiscal years. In certain instances the Fund may pay brokerage commissions to broker/dealers that are affiliates of Ameriprise Financial. As indicated above, all such transactions involving the payment of brokerage commissions to affiliates are done in compliance with Rule 17e-1 under the 1940 Act.

Aggregate Brokerage Commissions Paid by the Fund ^*


Fund	Fiscal Year Ended March 31, 2010	Fiscal Year Ended March 31, 2009		Fiscal Year Ended March 31, 2008
Short Term Bond Fund		$	10,309	$	8,123

^*	Differences, year to year, in the amount of brokerage commissions paid by a Fund (as disclosed in the table above) were primarily the result of increased market volatility as well as shareholder purchase and redemption activity in the Fund.

The Fund paid no brokerage commissions to affiliated broker/dealers for the three most recently completed fiscal years.

Directed Brokerage

The Fund or the Adviser, through an agreement or understanding with a broker/dealer, or otherwise through an internal allocation procedure, may direct, subject to applicable legal requirements, the Fund’s brokerage transactions to a broker/dealer because of the research services it provides the Fund or the Adviser.

During the fiscal year ended March 31, 2010, the Fund directed no brokerage transactions.

Securities of Regular Broker/Dealers

In certain cases, the Fund, as part of their principal investment strategies, or otherwise as a permissible investment, will invest in the common stock or debt obligations of the regular broker/dealers that the Adviser uses to transact brokerage for the Fund.

As of the fiscal year ended March 31, 2010, the Fund owned securities of its “regular brokers or dealers” or their parents, as defined in Rule 10b-1 under the 1940 Act, as shown in the table below.

Investments in Securities of Regular Broker/Dealers as of March 31, 2010


Fund	Broker/Dealer	Dollar Amount of Securities Held
Short Term Bond Fund

Additional Shareholder Servicing Payments

The Fund, along with the Transfer Agent and/or the Distributor, may pay significant amounts to financial intermediaries (as defined below), including other Ameriprise Financial affiliates, for providing the types of services that would typically be provided directly by a mutual fund’s transfer agent. The level of payments made to financial intermediaries may vary. A number of factors may be considered in determining payments to a financial intermediary, including, without limitation, the nature of the services provided to shareholders. These services may include sub-accounting, sub-transfer agency or similar recordkeeping services, shareholder or participant reporting, shareholder or participant transaction processing, and/or the provision of call center support (additional shareholder services). These payments for shareholder servicing support with respect to the Columbia Funds vary by financial intermediary. The Fund’s Transfer Agent, Distributor or their affiliates will pay, from its or their own resources, amounts to financial intermediaries in connection with the provision of these shareholder services and other services.

The Fund also may make additional payments to financial intermediaries that charge networking fees for certain services provided in connection with the maintenance of shareholder accounts through the NSCC.

In addition, the Distributor and other Ameriprise Financial affiliates may make lump sum payments to selected financial intermediaries receiving shareholder servicing payments in reimbursement of printing costs for literature for participants, account maintenance fees or fees for the establishment of the Fund on the financial intermediary’s system or other similar services.

As of the date of this SAI, the Distributor and other Ameriprise Financial affiliates had not agreed to make shareholder servicing payments to any financial intermediaries with respect to Class Y shares; however, the Distributor and/or other Ameriprise Financial affiliates have entered into such agreements with respect to other classes of shares of the Fund, and may enter into such agreements with respect to Class Y shares in the future without notice to Class Y shareholders. For more information relating to such agreements, see the Statement of Additional Information relating to the other classes of shares of the Fund.

Additional Financial Intermediary Payments

The Distributor and other Ameriprise Financial affiliates may pay compensation to selected financial intermediaries, including other Ameriprise Financial affiliates, under the categories described below. These categories are not mutually exclusive, and a single financial intermediary may receive payments under all categories. A financial intermediary also may receive payments described above in Brokerage Allocation and Other Practices — Additional Shareholder Servicing Payments . These payments may create an incentive for a financial intermediary or its representatives to recommend or offer shares of the Fund to its customers. The amount of payments made to financial intermediaries may vary. In determining the amount of payments to be made, the Distributor and other Ameriprise Financial affiliates may consider a number of factors, including, without limitation, asset mix and length or relationship with the financial intermediary, the size of the customer/shareholder base of the financial intermediary, the manner in which customers of the financial intermediary make investments in the Fund, the nature and scope of marketing support or services provided by the financial intermediary (as described more fully below) and the costs incurred by the financial intermediary in connection with maintaining the infrastructure necessary or desirable to support investments in the Fund.

These additional payments by the Distributor and other Ameriprise Financial affiliates are made pursuant to agreements between the Distributor and other Ameriprise Financial affiliates and financial intermediaries, and do not change the price paid by investors for the purchase of a Class Y share, the amount the Fund will receive as proceeds from such sales or the expenses paid by Class Y shares as shown under the heading Fees and Expenses of the Fund in the Fund’s Class Y shares prospectus.

Marketing Support Payments

The Distributor and the Adviser may make payments, from their own resources, to certain financial intermediaries, including other Ameriprise Financial affiliates, for marketing support services relating to the Columbia Funds, including, but not limited to, business planning assistance, educating financial intermediary personnel about the Fund and shareholder financial planning needs, placement on the financial intermediary’s preferred or recommended fund list or otherwise identifying the Fund as being part of a complex to be accorded a higher degree of marketing support than complexes not making such payments, access to sales meetings, sales representatives and management representatives of the financial intermediary, client servicing and systems infrastructure support. These payments are generally based upon one or more of the following factors: average net assets of the Columbia Funds distributed by the Distributor attributable to that financial intermediary, gross sales of the Columbia Funds distributed by the Distributor attributable to that financial intermediary, reimbursement of ticket charges (fees that a financial intermediary firm charges its representatives for effecting transactions in fund shares) or a negotiated lump sum payment.

While the financial arrangements vary for each financial intermediary, the marketing support payments with respect to the Columbia Funds to each financial intermediary generally are expected to be between 0.15% and 0.50% on an annual basis for payments based on average net assets of the Fund attributable to the financial intermediary. The Distributor and the Adviser may make payments in materially larger amounts or on a basis materially different from those described above when dealing with certain affiliates of Bank of America. Such increased payments to the Bank of America affiliates may enable the Bank of America affiliate to offset credits that it may provide to customers.

As of the date of this SAI, the Distributor and other Ameriprise Financial affiliates had not agreed to make marketing support payments to any financial intermediaries with respect to Class Y shares; however, the Distributor and/or other Ameriprise Financial affiliates have entered into such agreements with respect to other classes of shares of the Fund, and may enter into such agreements with respect to Class Y shares in the future without notice to Class Y shareholders. For more information relating to such agreements, see the Statement of Additional Information relating to the other classes of shares of the Fund.

Other Payments

From time to time, the Distributor, from its own resources, may provide additional compensation to certain financial intermediaries that sell or arrange for the sale of shares of the Fund to the extent not prohibited by laws or the rules of any self-regulatory agency, such as the Financial Industry Regulatory Authority (FINRA). Such compensation provided by the Distributor may include financial assistance to financial intermediaries that enable the Distributor to participate in and/or present at financial intermediary-sponsored conferences or seminars, sales or training programs for invited registered representatives and other financial intermediary employees, financial intermediary entertainment and other financial intermediary-sponsored events, and travel expenses, including lodging incurred by registered representatives and other employees in connection with prospecting, retention and due diligence trips. The Distributor makes payments for entertainment events it deems appropriate, subject to the Distributor’s internal guidelines and applicable law. These payments may vary depending upon the nature of the event.

Your financial intermediary may charge you fees or commissions in addition to those disclosed in this SAI. You should consult with your financial intermediary and review carefully any disclosure your financial intermediary provides regarding its services and compensation. Depending on the financial arrangement in place at any particular time, a financial intermediary and its financial consultants may have a financial incentive for recommending a particular Fund or a particular share class over other funds or share classes. See Investment Advisory and Other Services — Other Roles and Relationships of Ameriprise Financial and its Affiliates — Certain Conflicts of Interest for more information.

CAPITAL STOCK AND OTHER SECURITIES

Description of the Trust’s Shares

The Fund offers shares in the classes shown in the table below. Subject to certain limited exceptions discussed in the Fund’s prospectuses, the Fund may no longer be accepting new investments from current shareholders or prospective investors. Class B shares of the Fund are closed to new investments, except for certain limited transactions from existing investors in Class B shares. Additional Class B shares of the Fund will be issued only in connection with (i) reinvestment of dividends and/or capital gain distributions in Class B shares of the Fund by the Fund’s existing Class B shareholders and (ii) exchanges by shareholders invested in Class B shares of a Columbia Fund may exchange those shares for Class B shares of the Fund. The Fund, however, may at any time and without notice, offer any of these classes to the general public for investment.

The Trust’s Amended and Restated Declaration of Trust (Declaration of Trust) permits it to issue an unlimited number of full and fractional shares of beneficial interest of the Fund, without par value, and to divide or combine the shares of any series into a greater or lesser number of shares of the Fund without thereby changing the proportionate beneficial interests in the Fund and to divide such shares into classes. Each share of a class of the Fund represents an equal proportional interest in the Fund with each other share in the same class and is entitled to such distributions out of the income earned on the assets belonging to the Fund as are declared in the discretion of the Board. However, different share classes of the Fund pay different distribution amounts, because each share class has different expenses. Each time a distribution is made, the net asset value per share of the share class is reduced by the amount of the distribution.

Share Classes Offered by the Fund


Fund	Class A Shares	Class B Shares*	Class C Shares	Class Y Shares	Class Z Shares
Short Term Bond Fund	ü	ü	ü	ü	ü

Class B shares of the Fund are closed to new investments, except for certain limited transactions from existing investors in Class B shares. Additional Class B shares of the Fund will be issued only in connection with (i) reinvestment of dividends and/or capital gain distributions in Class B shares of the Fund by the Fund’s existing Class B shareholders and (ii) exchanges by shareholders invested in Class B shares of a Columbia Fund may exchange those shares for Class B shares of the Fund. See the prospectus for Class B shares of the Fund for details.

Restrictions on Holding or Disposing of Shares

There are no restrictions on the right of shareholders to retain or dispose of the Fund’s shares, other than the possible future termination of the Fund. The Fund may be terminated by reorganization into another mutual fund or by liquidation and distribution of its assets. Unless terminated by reorganization or liquidation, the Fund will continue indefinitely.

Shareholder Liability

The Trust is organized under Delaware law, which provides that shareholders of a statutory trust are entitled to the same limitations of personal liability as shareholders of a corporation organized under Delaware law. Effectively, this means that a shareholder of the Fund will not be personally liable for payment of the Fund’s debts except by reason of his or her own conduct or acts. In addition, a shareholder could incur a financial loss on account of the Fund’s obligation only if the Fund had no remaining assets with which to meet such obligation. We believe that the possibility of such a situation arising is extremely remote.

Dividend Rights

The shareholders of the Fund are entitled to receive any dividends or other distributions declared for the Fund. No shares have priority or preference over any other shares of the Fund with respect to distributions. Distributions will be made from the assets of the Fund, and will be paid pro rata to all shareholders of the Fund (or class) according to the number of shares of the Fund (or class) held by shareholders on the record date. The amount of income dividends per share may vary between separate share classes of the Fund based upon differences in the way that expenses are allocated between share classes pursuant to a multiple class plan.

Voting Rights and Shareholder Meetings

Shareholders have the power to vote only as expressly granted under the 1940 Act or under Delaware statutory trust law. Shareholders have no independent right to vote on any matter, including the creation, operation, dissolution or termination of the Trust. Shareholders have the right to vote on other matters only as the Board authorizes. Currently, the 1940 Act requires that shareholders have the right to vote, under certain circumstances, to: (i) elect Trustees; (ii) approve investment advisory agreements and principal underwriting agreements; (iii) approve a change in subclassification of the Fund; (iv) approve any change in fundamental investment policies; (v) approve a distribution plan under Rule 12b-1 under the 1940 Act; and (vi) to terminate the independent accountant.

With respect to matters that affect one class but not another, shareholders vote as a class; for example, the approval of a distribution plan applicable to that class. Subject to the foregoing, all shares of the Trust have equal voting rights and will be voted in the aggregate, and not by Fund, except where voting by Fund is required by law or where the matter involved only affects one Fund. For example, a change in the Fund’s fundamental investment policy affects only one Fund and would be voted upon only by shareholders of the Fund involved. Additionally, approval of an investment advisory agreement or investment subadvisory agreement, since it only affects one Fund, is a matter to be determined separately by the Fund. Approval by the shareholders of one Fund is effective as to that Fund whether or not sufficient votes are received from the shareholders of the other series to approve the proposal as to those Funds. Shareholders are entitled to one vote for each whole share held and a proportional fractional vote for each fractional vote held, on matters on which they are entitled to vote. Fund shareholders do not have cumulative voting rights. The Trust is not required to hold, and has no present intention of holding, annual meetings of shareholders.

Liquidation Rights

In the event of the liquidation or dissolution of the Trust or the Fund, shareholders of the Fund are entitled to receive the assets attributable to the relevant class of shares of the Fund that are available for distribution and to a distribution of any general assets not attributable to a particular investment portfolio that are available for distribution in such manner and on such basis as the Board may determine.

Preemptive Rights

There are no preemptive rights associated with Fund shares.

Conversion Rights

With the exception of Class B shares, which no longer accept investments from new or existing investors in Class B shares, except for certain limited transactions from existing investors in Class B shares as described in the prospectus for Class B shares of the Fund, shareholders have the right, which is subject to change by the Board, to convert or “exchange” shares of one class for another. Such right is outlined and subject to certain conditions set forth in the Fund’s prospectuses.

Redemptions

The Fund’s dividend, distribution and redemption policies can be found in its prospectuses under the headings Buying, Selling and Exchanging Shares and Distributions and Taxes . However, the Board may suspend the right of shareholders to sell shares when permitted or required to do so by law or compel sales of shares in certain cases.

Sinking Fund Provisions

The Trust has no sinking fund provisions.

Calls or Assessment

All Fund shares are issued in uncertificated form only and when issued will be fully paid and non-assessable by the Trust.

PURCHASE, REDEMPTION AND PRICING OF SHARES

Purchase and Redemption

An investor may buy, sell and exchange shares in the Fund utilizing the methods, and subject to the restrictions, described in the Fund’s prospectuses. The following information supplements information in the Fund’s prospectuses.

The Fund has authorized one or more broker/dealers to accept buy and sell orders on the Fund’s behalf. These broker/dealers are authorized to designate other intermediaries to accept buy and sell orders on the Fund’s behalf. The Fund will be deemed to have received a buy or sell order when an authorized broker/dealer, or, if applicable, a broker/dealer’s authorized designee, accepts the order. Customer orders will be priced at the Fund’s net asset value next computed after they are accepted by an authorized broker/dealer or the broker’s authorized designee.

The Trust also may make payment for sales in readily marketable securities or other property if it is appropriate to do so in light of the Trust’s responsibilities under the 1940 Act.

Under the 1940 Act, the Fund may suspend the right of redemption or postpone the date of payment for shares during any period when (i) trading on the NYSE is restricted by applicable rules and regulations of the SEC; (ii) the NYSE is closed for other than customary weekend and holiday closings; (iii) the SEC has by order permitted such suspension; (iv) an emergency exists as determined by the SEC. (The Fund may also suspend or postpone the recordation of the transfer of their shares upon the occurrence of any of the foregoing conditions).

The Trust has elected to be governed by Rule 18f-1 under the 1940 Act, as a result of which the Fund is obligated to redeem shares, subject to the exceptions listed above, with respect to any one shareholder during any 90-day period, solely in cash up to the lesser of $250,000 or 1% of the net asset value of the Fund at the beginning of the period.

Tax-Advantaged Retirement Plans (Retirement Plans)

The Transfer Agent maintains prototype tax-qualified plans, including Pension and Profit-Sharing Plans, for individuals, corporations, employees and the self-employed. The minimum initial Retirement Plan investment is $1,000, applied at the plan level. BANA is the custodian/trustee and plan sponsor of the Columbia Management prototype plans offered through the Distributor. In general a $20 annual fee is charged.

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

Front-End Sales Charge Waivers

The investors listed below can buy Class A shares or Class T shares without paying a front-end sales charge.

•

Employees of Ameriprise Financial (and its predecessors), its affiliates and subsidiaries.

•

Trustees of funds advised or administered by the Adviser.

•

Directors, officers and employees of the Adviser, the Distributor, and their respective successors, any investment subadviser and companies affiliated with the Adviser.

•

Insurance company separate accounts for the benefit of group retirement plans.

•

Registered representatives and employees of selling and servicing agents (including their affiliates) that are parties to dealer agreements or other sales arrangements with the Distributor.

•

Broker/dealers if purchases are in accordance with the internal policies and procedures of the employing broker/dealer and made for their own investment purposes.

•

Employees or partners of any service provider to the Columbia Funds.

•

Families of the parties listed above and their beneficial accounts. Family members include: spouses, parents, stepparents, legal guardians, children, stepchildren, fathers-in-law and mothers-in-law.

•

Registered broker/dealer firms that have entered into a dealer agreement with the Distributor may buy Class A shares without paying a front-end sales charge for their investment account only.

•

Banks, trust companies and thrift institutions, acting as fiduciaries.

•

Class A, Class E and Class T shares (Class E shares and Class T shares are not currently open to new investors) of certain funds may also be bought at reduced or no sales charge by clients of dealers, brokers or registered investment advisors that have entered into arrangements with the Distributor pursuant to which the funds are included as investment options in wrap fee accounts, other managed agency/asset allocation accounts or programs involving fee-based compensation arrangements, and by participants in certain retirement plans.

•

Certain pension, profit-sharing or other employee benefit plans offered to non-U.S. investors.

•

sales proceeds. In addition, shareholders of the money market fund series of BofA Funds Series Trust, which were formerly referred to as the Columbia Money Market Funds (the Former Columbia Money Market Funds), can also buy Class A shares of the Columbia Funds without paying a sales charge if the purchase is made from the proceeds of a sale of shares from a Former Columbia Money Market Fund within 365 days, up to the amount of the sales proceeds, provided that the proceeds are from the sale of shares of a Former Columbia Money Market Fund purchased on or before April 30, 2010. To be eligible for these reinstatement privileges the purchase must be made into an account for the same owner, but does not need to be into the same Columbia Fund from which the shares were sold. The Transfer Agent, Distributor or their agents must receive a written reinstatement request within 365 days after the shares are sold and the purchase of Class A shares through this reinstatement privilege will be made at the NAV of such shares next calculated after the request is received in good order.

Contingent Deferred Sales Charge Waivers (Class A, Class B and Class C Shares)

Shareholders won’t pay a CDSC in the following circumstances:

Health savings accounts: CDSCs may be waived on shares sold by health savings accounts sponsored by third party platforms, including those sponsored by Ameriprise Financial affiliates.

Qualified retirement plans: CDSCs may be waived on shares (except for Class B shares) sold by certain group retirement plans held in omnibus accounts.

Loans from qualified retirement plans: CDSCs may be waived on shares sold in connection with loans from qualified retirement plans to shareholders.

Plans of reorganization: At the Fund’s discretion, CDSCs may be waived for shares issued in connection with plans of reorganization, such as mergers, asset acquisitions and exchange offers, to which the Fund is a party.

Anti-Money Laundering Compliance

The Fund is required to comply with various anti-money laundering laws and regulations. Consequently, the Fund may request additional required information from you to verify your identity. Your application will be rejected if it does not contain your name, social security number, date of birth and permanent street address. If at any time the Fund believes a shareholder may be involved in suspicious activity or if certain account information matches information on government lists of suspicious persons, the Fund may choose not to establish a new account or may be required to “freeze” a shareholder’s account. The Fund also may be required to provide a governmental agency with information about transactions that have occurred in a shareholder’s account or to transfer monies received to establish a new account, transfer an existing account or transfer the proceeds of an existing account to a governmental agency. In some circumstances, the law may not permit the Fund to inform the shareholder that it has taken the actions described above.

Offering Price

The share price of the Fund is based on the Fund’s net asset value per share, which is calculated separately for each class of shares as of the close of regular trading on the NYSE (which is usually 4:00 p.m. Eastern time unless the NYSE closes earlier) on each day the Fund is open for business, unless the Board determines otherwise.

The value of the Fund’s portfolio securities for which a market quotation is available is determined in accordance with the Trust’s valuation procedures. In general terms, the valuation procedures provide that domestic exchange traded securities (other than NASDAQ listed equity securities) generally will be valued at their last traded sale prices as reported on the principal exchange where those securities are traded. If no sales of those securities are reported on a particular day on the principal exchange, the securities generally will be valued at the mean between the latest bid and asked prices as reported on the principal exchange where those securities are traded. Securities traded on a foreign securities exchange will generally be valued at their last sale prices on the exchange where the securities are primarily traded, or in the absence of a reported sale on a particular day, at their bid prices (in the case of securities held long) or ask prices (in the case of securities held short) as reported by that exchange. Securities traded primarily on NASDAQ will generally be valued at the NASDAQ Official Closing Price (NOCP) (which is the last trade price at or before 4:00:02 p.m. (Eastern Time) adjusted up to NASDAQ’s best bid price if the last trade price is below such bid price or adjusted down to NASDAQ’s best ask price if the last trade price is above such ask price). If no NOCP is available, the security will generally be valued at the last sale price shown on NASDAQ prior to the calculation of the NAV of the Fund. If no sale price is

shown on NASDAQ, the latest bid price will be used. If no sale price is shown and no latest bid price is available, the price will be deemed “stale” and the value will be determined in accordance with the Fund’s fair valuation procedures.

Over-the-counter derivatives will generally be valued at fair value in accordance with the Fund’s fair valuation procedures.

Shares of open-end investment companies held in the Fund’s portfolio will generally be valued at the latest net asset value reported by the investment company.

TAXATION

The following information supplements and should be read in conjunction with the section in the Fund’s prospectuses entitled Distributions and Taxes . The prospectuses generally describe the U.S. federal income tax treatment of distributions by the Fund. This section of the SAI provides additional information concerning U.S. federal income taxes. It is based on the Code, applicable Treasury Regulations, judicial authority, and administrative rulings and practice, all as in effect as of the date of this SAI and all of which are subject to change, including changes with retroactive effect. Except as specifically set forth below, the following discussion does not address any state, local or foreign tax matters.

The Trust has not requested and will not request an advance ruling from the IRS as to the U.S. federal income tax matters described below. The IRS could adopt positions contrary to those discussed below and such positions could be sustained. In addition, the following discussion and the discussions in the prospectuses applicable to each shareholder address only some of the U.S. federal income tax considerations generally affecting investments in the Fund. Prospective shareholders are urged to consult with their own tax advisors and financial planners regarding the U.S. federal tax consequences of an investment in the Fund, the application of state, local, or foreign laws, and the effect of any possible changes in applicable tax laws on their investment in the Fund.

Qualification as a Regulated Investment Company

It is intended that the Fund qualify as a “regulated investment company” under Subchapter M of Subtitle A, Chapter 1 of the Code. The Fund will be treated as a separate entity for U.S. federal income tax purposes. Thus, the provisions of the Code applicable to regulated investment companies generally will apply separately to the Fund, even though the Fund is a series of the Trust. Furthermore, the Fund will separately determine its income, gains, losses, and expenses for U.S. federal income tax purposes.

In order to qualify for the special tax treatment accorded regulated investment companies and their shareholders, the Fund must, among other things, derive at least 90% of its gross income each taxable year generally from (i) dividends, interest, certain payments with respect to securities loans, gains from the sale or other disposition of stock, securities or foreign currencies, or other income attributable to its business of investing in such stock, securities or foreign currencies (including, but not limited to, gains from options, futures or forward contracts) and (ii) net income derived from an interest in a qualified publicly traded partnership, as defined below. In general, for purposes of this 90% gross income requirement, income derived from a partnership (other than a qualified publicly traded partnership) will be treated as qualifying income only to the extent such income is attributable to items of income of the partnership which would be qualifying income if realized by the regulated investment company. However, 100% of the net income derived from an interest in a qualified publicly traded partnership (defined as a partnership (x) the interests in which are traded on an established securities market or readily tradable on a secondary market or the substantial equivalent thereof, (y) that derives at least 90% of its income from the passive income sources defined in Code Section 7704(d), and (z) that derives less than 90% of its income from the qualifying income described in clause (i) above) will be treated as qualifying income. Certain of the Fund’s investments in master limited partnerships (MLPs) may qualify as interests in qualified publicly traded partnerships. In addition, although in general the passive loss rules do not apply to a regulated investment company, such rules do apply to a regulated investment company with respect to items attributable to an interest in a qualified publicly traded partnership.

The Fund must also diversify its holdings so that, at the end of each quarter of the Fund’s taxable year: (i) at least 50% of the fair market value of its assets consists of (A) cash and cash items (including receivables), U.S. Government securities and securities of other regulated investment companies, and (B) securities of any one issuer (other than those described in clause (A)) to the extent such securities do not exceed 5% of the value of the Fund’s total assets and are not more than 10% of the outstanding voting securities of such issuer, and (ii) not more than 25% of the value of the Fund’s total assets consists of the securities of any one issuer (other than those described in clause (i)(A)), the securities (other than the Securities of other regulated investment companies) of two or more issuers the Fund controls and which are engaged in the same, similar, or related trades or businesses, or the securities of one or more qualified publicly traded partnerships. In addition, for purposes of meeting this diversification requirement, the term “outstanding voting securities of such issuer” includes the equity securities of a qualified publicly traded partnership and in the case of the Fund’s investments in loan participations, the Fund shall treat both the financial intermediary and the issuer of the underlying loan as an issuer. The qualifying income and diversification requirements described above may limit the extent to which the Fund can engage in certain derivative transactions, as well as the extent to which it can invest in MLPs.

In addition, the Fund generally must distribute to its shareholders at least 90% of its investment company taxable income for the taxable year, which generally includes its ordinary income and the excess of any net short-term capital gain over net long-term capital loss, and at least 90% of its net tax-exempt interest income (if any) for the taxable year.

If the Fund qualifies as a regulated investment company that is accorded special tax treatment, it generally will not be subject to U.S. federal income tax on any of the investment company taxable income and net capital gain (i.e., the excess of net long-term capital gain over net short-term capital loss) it distributes to its shareholders (including Capital Gain Dividends as defined below). The Fund generally intends to distribute at least annually substantially all of its investment company taxable income (computed without regard to the dividends-paid deduction) and substantially all of its net capital gain. However, no assurance can be given that the Fund will not be subject to U.S. federal income taxation. Any investment company taxable income retained by the Fund will be subject to tax at regular corporate rates.

In addition, although the Fund generally intends to distribute all of its net capital gain, the Fund may determine to retain for investment all or a portion of its net capital gain. If the Fund retains any net capital gain, it will be subject to a tax at regular corporate rates on the amount retained, but may designate the retained amount as undistributed capital gains in a notice to its shareholders, who (i) will be required to include in income for U.S. federal income tax purposes, as long-term capital gain, their shares of such undistributed amount, and (ii) will be entitled to credit their proportionate shares of the tax paid by the Fund on such undistributed amount against their U.S. federal income tax liabilities, if any, and to claim refunds to the extent the credit exceeds such liabilities. For U.S. federal income tax purposes, the tax basis of shares owned by a shareholder of the Fund will be increased by an amount equal under current law to the difference between the amount of undistributed capital gains included in the shareholder’s gross income under clause (i) of the preceding sentence and the tax deemed paid by the shareholder under clause (ii) of the preceding sentence.

In order to comply with the distribution requirements described above applicable to regulated investment companies, the Fund generally must make the distributions in the same taxable year that it realizes the income and gain, although in certain circumstances, the Fund may make the distributions in the following taxable year in respect of income and gains from the prior taxable year. Shareholders generally are taxed on any distributions

from the Fund in the year they are actually distributed. If the Fund declares a distribution to shareholders of record in October, November or December of one calendar year and pays the distribution by January 31 of the following calendar year, however, the Fund and its shareholders will be treated as if the Fund paid the distribution by December 31 of the earlier year.

If, for any taxable year, the Fund fails to qualify as a regulated investment company accorded special tax treatment under the Code, it will be taxed in the same manner as an ordinary corporation without any deduction for its distributions to shareholders, and all distributions from the Fund’s current and accumulated earnings and profits (including any distributions of its net tax-exempt income and net long-term capital gains) to its shareholders will be taxable to shareholders as dividend income. In addition, the Fund could be required to recognize unrealized gains, pay substantial taxes and interest and make substantial distributions before requalifying as a regulated investment company.

Excise Tax

If the Fund fails to distribute by December 31 of each calendar year at least 98% of its ordinary income for the year (excluding capital gains and losses), at least 98% of its capital gain net income (adjusted for net ordinary losses) for the 1-year period ending on October 31 of that year, and any of its ordinary income and capital gain net income from previous years that were not distributed during such years, the Fund will be subject to a nondeductible 4% excise tax on the undistributed amounts. For these purposes, the Fund will be treated as having distributed any amount on which it has been subject to corporate income tax in the taxable year ending within the calendar year. The Fund generally intends to actually distribute or be deemed to have distributed substantially all of its ordinary income and capital gain net income, if any, by the end of each calendar year and, thus, expects not to be subject to the excise tax. However, no assurance can be given that the Fund will not be subject to the excise tax. Moreover, the Fund reserves the right to pay an excise tax rather than make an additional distribution when circumstances warrant (for example, if the amount of excise tax to be paid is deemed de minimis by the Fund).

Capital Loss Carryforwards

Subject to certain limitations, the Fund is permitted to carry forward a net capital loss from any year to offset its capital gains, if any, realized during the eight years following the year of the loss. The Fund’s capital loss carryforward is treated as a short-term capital loss in the year to which it is carried. If future capital gains are offset by carried forward capital losses, such future capital gains are not subject to fund-level U.S. federal income taxation, regardless of whether they are distributed to shareholders. Accordingly, the Fund does not expect to distribute any such offsetting capital gains. The Fund cannot carry back or carry forward any net operating losses.

Equalization Accounting

The Fund may use the so-called “equalization method” of accounting to allocate a portion of its “accumulated earnings and profits,” which generally equals the Fund’s undistributed net investment income and realized capital gains, with certain adjustments, to redemption proceeds. This method permits the Fund to achieve more balanced distributions for both continuing and redeeming shareholders. Although using this method generally will not affect the Fund’s total returns, it may reduce the amount of income and gains that the Fund would otherwise distribute to continuing shareholders by reducing the effect of redemptions of Fund shares on Fund distributions to shareholders. The IRS has not sanctioned the particular equalization method used by the Fund, and thus the Fund’s use of this method may be subject to IRS scrutiny.

Taxation of Fund Investments

In general, realized gains or losses on the sale of securities held by the Fund will be treated as capital gains or losses, and long-term capital gains or losses if the Fund has held or is deemed to have held the securities for more than one year at the time of disposition.

If the Fund purchases a debt obligation with original issue discount (OID) (generally a debt obligation with an issue price less than its stated principal amount, such as a zero-coupon bond), the Fund may be required to annually include in its income a portion of the OID as ordinary income, even though the Fund will not receive cash payments for such discount until maturity or disposition of the obligation. Inflation-protected bonds generally can be expected to produce OID income as their principal amounts are adjusted upward for inflation. In general, gains recognized on the disposition of (or the receipt of any partial payment of principal on) a debt obligation (including a municipal obligation) purchased by the Fund at a market discount, generally at a price less than its principal amount, will be treated as ordinary income to the extent of the portion of market discount which accrued, but was not previously recognized pursuant to an available election, during the term that the Fund held the debt obligation. The Fund generally will be required to make distributions to shareholders representing the OID or market discount (if an election is made by the Fund to accrue market discount over the holding period of the applicable debt obligation) on debt securities that is currently includible in income, even though the cash representing such income may not have been received by the Fund. Cash to pay such distributions may be obtained from borrowing or from sales proceeds of securities held by the Fund which the Fund otherwise might have continued to hold; obtaining such cash might be disadvantageous for the Fund.

In addition, payment-in-kind securities similarly will give rise to income which is required to be distributed and is taxable even though the Fund receives no cash interest payment on the security during the year. A portion of the interest paid or accrued on certain high-yield discount obligations (such as high-yield corporate debt securities) may not (and interest paid on debt obligations owned by the Fund that are considered for tax purposes to be payable in the equity of the issuer or a related party will not) be deductible to the issuer, possibly affecting the cash flow of the issuer.

If the Fund invests in debt obligations that are in the lowest rating categories or are unrated, including debt obligations of issuers not currently paying interest or who are in default, special tax issues may exist for the Fund. Tax rules are not entirely clear about issues such as whether the Fund should recognize market discount on a debt obligation and, if so, the amount of market discount the Fund should recognize, when the Fund may cease to accrue interest, OID or market discount, when and to what extent deductions may be taken for bad debts or worthless securities and how payments received on obligations in default should be allocated between principal and income. These and other related issues will be addressed by the Fund when, as and if it invests in such securities, to ensure that it distributes sufficient income to preserve its status as a regulated investment company and does not become subject to U.S. federal income or excise tax.

If an option granted by the Fund is sold, lapses or is otherwise terminated through a closing transaction, such as a repurchase by the Fund of the option from its holder, the Fund generally will realize a short-term capital gain or loss, depending on whether the premium income is greater or less than the amount paid by the Fund in the closing transaction. Some capital losses realized by the Fund in the sale, exchange, exercise or other disposition of an option may be deferred if they result from a position that is part of a “straddle,” discussed below. If securities are sold by the Fund pursuant to the exercise of a covered call option granted by it, the Fund generally will add the premium received to the sale price of the securities delivered in determining the amount of gain or loss on the sale. If securities are purchased by the Fund pursuant to the exercise of a put option written by it, the Fund generally will subtract the premium received from its cost basis in the securities purchased.

Some regulated futures contracts, certain foreign currency contracts, and non-equity, listed options that may be used by the Fund will be deemed “Section 1256 contracts.” The Fund will be required to “mark to market” any such contracts held at the end of the taxable year by treating them as if they had been sold on the last day of that year at market value. Sixty percent of any net gain or loss realized on all dispositions of Section 1256 contracts, including deemed dispositions under the “mark-to-market” rule, generally will be treated as long-term capital gain or loss, and the remaining 40% will be treated as short-term capital gain or loss, although certain foreign currency gains and losses from such contracts may be treated as ordinary income or loss as described below. These provisions may require the Fund to recognize income or gains without a concurrent receipt of cash. Transactions that qualify as designated hedges are exempt from the mark-to-market rule and the “60%/40%” rule

and may require the Fund to defer the recognition of losses on certain futures contracts, foreign currency contracts, and non-equity options.

Foreign exchange gains and losses realized by the Fund in connection with certain transactions involving foreign currency-denominated debt securities, certain options, futures contracts, forward contracts and similar instruments relating to foreign currency, foreign currencies, or payables or receivables denominated in a foreign currency are subject to Section 988 of the Code, which generally causes such gains and losses to be treated as ordinary income or loss and may affect the amount and timing of recognition of the Fund’s income. Under future Treasury Regulations, any such transactions that are not directly related to the Fund’s investments in stock or securities (or its options contracts or futures contracts with respect to stock or securities) may have to be limited in order to enable the Fund to satisfy the 90% qualifying income test described above. If the net foreign exchange loss exceeds the Fund’s net investment company taxable income (computed without regard to such loss) for a taxable year, the resulting ordinary loss for such year will not be available as a carryforward and thus cannot be deducted by the Fund or its shareholders in future years.

Offsetting positions held by the Fund involving certain derivative instruments, such as forwards, futures and options contracts, may be considered, for U.S. federal income tax purposes, to constitute “straddles.” “Straddles” are defined to include “offsetting positions” in actively traded personal property. The tax treatment of “straddles” is governed by Section 1092 of the Code which, in certain circumstances, overrides or modifies the provisions of Section 1256. If the Fund is treated as entering into a “straddle” and at least one (but not all) of the Fund’s positions in derivative contracts comprising a part of such straddle is governed by Section 1256 of the Code, described above, then such straddle could be characterized as a “mixed straddle.” The Fund may make one or more elections with respect to “mixed straddles.” Depending upon which election is made, if any, the results with respect to the Fund may differ. Generally, to the extent the straddle rules apply to positions established by the Fund, losses realized by the Fund may be deferred to the extent of unrealized gain in any offsetting positions. Moreover, as a result of the straddle rules, short-term capital loss on straddle positions may be recharacterized as long-term capital loss, and long-term capital gain may be characterized as short-term capital gain. In addition, the existence of a straddle may affect the holding period of the offsetting positions. As a result, the straddle rules could cause distributions that would otherwise constitute “qualified dividend income” or qualify for the dividends-received deduction to fail to satisfy the applicable holding period requirements (as described below). Furthermore, the Fund may be required to capitalize, rather than deduct currently, any interest expense and carrying charges applicable to a position that is part of a straddle, including any interest on indebtedness incurred or continued to purchase or carry any positions that are part of a straddle. The application of the straddle rules to certain offsetting Fund positions can therefore affect the amount, timing, and character of distributions to shareholders, and may result in significant differences from the amount, timing and character of distributions that would have been made by the Fund if it had not entered into offsetting positions in respect of certain of its portfolio securities.

If the Fund enters into a “constructive sale” of any appreciated financial position in stock, a partnership interest, or certain debt instruments, the Fund will be treated as if it had sold and immediately repurchased the property and must recognize gain (but not loss) with respect to that position. A constructive sale of an appreciated financial position occurs when the Fund enters into certain offsetting transactions with respect to the same or substantially identical property, including, but not limited to: (i) a short sale; (ii) an offsetting notional principal contract; (iii) a futures or forward contract; or (iv) other transactions identified in future Treasury Regulations. The character of the gain from constructive sales will depend upon the Fund’s holding period in the appreciated financial position. Losses realized from a sale of a position that was previously the subject of a constructive sale will be recognized when the position is subsequently disposed of. The character of such losses will depend upon the Fund’s holding period in the position beginning with the date the constructive sale was deemed to have occurred and the application of various loss deferral provisions in the Code. Constructive sale treatment does not apply to certain closed transactions, including if such a transaction is closed on or before the 30th day after the close of the Fund’s taxable year and the Fund holds the appreciated financial position unhedged throughout the 60-day period beginning with the day such transaction was closed.

The amount of long-term capital gain the Fund may recognize from certain derivative transactions with respect to interests in certain pass-through entities is limited under the Code’s constructive ownership rules. The amount of long-term capital gain is limited to the amount of such gain the Fund would have had if the Fund directly invested in the pass-through entity during the term of the derivative contract. Any gain in excess of this amount is treated as ordinary income. An interest charge is imposed on the amount of gain that is treated as ordinary income.

In addition, the Fund’s transactions in securities and certain types of derivatives (e.g., options, futures contracts, forward contracts and swap agreements) may be subject to other special tax rules, such as the wash-sale rules or the short-sale rules, the effect of which may be to accelerate income to the Fund, defer losses to the Fund, cause adjustments in the holding periods of the Fund’s securities, convert long-term capital gains into short-term capital gains, and/or convert short-term capital losses into long-term capital losses. These rules could therefore affect the amount, timing and character of distributions to shareholders.

Certain of the Fund’s hedging activities (including its transactions, if any, in foreign currencies or foreign currency-denominated instruments) are likely to produce a difference between its book income and its taxable income. If the Fund’s book income exceeds the sum of its taxable income and net tax-exempt income (if any), the distribution (if any) of such excess generally will be treated as (i) a dividend to the extent of the Fund’s remaining earnings and profits (including earnings and profits arising from tax exempt income), (ii) thereafter, as a return of capital to the extent of the recipient’s basis in its shares, and (iii) thereafter, as gain from the sale or exchange of a capital asset. If the Fund’s book income is less than the sum of its taxable income and net-exempt income (if any), the Fund could be required to make distributions exceeding book income to qualify as a regulated investment company that is accorded special tax treatment.

Rules governing the U.S. federal income tax aspects of derivatives, including swap agreements, are in a developing stage and are not entirely clear in certain respects. Accordingly, while the Fund intends to account for such transactions in a manner it deems to be appropriate, an adverse determination or future guidance by the IRS with respect to these rules (which determination or guidance could be retroactive) may affect whether the Fund has made sufficient distributions, and otherwise satisfied the relevant requirements to maintain its qualification as a regulated investment company and avoid fund-level tax. Certain requirements that must be met under the Code in order for the Fund to qualify as a regulated investment company may limit the extent to which the Fund will be able to engage in derivatives transactions.

Any investment by the Fund in REIT equity securities may result in the Fund’s receipt of cash in excess of the REIT’s earnings; if the Fund distributes these amounts, these distributions could constitute a return of capital to Fund shareholders for U.S. federal income tax purposes. Investments in REIT equity securities also may require the Fund to accrue and distribute income not yet received. To generate sufficient cash to make the requisite distributions, the Fund may be required to sell securities in its portfolio (including when it is not advantageous to do so) that it otherwise would have continued to hold. Dividends received by the Fund from a REIT generally will not constitute qualified dividend income and will not qualify for the dividends-received deduction.

The Fund may invest directly or indirectly in residual interests in REMICs or equity interests in taxable mortgage pools (TMPs). Under an IRS notice, and Treasury Regulations that have yet to be issued but may apply retroactively, a portion of the Fund’s income (including income allocated to the Fund from a REIT or other pass-through entity) that is attributable to a residual interest in a REMIC or an equity interest in a TMP (referred to in the Code as an “excess inclusion”) will be subject to U.S. federal income tax in all events. This notice also

provides, and the regulations are expected to provide, that excess inclusion income of a regulated investment company, such as the Fund, will be allocated to shareholders of the regulated investment company in proportion to the dividends received by such shareholders, with the same consequences as if the shareholders held the related interest directly. As a result, the Fund may not be a suitable investment for certain tax-exempt shareholders, as noted under Tax-Exempt Shareholders below.

Some amounts received by the Fund from its investments in MLPs will likely be treated as returns of capital because of accelerated deductions available with respect to the activities of MLPs. On the disposition of an investment in such an MLP, the Fund will likely realize taxable income in excess of economic gain from that asset (or if the Fund does not dispose of the MLP, the Fund will likely realize taxable income in excess of cash flow received by the Fund from the MLP in a later period), and the Fund must take such income into account in determining whether the Fund has satisfied the regulated investment company distribution requirements. The Fund may have to borrow or liquidate securities to satisfy its distribution requirements and meet its redemption requests, even though investment considerations might otherwise make it undesirable for the Fund to borrow money or to sell securities at the time. In addition, distributions attributable to gain from the sale of MLPs that are characterized as ordinary income under the Code’s recapture provisions will be taxable to Fund shareholders as ordinary income.

“Passive foreign investment companies” (PFICs) are generally defined as foreign corporations where at least 75% of their gross income for their taxable year is income from passive sources (such as interest, dividends, certain rents and royalties, or certain capital gains) or at least 50% of their assets on average produce such passive income. If the Fund acquires any equity interest in a PFIC, the Fund could be subject to U.S. federal income tax and interest charges on “excess distributions” received from the PFIC or on gain from the sale of such equity interest in the PFIC, even if all income or gain actually received by the Fund is timely distributed to its shareholders. Excess distributions and gain from the sale of interests in PFICs may be characterized as ordinary income even though, absent the application of PFIC rules, some excess distributions and gain may have been classified as capital gain.

The Fund will not be permitted to pass through to its shareholders any credit or deduction for these special taxes and interest charges incurred with respect to a PFIC. Elections may be available that would ameliorate these adverse tax consequences, but such elections would require the Fund to include its share of the PFIC’s income and net capital gains annually, regardless of whether it receives any distribution from the PFIC (in the case of a “QEF election”), or to mark the gains (and to a limited extent losses) in its interests in the PFIC “to the market” as though the Fund had sold and repurchased such interests on the last day of the Fund’s taxable year, treating such gains and losses as ordinary income and loss (in the case of a “mark-to-market election”). The QEF and mark-to-market elections may require the Fund to recognize taxable income or gain without the concurrent receipt of cash and increase the amount required to be distributed by the Fund to avoid taxation. Making either of these elections therefore may require the Fund to liquidate other investments prematurely to meet the minimum distribution requirements described above, which also may accelerate the recognition of gain and adversely affect the Fund’s total return. The Fund may attempt to limit and/or manage its holdings in PFICs to minimize tax liability and/or maximize returns from these investments but there can be no assurance that it will be able to do so. Moreover, because it is not always possible to identify a foreign corporation as a PFIC in advance of acquiring shares in the corporation, the Fund may incur the tax and interest charges described above in some instances. Dividends paid by PFICs will not be eligible to be treated as qualified dividend income, as defined below.

In addition to the investments described above, prospective shareholders should be aware that other investments made by the Fund may involve complex tax rules that may result in income or gain recognition by the Fund without corresponding current cash receipts. Although the Fund seeks to avoid significant noncash income, such noncash income could be recognized by the Fund, in which case the Fund may distribute cash derived from other sources in order to meet the minimum distribution requirements described above. In this regard, the Fund could be required at times to liquidate investments prematurely in order to satisfy its minimum distribution requirements, which may accelerate the recognition of gain and adversely affect the Fund’s total return.

Taxation of Distributions

Distributions paid out of the Fund’s current and accumulated earnings and profits, whether paid in cash or reinvested in the Fund, generally are deemed to be taxable distributions and must be reported by each shareholder who is required to file a U.S. federal income tax return. Dividends and distributions on the Fund’s shares are generally subject to U.S. federal income tax as described herein to the extent they do not exceed the Fund’s realized income and gains, even though such dividends and distributions may economically represent a return of a particular shareholder’s investment. Such distributions are likely to occur in respect of shares purchased at a time when the Fund’s net asset value reflects either unrealized gains, or realized but undistributed income or gains. Such realized income and gains may be required to be distributed even when the Fund’s net asset value also reflects unrealized losses. For U.S. federal income tax purposes, the Fund’s earnings and profits, described above, are determined at the end of the Fund’s taxable year and are allocated pro rata to distributions paid over the entire year. Distributions in excess of the Fund’s current and accumulated earnings and profits will first be treated as a return of capital up to the amount of a shareholder’s tax basis in his or her Fund shares and then as capital gain. A return of capital is not taxable, but it reduces a shareholder’s tax basis in his or her Fund shares, thus reducing any loss or increasing any gain on a subsequent taxable disposition by the shareholder of his or her shares. The Fund may make distributions in excess of its earnings and profits to a limited extent, from time to time.

For U.S. federal income tax purposes, distributions of investment income are generally taxable as ordinary income, and distributions of gains from the sale of investments that the Fund owned (or is deemed to have owned) for one year or less will be taxable as ordinary income. Distributions properly designated by the Fund as capital gain dividends (Capital Gain Dividends) will be taxable to shareholders as long-term capital gain (to the extent such distributions do not exceed the Fund’s actual net long-term capital gain for the taxable year), regardless of how long a shareholder has held Fund shares, and do not qualify as dividends for purposes of the dividends-received deduction or as qualified dividend income (defined below). The Fund will designate Capital Gain Dividends, if any, in a written notice mailed by the Fund to its shareholders not later than 60 days after the close of the Fund’s taxable year.

Some states will not tax distributions made to individual shareholders that are attributable to interest the Fund earned on direct obligations of the U.S. Government if the Fund meets the state’s minimum investment or reporting requirements, if any. Investments in GNMA or FNMA securities, bankers’ acceptances, commercial paper, and repurchase agreements collateralized by U.S. Government securities generally do not qualify for tax-free treatment. This exemption may not apply to corporate shareholders.

Sales and Exchanges of Fund Shares

purchase of shares of the Fund or a different regulated investment company, the sales charge previously incurred in acquiring the Fund’s shares generally shall not be taken into account (to the extent the previous sales charges do not exceed the reduction in sales charges on the new purchase) for the purpose of determining the amount of gain or loss on the disposition, but generally will be treated as having been incurred in the new purchase. Also, if a shareholder realizes a loss on a disposition of Fund shares, the loss will be disallowed under “wash sale” rules to the extent that he or she purchases substantially identical shares within the 61-day period beginning 30 days before and ending 30 days after the disposition. Any disallowed loss generally will be reflected in an adjustment to the tax basis of the purchased shares.

Foreign Taxes

Amounts realized by the Fund from sources within foreign countries may be subject to withholding and other taxes imposed by such countries. Tax conventions between certain countries and the United States may reduce or eliminate such taxes. If more than 50% of the value of the Fund’s total assets at the close of its taxable year consists of securities of foreign corporations, the Fund will be eligible to file an annual election with the IRS pursuant to which the Fund may pass through to its shareholders on a pro rata basis foreign income and similar taxes paid by the Fund with respect to foreign securities that the Fund has held for at least the minimum holding periods specified in the Code and such taxes may be claimed, subject to certain limitations, either as a tax credit or deduction by the shareholders. It is not expected that the Fund will qualify for this election.

U.S. Federal Income Tax Rates

As of the date of this SAI, the maximum stated U.S. federal income tax rate applicable to individuals generally is 35% for ordinary income and 15% for net long-term capital gain.

Current U.S. federal income tax law also provides for a maximum individual U.S. federal income tax rate applicable to “qualified dividend income” equal to the highest net long-term capital gains rate, which generally is 15%. In general, “qualified dividend income” is income attributable to dividends received by the Fund in taxable years beginning on or before December 31, 2010 from certain domestic and foreign corporations, as long as certain holding period and other requirements are met by the Fund with respect to the dividend-paying corporation’s stock and by the shareholders with respect to the Fund’s shares. If 95% or more of the Fund’s gross income (excluding net long-term capital gain over net short-term capital loss) constitutes qualified dividend income, all of its distributions (other than Capital Gain Dividends) will be generally treated as qualified dividend income in the hands of individual shareholders, as long as they have owned their Fund shares for at least 61 days during the 121-day period beginning 60 days before the Fund’s ex-dividend date (or, in the case of certain preferred stock, 91 days during the 181-day period beginning 90 days before such date) and meet certain other requirements specified in the Code. In general, if less than 95% of the Fund’s income is attributable to qualified dividend income, then only the portion of the Fund’s distributions that is attributable to qualified dividend income and designated as such in a timely manner will be so treated in the hands of individual shareholders who meet the aforementioned holding period requirements. The rules regarding the qualification of Fund distributions as qualified dividend income are complex, including the holding period requirements. Individual Fund shareholders therefore are urged to consult their own tax advisors and financial planners.

federal income tax rates are set to increase in future years under various “sunset” provisions of U.S. federal income tax laws.

Backup Withholding

The Fund generally is required to withhold, and remit to the U.S. Treasury, subject to certain exemptions, an amount equal to 28% of all distributions and redemption proceeds (including proceeds from exchanges and redemptions in-kind) paid or credited to a Fund shareholder if (1) the shareholder fails to furnish the Fund with a correct “taxpayer identification number” (TIN) or has not certified to the Fund that withholding does not apply or (2) the IRS notifies the Fund that the shareholder’s TIN is incorrect or the shareholder is otherwise subject to backup withholding. This backup withholding is not an additional tax imposed on the shareholder. The shareholder may apply amounts required to be withheld as a credit against his or her future U.S. federal income tax liability, provided that the required information is furnished to the IRS. If a shareholder fails to furnish a valid TIN upon request, the shareholder can also be subject to IRS penalties. The rate of backup withholding is set to increase for amounts distributed or paid after December 31, 2010.

Tax-Deferred Plans

The shares of the Fund may be available for a variety of tax-deferred retirement and other tax-advantaged plans and accounts. Prospective investors should contact their tax advisors and financial planners regarding the tax consequences to them of holding Fund shares through such plans and/or accounts.

Corporate Shareholders

Subject to limitation and other rules, a corporate shareholder of the Fund may be eligible for the dividends-received deduction on Fund distributions attributable to dividends received by the Fund from domestic corporations, which, if received directly by the corporate shareholder, would qualify for such a deduction. For eligible corporate shareholders, the dividends-received deduction may be subject to certain reductions, and a distribution by the Fund attributable to dividends of a domestic corporation will be eligible for the deduction only if certain holding period and other requirements are met. These requirements are complex; therefore, corporate shareholders of the Fund are urged to consult their own tax advisors and financial planners.

As discussed above, a portion of the interest paid or accrued on certain high-yield discount obligations that the Fund may own may not be deductible to the issuer. If a portion of the interest paid or accrued on certain high-yield discount obligations is not deductible, that portion will be treated as a dividend. In such cases, if the issuer of the obligation is a domestic corporation, dividend payments by the Fund may be eligible for the dividends-received deduction to the extent of the dividend portion of such interest.

Foreign Shareholders

Generally, unless an exception applies, distributions made to foreign shareholders other than Capital Gain Dividends will be subject to non-refundable U.S. federal income tax withholding at a 30% rate (or such lower rate as may be provided under an applicable income tax treaty) even if they are funded by income or gains (such as portfolio interest, short-term capital gains, or foreign-source dividend and interest income) that, if paid to a foreign person directly, would not be subject to withholding. However, generally, for taxable years beginning before January 1, 2010 (and, for taxable year beginning before January 1, 2010 if pending legislation (discussed

100

below) is enacted), distributions made to foreign shareholders and properly designated by the Fund as “interest-related dividends” are exempt from U.S. federal income tax withholding. The exemption does not apply to any distribution to a foreign shareholder (i) to the extent that the dividend is attributable to certain interest on an obligation if the foreign shareholder is the issuer or is a 10% shareholder of the issuer; (ii) that is within certain foreign countries that have inadequate information exchange with the United States, or (iii) to the extent the dividend is attributable to interest paid by a person that is a related person of the foreign shareholder and the foreign shareholder is a controlled foreign corporation. Interest-related dividends are generally attributable to the Fund’s net U.S.-source interest income of types similar to those not subject to U.S. federal income tax if earned directly by an individual foreign shareholder. In order to qualify as an interest-related dividend, the Fund must designate a distribution as such in a written notice mailed to its shareholders not later than 60 days after the close of the Fund’s taxable year. Notwithstanding the foregoing, if a distribution described above is “effectively connected” with a U.S. trade or business (or, if an income tax treaty applies, is attributable to a U.S. permanent establishment) of the recipient foreign shareholder, neither U.S. federal income tax withholding nor the exemption for interest-related dividends will apply. Instead, the distribution will be subject to the tax, reporting and withholding requirements generally applicable to U.S. persons, and an additional branch profits tax may apply if the recipient foreign shareholder is a foreign corporation.

In general, a foreign shareholder’s capital gains realized on the disposition of Fund shares, distributions properly designated as Capital Gain Dividends and, with respect to taxable years of a Fund beginning before January 1, 2010 (and, for taxable years beginning before January 1, 2010 if pending legislation (discussed below) is enacted), “short-term capital gain dividends” (defined below) are not subject to U.S. federal income or withholding tax, unless: (i) such gains or distributions are effectively connected with a U.S. trade or business (or, if an income tax treaty applies, are attributable to a U.S. permanent establishment) of the foreign shareholder; (ii) in the case of an individual foreign shareholder, the shareholder is present in the U.S. for a period or periods aggregating 183 days or more during the year of the disposition of Fund shares or the receipt of Capital Gain Dividends or short-term capital gain dividend and certain other conditions are met; or (iii) the Fund shares on which the foreign shareholder realized gain constitute U.S. real property interests (USRPIs, defined below) or, in certain cases, the distributions are attributable to gain from the sale or exchange of a USRPI, as discussed below. If the requirements of clause (i) are met, the tax, reporting and withholding requirements applicable to U.S. persons generally will apply to the foreign shareholder and an additional branch profits tax may apply if the foreign shareholder is a foreign corporation. If the requirements of clause (i) are not met, but the requirements of clause (ii) are met, such gains and distributions will be subject to U.S. federal income tax at a 30% rate (or such lower rate as may be provided under an applicable income tax treaty). Please see below for a discussion of the tax implications to foreign shareholders in the event that clause (iii) applies. “Short-term capital gain dividends” are distributions attributable to the Fund’s net short-term capital gain in excess of its net long-term capital loss and designated as such by the Fund in a written notice mailed by the Fund to its shareholders not later than 60 days after the close of the Fund’s taxable year.

In the case of shares held through an intermediary, even if the Fund makes a designation with respect to a payment, no assurance can be made that the intermediary will respect such a designation, and an intermediary may withhold even if the Fund makes a designation with respect to a payment. Foreign shareholders should contact their intermediaries regarding the application of these rules to their accounts.

Even if permitted to do so, the Fund provides no assurance that it will designate any distributions as interest-related dividends or short-term capital gain dividends.

Special rules apply to distributions to foreign shareholders from the Fund if it is either a “U.S. real property holding corporation” (USRPHC) or would be a USRPHC but for the operation of certain exceptions from USRPI

101

treatment for interests in domestically controlled REITs or regulated investment companies and not-greater-than-5% interests in publicly traded classes of stock in REITs or regulated investment companies. Additionally, special rules apply to the sale of shares in the Fund if it is a USRPHC. Generally, a USRPHC is a domestic corporation that holds USRPIs — defined generally as any interest in U.S. real property or any equity interest in a USRPHC — the fair market value of which equals or exceeds 50% of the sum of the fair market values of the corporation’s USRPIs, interests in real property located outside the United States and other assets. If the Fund holds (directly or indirectly) significant interests in REITs, it may be a USRPHC.

If the Fund is a USRPHC or would be a USRPHC but for certain of the above-mentioned exceptions, amounts the Fund receives from REITs derived from gains realized from USRPIs generally will retain their character as such in the hands of the Fund’s foreign shareholders. In the hands of a foreign shareholder that holds (or has held in the prior 12 months) more than a 5% interest in any class of the Fund, such amounts generally will be treated as gains “effectively connected” with the conduct of a “U.S. trade or business,” and subject to tax at graduated rates. Moreover, such shareholder generally will be required to file a U.S. income tax return for the year recognized, and the Fund must withhold 35% of the amount of such distribution. Otherwise, in the case of all other foreign shareholders (i.e., those whose interest in any class of the Fund did not exceed 5% at any time during the prior 12 months), such amounts generally will be treated as ordinary income (regardless of any designation by the Fund that such distribution is a short-term capital gain dividend (in the event that certain pending legislation is enacted, as described above) or Capital Gain Dividend), and the Fund must withhold 30% (or a lower applicable treaty rate) of the amount of the distribution paid to such shareholders. If the Fund is subject to the rules of this paragraph, its foreign shareholders may also be subject to “wash sale” rules to prevent the avoidance of the foregoing tax-filing and payment obligations through the sale and repurchase of Fund shares. Prior to January 1, 2010, if the Fund was a USRPHC or would have been a USRPHC but for certain of the above-mentioned exceptions, similar rules generally also applied to any non-REIT USRPI gains recognized by the Fund directly or indirectly through certain lower-tier regulated investment companies. Pending legislation proposes to extend such application for one additional year, i.e., to distributions made on or after January 1, 2010 but before January 1, 2011. However, as of the date of this SAI, it is unclear whether such legislation will be enacted and, if enacted, what the terms of the extension will be.

In addition, if the Fund is a USRPHC, it generally must withhold 10% of the amount realized in redemption by a greater-than-5% foreign shareholder, and that shareholder must file a U.S. income tax return for the year of the disposition of the USRPI and pay any additional tax due on the gain. Prior to January 1, 2010, such withholding generally was not required with respect to amounts paid in redemption of shares of the Fund if it was a domestically controlled USRPHC, or, in certain limited cases, if the Fund (whether or not domestically controlled) held substantial investments in regulated investment companies that were domestically controlled USRPHCs. Pending legislation proposes to extend this exemption from withholding for one additional year, i.e., for redemptions made on or after January 1, 2010 but before January 1, 2011. However, as of the date of this SAI, it is unclear whether such legislation will be enacted and, if enacted, what the terms of the extension will be. Unless and until such legislation is enacted, beginning on January 1, 2010, withholding is required in respect of amounts paid in redemption of shares of the Fund by a greater-than-5% foreign shareholder if the Fund is a USRPHC, without regard to whether the Fund or any regulated investment company in which it invests is domestically controlled.

In addition, if the Fund is a USRPHC, it must typically withhold 10% of the amount realized in redemption by a greater-than-5% foreign shareholder, and that shareholder must file a U.S. income tax return for the year of the disposition of the USRPI and pay any additional tax due on the gain. Prior to January 1, 2010, no withholding is generally required with respect to amounts paid in redemption of shares of the Fund if the Fund is a domestically controlled USRPHC or, in certain limited cases, if the Fund (whether or not domestically controlled) holds substantial investments in regulated investment companies that are domestically controlled USRPHCs. It is currently unclear whether Congress will extend this exemption from withholding to January 1, 2010 and beyond.

102

A beneficial holder of shares who is a foreign person may be subject to state and local tax and to the U.S. federal estate tax in addition to the federal tax on income referred to above.

Tax-Exempt Shareholders

Under current law, the Fund serves to “block” (that is, prevent the attribution to shareholders of) UBTI from being realized by tax-exempt shareholders. Notwithstanding this “blocking” effect, a tax-exempt shareholder could realize UBTI by virtue of its investment in the Fund if shares in the Fund constitute debt-financed property in the hands of the tax-exempt shareholder within the meaning of Code Section 514(b).

It is possible that a tax-exempt shareholder will also recognize UBTI if the Fund recognizes excess inclusion income (as described above) derived from direct or indirect investments in residual interests in REMICs or equity interests in TMPs. Furthermore, any investment in residual interests of a CMO that has elected to be treated as a REMIC can create complex tax consequences, especially if the Fund has state or local governments or other tax-exempt organizations as shareholders.

In addition, special tax consequences apply to charitable remainder trusts (CRTs) that invest in regulated investment companies that invest directly or indirectly in residual interests in REMICs or equity interests in TMPs. Under legislation enacted in December 2006, a CRT, as defined in Section 664 of the Code, that realizes UBTI for a taxable year must pay an excise tax annually of an amount equal to such UBTI. Under IRS guidance issued in October 2006, a CRT will not recognize UBTI solely as a result of investing in a Fund that recognizes excess inclusion income. Rather, if at any time during any taxable year a CRT (or one of certain other tax-exempt shareholders, such as the United States, a state or political subdivision, or an agency or instrumentality thereof, and certain energy cooperatives) is a record holder of a share in a Fund that recognizes excess inclusion income, then the Fund will be subject to a tax on that portion of its excess inclusion income for the taxable year that is allocable to such shareholders at the highest U.S. federal corporate income tax rate. The extent to which the IRS guidance remains applicable in light of the December 2006 legislation is unclear. To the extent permitted under the 1940 Act, the Fund may elect to specially allocate any such tax to the applicable CRT, or other shareholder, and thus reduce such shareholder’s distributions for the year by the amount of the tax that relates to such shareholder’s interest in the Fund. The Fund has not yet determined whether such an election will be made. CRTs are urged to consult their tax advisors concerning the consequences of investing in the Fund.

Tax Shelter Reporting Regulations

103

CONTROL PERSONS AND PRINCIPAL SHAREHOLDERS

Principal Holder Ownership of the Fund

Control Person Ownership of the Fund


Fund	Shareholder Account Registration	Share Balance	Percentage of class

104

LEGAL PROCEEDINGS

105

Ameriprise Financial and certain of its affiliates have historically been involved in a number of legal, arbitration and regulatory proceedings, including routine litigation, class actions, and governmental actions, concerning matters arising in connection with the conduct of their business activities. Ameriprise Financial believes that the Fund are not currently the subject of, and that neither Ameriprise Financial nor any of its affiliates are the subject of, any pending legal, arbitration or regulatory proceedings that are likely to have a material adverse effect on the Fund or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Fund. Ameriprise Financial is required to make 10-Q, 10-K and, as necessary, 8-K filings with the SEC on legal and regulatory matters that relate to Ameriprise Financial and its affiliates. Copies of these filings may be obtained by accessing the SEC website at www.sec.gov.

There can be no assurance that these matters, or the adverse publicity associated with them, will not result in increased fund redemptions, reduced sale of fund shares or other adverse consequences to the Fund. Further, although we believe proceedings are not likely to have a material adverse effect on the Fund or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Fund, these proceedings are subject to uncertainties and, as such, we are unable to estimate the possible loss or range of loss that may result. An adverse outcome in one or more of these proceedings could result in adverse judgments, settlements, fines, penalties or other relief that could have a material adverse effect on the consolidated financial condition or results of operations of Ameriprise Financial.

106

APPENDIX A — DESCRIPTIONS OF SECURITIES RATINGS

STANDARD & POOR’S (S&P)

Bonds

The following summarizes the ratings used by S&P for bonds. The ratings AAA, AA, A and BBB denote investment grade securities.

AAA bonds have the highest rating assigned by S&P and are considered to have an extremely strong capacity to pay interest and repay principal.

AA bonds are considered to have a very strong capacity to pay interest and repay principal, and they differ from AAA only in small degree.

CC rating typically is applied to debt subordinated to senior debt that is assigned an actual or implied CCC rating.

A-1

C rating typically is applied to debt subordinated to senior debt that is assigned an actual or implied CCC- debt rating. The C rating may be used to cover a situation, for example, where a bankruptcy petition has been filed, but debt service payments are continued.

CI rating is reserved for income bonds on which no interest is being paid.

Plus (+) or minus (-) : The ratings from AA to CCC may be modified by the addition of a plus or minus sign to show relative standing within the major rating categories.

Municipal Notes

SP-2. Notes rated SP-2 are considered to have satisfactory capacity to pay principal and interest.

Notes due in three years or less normally receive a note rating. Notes maturing beyond three years normally receive a bond rating, although the following criteria are used in making that assessment:

Amortization schedule (the larger the final maturity relative to other maturities, the more likely the issue will be rated as a note).

Source of payment (the more dependent the issue is on the market for its refinancing, the more likely it will be rated as a note).

Commercial Paper

MOODY’S INVESTORS SERVICE, INC. (MOODY’S)

Municipal Bonds

A-2

Those bonds in the Aa through B groups that Moody’s believes possess the strongest investment attributes are designated by the symbols Aa1, A1 or Baa1.

Caa bonds are considered to be of poor standing. Such issues may be in default or there may be present elements of danger with respect to principal or interest.

Ca bonds are considered to represent obligations that are speculative in a high degree. Such issues are often in default or have other marked shortcomings.

C bonds are the lowest rated class of bonds and issues so rated are considered to have extremely poor prospects of ever attaining any real investment standing.

Corporate Bonds

Municipal Notes

MIG 2. This designation denotes high quality. Margins of protection are ample although not so large as in the preceding group.

A-3

Commercial Paper

Moody’s employs the following three designations, all judged to be investment grade, to indicate the relative repayment capacity of rated issuers:

Prime-1 Highest Quality

Prime-2 Higher Quality

Prime-3 High Quality

FITCH, INC. (FITCH)

Long-Term Debt

Investment Grade Bond Ratings

Speculative Grade Bond Ratings

A-4

CC bonds are considered to be minimally protected. Default in payment of interest and/or principal seems probable over time.

C bonds are in imminent default in payment of interest or principal.

Plus (+) or minus (-) : Plus or minus signs are used to show relative standing within the major rating categories. Plus and minus signs, however, are not used in the DDD, DD, or D categories.

Short-Term Debt

F-1+ obligations have exceptionally strong credit quality and are considered to have the strongest degree of assurance for timely payment.

F-1 obligations are considered to reflect an assurance of timely payment only slightly less in degree than issues rated F-1+.

B obligations are considered to have a minimal capacity for timely payment of financial commitments and a susceptibility to the adverse effects of changes in circumstances and economic conditions.

D obligations are in actual or imminent payment default.

A-5

APPENDIX B — PROXY VOTING POLICIES AND PROCEDURES

COLUMBIA MANAGEMENT INVESTMENT ADVISERS, LLC

PROXY VOTING POLICY FOR LEGACY COLUMBIA MANAGEMENT CLIENTS

EFFECTIVE MAY 1, 2010

•

References to Columbia Management Advisors, LLC and CMA are deemed to be references to Columbia Management Investment Advisers, LLC; and

•

References to Bank of America Corporation and BAC are deemed to be references to Ameriprise Financial, Inc.

In addition, the text of footnote 1 in the Proxy Voting Policy is hereby deleted and replaced with the following:

B-1

Columbia Management Advisors, LLC (“CMA”) — Proxy Voting Policy

Last Review Date:

April 2010

Applicable Regulatory Authority:

Rule 206(4)-6 under the Investment Advisers Act of 1940

Form N-PX

ERISA Department of Labor Bulletin 08-2

Institutional Shareholder Services, Inc. (SEC No Action Letter dated September 15, 2004)

Explanation/Summary of Regulatory Requirements

Policy Summary

Policy

CMA endeavors to vote, in accordance with this Policy, all proxies of which it becomes aware prior to the vote deadline date, subject to certain general exceptions described below.

B-2

Means of Achieving Compliance

The specific responsibilities of the Proxy Committee and scope of its oversight are described in the Proxy Committee’s charter.

CMA’S INVESTMENT ASSOCIATES’ RESPONSIBILITIES

Research analysts and portfolio managers must discharge their responsibilities consistent with the obligations set forth below (refer to Management of Conflicts of Interest — Additional Procedures). A research analyst or portfolio manager must disclose in writing any inappropriate attempt to influence their recommendation or any other personal interest that they have with the issuer (see Appendix B — Conflicts of Interest Disclosure and Certification Form). For each Proxy Referral (defined below), the research analyst or portfolio manager is responsible for memorializing their recommendation on the Proxy Voting Recommendation Form (see Appendix C) and communicating their recommendation to the Proxy Group.

CONFLICTS OF INTEREST

B-3

•

Causing the proxies to be voted in accordance with the recommendations of an independent third party (which generally will be CMA’s proxy voting agent);

•

Causing the proxies to be delegated to a qualified, independent third party, which may include CMA’s proxy voting agent; or

•

In unusual cases, with the Client’s consent and upon ample notice, forwarding the proxies to CMA’s clients so that they may vote the proxies directly.

Affiliate Investment Companies and Public Companies

Management of Conflicts of Interest — Additional Procedures

CMA and other BAC affiliates have adopted various other policies and procedures that help reinforce this Policy. Please see any associated documents.

Ownership Limits — Delegation of Proxy Voting to an Independent Third Party

B-4

PROXY VOTING GUIDELINES

A. CMA’s Proxy Voting Guidelines — General Practices.

B. Ability to Vote Proxies Other than as Provided by Voting Guidelines.

C. Other Proxy Matters

For the following categories, proxies will be voted as stated below:

New Proposals . For certain new proposals that are expected to be proposed to shareholders of multiple companies, the Proxy Committee may develop a Voting Guideline which will be incorporated into this Policy.

Accounts Adhering to Taft Hartley Principles. All proposals for accounts adhering to Taft Hartley principles will be voted according to the Taft Hartley Guidelines developed by the proxy vendor.

Accounts Adhering to Socially Responsible Principles. All proposals for accounts adhering to socially responsible principles will be voted according to the Socially Responsible Guidelines developed by the proxy vendor or as specified by the client.

Proxies of International Issuers . In general, CMA will refrain from voting securities in cases where international issuers impose share blocking restrictions. However, in the exceptional circumstances that CMA determines that it would be appropriate to vote such securities, all proposals for these securities will be voted only on the specific instruction of the Proxy Committee and to the extent practicable in accordance with the Voting Guidelines set forth in this Policy. Additionally, proxies will typically not be voted in markets where powers of attorney are required to be executed in order to vote shares.

Proxy Referrals for Passive Index Accounts. Proxy Referrals for a security that is held only within a passive index account managed by CMA’s Quantitative Strategies Group and not in any other account within CMA, shall be voted according to the guidelines developed by the proxy vendor or as specified by the client. However, if a security is held within a passive index account managed by CMA’s Quantitative Strategies Group and within another CMA-managed account (including without limitation an account actively managed by CMA’s Quantitative Strategies Group), all proposals, including Proxy Referrals, will be voted in accordance with the Voting Guidelines, subject to the other provisions of this Policy.

B-5

Proxy Voting for Securities on Loan . CMA generally votes in cases where shares have been loaned from actively managed Columbia Funds as long as the shares have been recalled in a timely manner. However, CMA generally does not vote shares that have been loaned from passively managed Columbia Index Funds. Other CMA clients may have their own stock loan programs and may or may not recall their shares for proxy voting.

Supervision

Escalation

Monitoring/Oversight

Recordkeeping

•

The name of the issuer of the security;

•

The exchange ticker symbol of the portfolio security (if symbol is available through reasonably practicable means);

•

The Council on Uniform Securities Identification Procedures number for the portfolio security (if number is available through reasonably practicable means);

•

The shareholder meeting date;

•

A brief identification of the matter voted on;

•

Whether the matter was proposed by the issuer or by a security holder;

•

Whether the company cast its vote on the matter;

•

How the company cast its vote (e.g., for or against proposal, or abstain; for or withhold regarding the election of directors); and

•

Whether the company cast its vote for or against management.

B-6

These records include:


Document		Responsible Party
Proxy Committee Meeting Minutes and Related Materials		Proxy Group in GWIM Investment Operations
Proxy Vote Recommendation Form and Supporting Materials of Investment Management Personnel Concerning Proxy Decisions and Recommendations (or any other document created by CMA that was material to making a voting decision or that memorializes the basis for the voting decision)		Proxy Group in GWIM Investment Operations
Conflicts of Interest Review Documentation, including Conflicts of Interest Forms		Compliance Risk Management
Client Communications Regarding Proxy Matters		Client Service Group
Copy of Each Applicable Proxy Statement Unless it has been Filed with the SEC and may be Obtained from the SEC’s EDGAR System		Proxy Group in GWIM Investment Operations

Records should be retained for a period of not less than six years plus the current year. Records must be retained in an appropriate office of CM for the first three years.

B-7

APPENDIX A — CMA’s Proxy Voting Policy

CMA’S VOTING GUIDELINES

A. The Proxy Committee has adopted the following guidelines for voting proxies:

1. Matters Relating to the Board of Directors/Corporate Governance

CMA generally will vote FOR:

•

However, CMA generally will WITHHOLD votes from pertinent director nominees if:

(i)

the board as proposed to be constituted would have more than one-third of its members from management;

(ii)

(iii)

(iv)

a director serves on more than six public company boards;

(v)

the CEO serves on more than two public company boards other than the company’s board; or

(vi)

•

Proposals to declassify a board, absent special circumstances that would indicate that shareholder interests are better served by a classified board structure.

CMA generally will vote FOR:

•

Proposals to separate the role of Chairman of the Board and CEO.

•

Proposals that grant or restore shareholder ability to remove directors with or without cause.

•

Proposals to permit shareholders to elect directors to fill board vacancies.

•

Proposals that encourage directors to own a minimum amount of company stock.

B-8

•

Proposals to provide or to restore shareholder appraisal rights.

•

Proposals for the company to adopt confidential voting.

CMA will generally vote FOR 162(m) bonus plans unless the Proxy Administrator recommends voting against a specific plan, in which case CMA will vote on a CASE-BY-CASE basis.

CMA generally will vote AGAINST:

•

Proposals to classify boards, absent special circumstances indicating that shareholder interests would be better served by a classified board structure.

•

Proposals that give management the ability to alter the size of the board without shareholder approval.

•

Proposals that provide directors may be removed only by supermajority vote.

•

Proposals which allow more than one vote per share in the election of directors.

•

Proposals that provide that only continuing directors may elect replacements to fill board vacancies.

•

Proposals that mandate a minimum amount of company stock that directors must own.

•

Proposals to limit the tenure of non-management directors.

CMA will vote on a CASE-BY-CASE basis:

•

In contested elections of directors. Proposals to adopt or eliminate cumulative voting.

•

CMA generally will vote on a CASE-BY-CASE basis on board approved proposals relating to corporate governance. Such proposals include, but are not limited to:

•

Reimbursement of proxy solicitation expenses taking into consideration whether or not CMA was in favor of the dissidents.

•

CMA will vote on a CASE-BY-CASE basis to indemnify directors and officers, and AGAINST proposals to indemnify external auditors.

•

CMA will vote FOR the indemnification of internal auditors, unless the costs associated with the approval are not disclosed.

2. Compensation

CMA generally will vote FOR:

•

Proposals requiring that executive severance arrangements be submitted for shareholder ratification.

•

Proposals asking a company to expense stock options.

B-9

•

Proposals to put option repricings to a shareholder vote.

•

Shareholder proposals to adopt a non-binding advisory vote on Executive Compensation (“Say on Pay”).

•

CMA generally will vote AGAINST:

•

Stock option plans that permit issuance of options with an exercise price below the stock’s current market price, or that permit replacing or repricing of out-of-the money options.

•

Proposals to authorize the replacement or repricing of out-of-the money options.

•

CMA will vote on a CASE-BY-CASE basis:

•

Proposals regarding approval of specific executive severance arrangements.

•

-Management proposals regarding “Say on Pay” (i.e. non-binding advisory vote on pay).

•

Proposals that involve awarding 50% or more of the equity shares of an equity-based compensation plan to the top five or fewer executives.

3. Capitalization

CMA generally will vote FOR:

•

Proposals for the elimination of authorized but unissued shares or retirement of those shares purchased for sinking fund or treasury stock.

•

Proposals to institute/renew open market share repurchase plans in which all shareholders may participate on equal terms.

B-10

•

Proposals to reduce or change the par value of common stock, provided the number of shares is also changed in order to keep the capital unchanged.

CMA will evaluate on a CASE-BY-CASE basis proposals regarding:

•

Whether the company has attained benefits from being publicly traded.

•

Cash-out value

•

Balanced interests of continuing vs. cashed-out shareholders

•

Market reaction to public announcement of transaction

4. Mergers, Restructurings and Other Transactions

5. Anti-Takeover Measures

Poison Pills

•

CMA votes FOR shareholder proposals that ask a company to submit its poison pill for shareholder ratification.

•

CMA generally votes FOR shareholder proposals to eliminate a poison pill.

•

CMA generally votes AGAINST management proposals to ratify a poison pill.

Greenmail

•

CMA will vote FOR proposals to adopt anti-greenmail charter or bylaw amendments or to otherwise restrict a company’s ability to make greenmail payments.

Supermajority vote

•

Control Share Acquisition Provisions

•

CMA will vote FOR proposals to opt out of control share acquisition statutes.

6. Other Business Matters

CMA generally will vote FOR:

•

Bylaw amendments giving holders of at least 25% of outstanding common stock the ability to call a special meeting of stockholders.

B-11

•

Board governance document amendments or other proposals which give the lead independent director the authority to call special meetings of the independent directors at any time.

CMA generally will vote FOR:

•

Proposals to approve routine business matters such as changing the company’s name and procedural matters relating to the shareholder meeting such as approving the minutes of a prior meeting.

•

Proposals to ratify the appointment of auditors, unless any of the following apply in which case CMA will generally vote AGAINST the proposal:

•

Credible reason exists to question:

•

The auditor’s independence, as determined by applicable regulatory requirements.

•

The accuracy or reliability of the auditor’s opinion as to the company’s financial position.

•

Bylaw or charter changes that are of a housekeeping nature (e.g., updates or corrections).

•

Proposals to approve the annual reports and accounts provided the certifications required by the Sarbanes Oxley Act of 2002 have been provided.

CMA generally will vote AGAINST:

•

Proposals to eliminate the right of shareholders to act by written consent or call special meetings.

•

Shareholder proposals to change the date, time or location of the company’s annual meeting of shareholders.

CMA will vote AGAINST:

•

Authorization to transact other unidentified substantive (as opposed to procedural) business at a meeting.

CMA will vote on a CASE-BY-CASE basis:

•

Proposals on whether and how to vote on “bundled” or otherwise conditioned proposals, depending on the overall economic effects upon shareholders.

•

B-12

•

7. Other Matters Relating to Foreign Issues

CMA generally will vote FOR:

•

Most stock (scrip) dividend proposals. CMA votes AGAINST proposals that do not allow for a cash option unless management demonstrates that the cash option is harmful to shareholder value.

•

Proposals to capitalize the company’s reserves for bonus issues of shares or to increase the par value of shares.

•

Proposals to approve control and profit transfer agreements between a parent and its subsidiaries.

•

Proposals for the adoption of financing plans if they are in the best economic interests of shareholders.

•

The supervisory board needs to approve an issuance of shares while the supervisory board is independent within the meaning of CMA’ categorization rules and the Dutch Corporate Governance Code.

•

No call/put option agreement exists between the company and the foundation.

•

There is a qualifying offer clause or there are annual management and supervisory board elections.

•

The issuance authority is for a maximum of 18 months.

•

The board of the company-friendly foundation is independent.

•

The company has disclosed under what circumstances it expects to make use of the possibility to issue preference shares.

•

There are no priority shares or other egregious protective or entrenchment tools.

•

The company releases its proxy circular, with details of the poison pill proposal, at least three weeks prior to the meeting.

•

Art 2:359c Civil Code of the legislative proposal has been implemented.

B-13

8. Investment Company Matters

Election of Directors:

CMA will vote on a CASE-BY-CASE basis proposals for the election of directors, considering the following factors:

•

Board structure

•

Attendance at board and committee meetings.

CMA will WITHHOLD votes from directors who:

•

Ignore a shareholder proposal that is approved by a majority of shares outstanding;

•

Ignore a shareholder proposal this is approved by a majority of the votes cast for two consecutive years;

•

Are interested directors and sit on the audit or nominating committee; or

•

Are interested directors and the full board serves as the audit or nominating committee or the company does not have one of these committees.

Proxy Contests:

CMA will vote on a CASE-BY-CASE basis proposals for proxy contests, considering the following factors:

•

Past performance relative to its peers

•

Market in which fund invests

•

Measures taken by the board to address the pertinent issues (e.g., closed-end fund share market value discount to NAV)

•

Past shareholder activism, board activity and votes on related proposals

•

Strategy of the incumbents versus the dissidents

•

Independence of incumbent directors; director nominees

•

Experience and skills of director nominees

•

Governance profile of the company

•

Evidence of management entrenchment

Converting Closed-end Fund to Open-end Fund:

CMA will vote conversion proposals on a CASE-BY-CASE basis, considering the following factors:

•

Past performance as a closed-end fund

•

Market in which the fund invests

•

Measures taken by the board to address the discount

•

Past shareholder activism, board activity, and votes on related proposals.

B-14

Investment Advisory Agreements:

CMA will vote investment advisory agreements on a CASE-BY-CASE basis, considering the following factors:

•

Proposed and current fee schedules

•

Fund category/investment objective

•

Performance benchmarks

•

Share price performance as compared with peers

•

Resulting fees relative to peers

•

Assignments (where the adviser undergoes a change of control)

Approving New Classes or Series of Shares:

CMA will vote FOR the establishment of new classes or series of shares.

Preferred Stock Proposals:

CMA will vote on a CASE-BY-CASE basis proposals for the authorization for or increase in the preferred shares, considering the following factors:

•

Stated specific financing purpose

•

Possible dilution for common shares

•

Whether the shares can be used for anti-takeover purposes

Policies Addressed by the Investment Company Act of 1940 (“1940 Act”):

CMA will vote proposals regarding adoption or changes of policies addressed by the 1940 Act on a CASE-BY-CASE basis, considering the following factors:

•

Potential competitiveness

•

Regulatory developments

•

Current and potential returns

•

Current and potential risk

CMA generally will vote FOR these amendments as long as the proposed changes do not fundamentally alter the investment focus of the fund and do comply with current SEC interpretations.

Changing a Fundamental Restriction to a Non-fundamental Restriction:

CMA will vote on a CASE-BY-CASE basis proposals to change a fundamental restriction to a non-fundamental restriction, considering the following factors:

•

Fund’s target investments

•

Reasons given by the fund for the change

•

Projected impact of the change on the portfolio

Change Fundamental Investment Objective to Non-fundamental:

B-15

Name Change Proposals:

CMA will vote on a CASE-BY-CASE basis proposals to change a fund’s name, considering the following factors:

•

Political/economic changes in the target market

•

Consolidation in the target market

•

Current asset composition

Change in Fund’s Subclassification:

CMA will vote on a CASE-BY-CASE basis proposals to change a fund’s subclassification, considering the following factors:

•

Potential competitiveness

•

Current and potential returns

•

Risk of concentration

•

Consolidation in target industry

Disposition of Assets/Termination/Liquidation:

CMA will vote on a CASE-BY-CASE basis these proposals, considering the following factors:

•

Strategies employed to salvage the company

•

Past performance of the fund

•

Terms of the liquidation

Changes to the Charter Document:

CMA will vote on a CASE-BY-CASE basis proposals to change the charter document, considering the following factors:

•

The degree of change implied by the proposal

•

The efficiencies that could result

•

The state of incorporation; net effect on shareholder rights

•

Regulatory standards and implications

CMA will vote FOR:

•

CMA will vote AGAINST:

•

Proposals enabling the Board to:

•

Change, without shareholder approval the domicile of the fund

B-16

•

Adopt, without shareholder approval, material amendments of the fund’s declaration of trust or other organizational document

Changing the Domicile of a Fund:

CMA will vote on a CASE-BY-CASE basis proposals to reincorporate, considering the following factors:

•

Regulations of both states

•

Required fundamental policies of both states

•

The increased flexibility available

Authorizing the Board to Hire and Terminate Subadvisors Without Shareholder Approval:

Distribution Agreements:

CMA will vote these proposals on a CASE-BY-CASE basis, considering the following factors:

•

Fees charged to comparably sized funds with similar objectives

•

The proposed distributor’s reputation and past performance

•

The competitiveness of the fund in the industry

•

Terms of the agreement

Master-Feeder Structure:

CMA will vote FOR the establishment of a master-feeder structure.

Mergers:

CMA will vote merger proposals on a CASE-BY-CASE basis, considering the following factors:

•

Resulting fee structure

•

Performance of both funds

•

Continuity of management personnel

•

Changes in corporate governance and their impact on shareholder rights

Shareholder Proposals to Establish Director Ownership Requirement:

B-17

Shareholder Proposals to Reimburse Shareholder for Expenses Incurred:

CMA will vote on a CASE-BY-CASE basis proposals to reimburse proxy solicitation expenses. Shareholder Proposals to Terminate the Investment Adviser:

CMA will vote on a CASE-BY-CASE basis proposals to terminate the investment adviser, considering the following factors:

•

Performance of the fund’s NAV

•

The fund’s history of shareholder relations

•

The performance of other funds under the adviser’s management

B-18

APPENDIX B

Conflicts of Interest Disclosure and Certification Form

Conflict Review Questionnaire for Proxy Voting Working Group Members and Other Individuals Participating in the Proxy Voting Decision-Making Process.

Instructions: Please complete each of the questions. Please provide an explanation for any affirmative responses. Return the completed questionnaire to Columbia Management Conflicts of Interest Officer.

Issuer and Proxy Matter:

Do you or any member of your immediate family have an existing (or potential) business, financial, personal or other relationship with any management personnel of the issuer ¹ ?

Have you discussed this particular proxy proposal with anyone outside of Columbia Management’s investment group ² ?

Are you aware of any other potential personal conflicts of interest not described above? Please detail below.

Name:

Signed:

Date:

1	Personal investing in the issuer by you or a member of your immediate family does not require an affirmative response to this item.

2	Communications with issuer or solicitors in the regular course of business would not have to be disclosed on this form.

B-19

APPENDIX C

CMA Proxy Vote Recommendation/Proxy Committee Request Form

Name of Investment Associate:

Company Name:

Overview of Proxy Vote and Meeting Date:

Proxy Agenda Item(s)

Description of Item:

(The above information will be pre-populated by the Proxy Department.)

Recommendation (FOR , AGAINST, ABSTAIN) including brief rationale:

Please attach any supporting information other than analysis or reports provided by the Proxy Department.

Signed

Send Completed Forms to:

GWIM Investment Operations — Proxy Department

In the case of Proxy Votes to be referred to the Proxy Committee, submit this form and materials to the Chair of the Proxy Committee

B-20

COLUMBIA FUNDS SERIES TRUST

PART C

OTHER INFORMATION

ITEM 28.

Exhibits

All references to the “Registration Statement” in the following list of Exhibits refer to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-89661; 811-09645); unless otherwise noted.



(a)(1)		Certificate of Trust dated October 22, 1999 is incorporated by reference to Post-Effective Amendment (“PEA”) No. 1 to the Registration Statement filed on February 10, 2000.

(a)(2)		Certificate of Amendment of Certificate of Trust dated September 21, 2005 is incorporated by reference to PEA No. 41 to the Registration Statement filed on November 21, 2005.

(a)(3)		Amended and Restated Declaration of Trust dated September 26, 2005 is incorporated by reference to PEA No. 41 to the Registration Statement filed on November 21, 2005.

(b)		Not Applicable.

(c)		Articles III and VII of Registrant’s Amended and Restated Declaration of Trust dated September 26, 2005 define the rights of holders of securities being registered.

(d)(1)		Investment Management Services Agreement between Columbia Management Investment Advisers, LLC (“CMIA”) and the Registrant, filed herewith.

(d)(2)		Assumption Agreement by CMIA for CFST on behalf of Columbia LifeGoal Growth Portfolio, Columbia LifeGoal Balanced Growth Portfolio and Columbia LifeGoal Income and Growth Portfolio, filed herewith.

(d)(3)		Assumption Agreement by CMIA for CFST on behalf of Corporate Bond Portfolio and Mortgage- and Asset-Backed Portfolio, filed herewith.

(d)(4)		Investment Sub-Advisory Agreement among CMIA, Brandes Investment Partners, L.P. (“Brandes”) and the Registrant, filed herewith.

(d)(5)		Investment Sub-Advisory Agreement among CMIA, Marsico Capital Management, LLC (“Marsico”) and the Registrant, filed herewith.

(d)(6)		Investment Sub-Advisory Agreement among CMIA, MacKay Shields LLC (“MacKay Shields”) and the Registrant, filed herewith.

(e)(1)		Distribution Agreement with Columbia Management Investment Distributors, Inc. (“CMID”) and the Registrant, filed herewith.

(f)		Form of Deferred Compensation Plan incorporated by reference to PEA No. 7 to the Registration Statement of Columbia Funds Series Trust II, File Nos. 333-132211 and 811-21862, filed February 26, 2010.

(g)(1)		Master Custodian Agreement between the Registrant and State Street Bank and Trust Company (“State Street”) dated June 13, 2005, with Appendix A dated May 5, 2008, is incorporated by reference to PEA No. 67 to the Registration Statement filed on June 27, 2008.

(g)(2)		Amendment No. 1 to the Master Custodian Agreement between the Registrant and State Street dated June 1, 2006 is incorporated by reference to PEA No. 45 to the Registration Statement filed on June 14, 2006.

(h)(1)		Administrative Services Agreement between the Registrant and CMIA, filed herewith.



(h)(2)		Shareholder Administration Plan relating to Registrant’s Class A Shares is incorporated by reference to PEA No. 68 to the Registration Statement filed on July 29, 2008.



(h)(3)		Shareholder Administration Plan relating to Registrant’s Class B and Class C Shares is incorporated by reference to PEA No. 68 to the Registration Statement filed on July 29, 2008.

(h)(4)		Transfer, Dividend Disbursing and Shareholders’ Servicing Agent Agreement among Columbia Management Investment Services Corp. (“CMIS”), CMIA and the Registrant, filed herewith.

(h)(5)		Transfer, Dividend Disbursing and Shareholders’ Servicing Agent Agreement among CMIS, CMIA and the Registrant, acting on behalf of Class Y shares of its series listed on Appendix I thereto, filed herewith.

(h)(6)		Cross Indemnification Agreement between Columbia Funds Master Investment Trust LLC (the “Master Trust”) and the Registrant dated September 26, 2005 is incorporated by reference to PEA No. 45 to the Registration Statement filed on June 14, 2006.

(h)(7)		Mutual Fund Fee and Expense Agreement among the Registrant, Columbia Funds Master Investment Trust, LLC, Columbia Funds Variable Insurance Trust I, Columbia Funds Series Trust II, CMIA and CMID, filed herewith.

(h)(8)		Financial Reporting Services Agreement among the Registrant, the other parties listed on Schedule A, CMA and State Street dated December 15, 2006, with Schedule A dated May 5, 2008, is incorporated by reference to PEA No. 67 to the Registration Statement filed on June 27, 2008.

(h)(8)(i)		Amendment to Financial Reporting Services dated April 30, 2010 with Schedule A dated May 1, 2010, filed herewith.

(h)(9)		Accounting Services Agreement among the Registrant, the other parties listed on Schedule A, CMA and State Street dated December 15, 2006 is incorporated by reference to PEA No. 67 to the Registration Statement filed on June 27, 2008.

(h)(9)(i)		Amendment to Accounting Services Agreement dated April 30, 2010, with Schedule A dated May 1, 2010, filed herewith.

(h)(10)(i)		Committed Line of Credit Agreement among the Registrant, the other parties listed on Schedule 2, the lending institutions listed on the signature pages and State Street dated October 19, 2006 is incorporated by reference to PEA No. 55 to the Registration Statement filed on December 14, 2007.

(h)(10)(ii)		Notice and Acknowledgement to Committed Line of Credit Agreement regarding conversion of Columbia Funds Master Investment Trust, LLC (formerly, Columbia Funds Master Investment Trust) to a Delaware limited liability company, dated March 30, 2007, to be filed by amendment.

(h)(10)(iii)		Amendment Agreement No. 1 and Instrument of Adherence dated October 18, 2007 is incorporated by reference to PEA No. 55 to the Registration Statement filed on December 14, 2007.

(h)(10)(iv)		Amendment Agreement No. 2 dated as of February 28, 2008 is incorporated by reference to PEA No. 63 filed on March 28, 2008.

(h)(10)(v)		Amendment Agreement No. 3 dated as of March 31, 2008 is incorporated by reference to PEA No. 64 to the Registration Statement filed on April 28, 2008.

(h)(10)(vi)		Amendment Agreement No. 4 dated October 16, 2008, is incorporated by reference to PEA No. 70 to the Registration Statement, filed on or about December 23, 2008.

(h)(10)(vii)		Amendment No. 5 to Committed Credit Agreement dated June 1, 2009 is incorporated by reference to PEA No. 7 to the Registration Statement of Columbia Funds Series Trust II, File Nos. 333-132211 and 811-21862, filed February 26, 2010.

(h)(10)(viii)		Amendment No. 6 to Committed Credit Agreement dated October 15, 2009 is incorporated by reference to PEA No. 7 to the Registration Statement of Columbia Funds Series Trust II, File Nos. 333-132211 and 811-21862, filed February 26, 2010.

(h)(11)(i)		Uncommitted Line of Credit Agreement among the Registrant, the other parties listed on Appendix 1 and State Street dated September 19, 2005 is incorporated by reference to PEA No. 55 to the Registration Statement filed on December 14, 2007.

(h)(11)(ii)		Amendment No. 1 to the Uncommitted Line of Credit Agreement dated February 15, 2006 is incorporated by reference to PEA No. 55 to the Registration Statement filed on December 14, 2007.



(h)(11)(iii)		Amendment No. 2 to the Uncommitted Line of Credit Agreement dated June 7, 2006 is incorporated by reference to PEA No. 55 to the Registration Statement filed on December 14, 2007.

(h)(11)(iv)		Amendment No. 3 to the Uncommitted Line of Credit Agreement dated September 15, 2006 is incorporated by reference to PEA No. 55 to the Registration Statement filed on December 14, 2007.

(h)(11)(v)		Amendment No. 4 to the Uncommitted Line of Credit Agreement dated October 19, 2006 is incorporated by reference to PEA No. 55 to the Registration Statement filed on December 14, 2007.

(h)(11)(vi)		Amendment No. 5 to the Uncommitted Line of Credit Agreement September 17, 2007 is incorporated by reference to PEA No. 55 to the Registration Statement filed on December 14, 2007.

(h)(11)(vii)		Amendment No. 6 to the Uncommitted Line of Credit Agreement dated October 18, 2007 is incorporated by reference to PEA No. 55 to the Registration Statement filed on December 14, 2007.

(h)(11)(viii)		Notice and Acknowledgement to Uncommitted Line of Credit Agreement regarding conversion of Columbia Funds Master Investment Trust LLC to a Delaware limited liability company dated March 30, 2007, to be filed by amendment.

(h)(11)(ix)		Amendment No. 7 to the Uncommitted Line of Credit Agreement dated as of February 28, 2008 is incorporated by reference to PEA No. 63 to the Registration Statement filed on March 28, 2008.

(h)(11)(x)		Amendment No. 8 to the Uncommitted Line of Credit Agreement dated as of March 31, 2008 is incorporated by reference to PEA No. 64 to the Registration Statement filed on April 28, 2008.

(h)(12)		Securities Lending Authorization Agreement, to be filed by amendment.

(i)		Opinion of Goodwin Procter LLP, to be filed by amendment.

(j)		Consent of PricewaterhouseCoopers LLP, to be filed by amendment.

(k)		Not Applicable.

(l)		Not Applicable.

(m)(1)		Shareholder Servicing and Distribution Plan for Registrant’s Class A Shares with Exhibit I dated April 30, 2008 is incorporated by reference to PEA No. 68 to the Registration Statement filed on July 29, 2008.

(m)(2)		Distribution Plan for certain Fund share classes of the Registrant with Exhibits I and II dated April 30, 2008 is incorporated by reference to PEA No. 68 to the Registration Statement filed on July 29, 2008.

(m)(3)		Shareholder Servicing Plan for certain Fund share classes of Registrant with Exhibit I dated April 30, 2008 is incorporated by reference to PEA No. 68 to the Registration Statement filed on July 29, 2008.

(m)(4)		Shareholder Servicing Plan Implementation Agreement between Registrant and CMID, filed herewith.

(n)		Rule 18f-3 Multi-Class Plan is incorporated by reference to PEA No. 79 to the Registration Statement filed on September 11, 2009.

(p)(1)		Columbia Funds Family Code of Ethics, effective January 3, 2006, is incorporated by reference to PEA No. 56 to the Registration Statement filed on December 31, 2007.

(p)(2)		Brandes Code of Ethics is incorporated by reference to PEA No. 67 to the Registration Statement filed on June 27, 2008.

(p)(3)		Marsico Code of Ethics is incorporated by reference to PEA No. 73 to the Registration Statement filed on or about June 26, 2009.

(p)(4)		MacKay Shields Code of Ethics, filed herewith.

(q)(1)		Powers of Attorney for Edward J. Boudreau, Jr., William P. Carmichael, William A. Hawkins, R. Glenn Hilliard, John J. Nagorniak, Anthony M. Santomero and Minor M. Shaw dated May 1, 2010, filed herewith.

(q)(2)		Power of Attorney for J. Kevin Connaughton dated May 1, 2010, filed herewith.

ITEM 29.

Persons Controlled by or Under Common Control with the Registrant

No person is controlled by or under common control with the Registrant.

ITEM 30.

Indemnification

Article VII of the Registrant’s Declaration of Trust provides for the indemnification of the Registrant’s trustees, officers, employees and other agents. Indemnification of the Registrant’s administrators, distributor, custodian and transfer agents is provided for, respectively, in the Registrant’s:

Administrative Services Agreement with CMIA;

Distribution Agreement with CMID;

Custody Agreement with State Street; and

Transfer Agency and Services Agreement with CMIS and CMIA.

THE REGISTRANT HAS ENTERED INTO A CROSS INDEMNIFICATION AGREEMENT WITH THE MASTER TRUST DATED SEPTEMBER 26, 2005. THE MASTER TRUST WILL INDEMNIFY AND HOLD HARMLESS THE TRUST AGAINST ANY LOSSES, CLAIMS, DAMAGES OR LIABILITIES TO WHICH THE TRUST MAY BECOME SUBJECT UNDER THE SECURITIES ACT OF 1933 (THE 1933 ACT), THE INVESTMENT COMPANY ACT OF 1940 (THE 1940 ACT), OR OTHERWISE, INSOFAR AS SUCH LOSSES, CLAIMS, DAMAGES OR LIABILITIES (OR ACTIONS IN RESPECT THEREOF) ARISE OUT OF OR ARE BASED UPON AN UNTRUE STATEMENT OR ALLEGED UNTRUE STATEMENT OF A MATERIAL FACT CONTAINED IN ANY PROSPECTUSES, ANY PRELIMINARY PROSPECTUSES, THE REGISTRATION STATEMENTS, ANY OTHER PROSPECTUSES RELATING TO THE SECURITIES, OR ANY AMENDMENTS OR SUPPLEMENTS TO THE FOREGOING (HEREINAFTER REFERRED TO COLLECTIVELY AS THE “OFFERING DOCUMENTS”), OR ARISE OUT OF OR ARE BASED UPON THE OMISSION OR ALLEGED OMISSION TO STATE THEREIN A MATERIAL FACT REQUIRED TO BE STATED OR NECESSARY TO MAKE THE STATEMENTS THEREIN NOT MISLEADING, IN EACH CASE TO THE EXTENT, BUT ONLY TO THE EXTENT, THAT SUCH UNTRUE STATEMENT OR ALLEGED UNTRUE STATEMENT OR OMISSION OR ALLEGED OMISSION WAS MADE IN THE OFFERING DOCUMENTS IN RELIANCE UPON AND IN CONFORMITY WITH WRITTEN INFORMATION FURNISHED TO THE TRUST BY THE MASTER TRUST EXPRESSLY FOR USE THEREIN; AND WILL REIMBURSE THE TRUST FOR ANY LEGAL OR OTHER EXPENSES REASONABLY INCURRED BY THE TRUST IN CONNECTION WITH INVESTIGATING OR DEFENDING ANY SUCH ACTION OR CLAIM; PROVIDED, HOWEVER, THAT THE MASTER TRUST SHALL NOT BE LIABLE IN ANY SUCH CASE TO THE EXTENT THAT ANY SUCH LOSS, CLAIM, DAMAGE, OR LIABILITY ARISES OUT OF OR IS BASED UPON AN UNTRUE STATEMENT OR ALLEGED UNTRUE STATEMENT OR OMISSION OR ALLEGED OMISSION MADE IN THE OFFERING DOCUMENTS IN RELIANCE UPON AND IN CONFORMITY WITH WRITTEN INFORMATION FURNISHED TO THE MASTER TRUST BY THE TRUST FOR USE IN THE OFFERING DOCUMENTS.

THE TRUST WILL INDEMNIFY AND HOLD HARMLESS THE MASTER TRUST AGAINST ANY LOSSES, CLAIMS, DAMAGES OR LIABILITIES TO WHICH THE MASTER TRUST MAY BECOME SUBJECT UNDER THE 1933 ACT, THE 1940 ACT, OR OTHERWISE, INSOFAR AS SUCH LOSSES, CLAIMS, DAMAGES OR LIABILITIES (OR ACTIONS IN RESPECT THEREOF) ARISE OUT OF OR ARE BASED UPON AN UNTRUE STATEMENT OR ALLEGED UNTRUE STATEMENT OF A MATERIAL FACT CONTAINED IN THE OFFERING DOCUMENTS OR ARISE OUT OF OR ARE BASED UPON THE OMISSION OR ALLEGED OMISSION TO STATE THEREIN A MATERIAL FACT REQUIRED TO BE STATED OR NECESSARY TO MAKE THE STATEMENTS THEREIN NOT MISLEADING, IN EACH CASE TO THE EXTENT, BUT ONLY TO THE EXTENT, THAT SUCH UNTRUE STATEMENT OR ALLEGED UNTRUE STATEMENT OR OMISSION OR ALLEGED OMISSION WAS MADE IN THE OFFERING DOCUMENTS IN RELIANCE UPON AND IN CONFORMITY WITH WRITTEN INFORMATION FURNISHED TO THE MASTER TRUST BY THE TRUST EXPRESSLY FOR USE THEREIN; AND WILL REIMBURSE THE MASTER TRUST FOR ANY LEGAL OR OTHER EXPENSES REASONABLY INCURRED BY THE MASTER TRUST IN CONNECTION WITH INVESTIGATING OR DEFENDING ANY SUCH ACTION OR CLAIM; PROVIDED, HOWEVER, THAT THE TRUST SHALL NOT BE LIABLE IN ANY SUCH CASE TO THE EXTENT THAT ANY SUCH LOSS, CLAIM, DAMAGE, OR LIABILITY ARISES OUT OF OR IS BASED UPON AN UNTRUE STATEMENT OR ALLEGED UNTRUE STATEMENT OR OMISSION OR ALLEGED OMISSION MADE IN THE OFFERING DOCUMENTS IN RELIANCE UPON AND IN CONFORMITY WITH WRITTEN INFORMATION FURNISHED TO THE TRUST BY THE MASTER TRUST FOR USE IN THE OFFERING DOCUMENTS.

PROMPTLY AFTER RECEIPT BY AN INDEMNIFIED PARTY UNDER SUBSECTION (A) OR (B) ABOVE OF NOTICE OF THE COMMENCEMENT OF ANY ACTION, SUCH INDEMNIFIED PARTY SHALL, IF A CLAIM IN RESPECT THEREOF IS TO BE MADE AGAINST AN INDEMNIFYING PARTY OR PARTIES UNDER SUCH SUBSECTION, NOTIFY THE INDEMNIFYING PARTY OR PARTIES IN WRITING OF THE COMMENCEMENT THEREOF; BUT THE OMISSION TO SO NOTIFY THE INDEMNIFYING PARTY OR PARTIES SHALL NOT RELIEVE IT OR THEM FROM ANY LIABILITY WHICH IT OR THEY MAY HAVE TO ANY INDEMNIFIED PARTY OTHERWISE THAN UNDER SUCH SUBSECTION. IN CASE ANY SUCH ACTION SHALL BE BROUGHT AGAINST ANY INDEMNIFIED PARTY AND IT SHALL NOTIFY THE INDEMNIFYING PARTY OR PARTIES OF THE COMMENCEMENT THEREOF, THE INDEMNIFYING PARTY OR PARTIES SHALL BE ENTITLED TO PARTICIPATE THEREIN AND, TO THE EXTENT THAT EITHER INDEMNIFYING PARTY OR BOTH SHALL WISH, TO ASSUME THE DEFENSE THEREOF, WITH COUNSEL SATISFACTORY TO SUCH INDEMNIFIED PARTY, AND, AFTER NOTICE FROM THE INDEMNIFYING PARTY OR PARTIES TO SUCH INDEMNIFIED PART OF ITS OR THEIR ELECTION SO TO ASSUME THE DEFENSE THEREOF, THE INDEMNIFYING PARTY OR PARTIES SHALL NOT BE LIABLE TO SUCH INDEMNIFIED PARTY UNDER SUCH SUBSECTION FOR ANY LEGAL EXPENSES OF OTHER COUNSEL OR ANY OTHER EXPENSES, IN EACH CASE SUBSEQUENTLY INCURRED BY SUCH INDEMNIFIED PARTY, IN CONNECTION WITH THE DEFENSE THEREOF OTHER THAN REASONABLE COSTS OF INVESTIGATION.

THE REGISTRANT HAS OBTAINED FROM A MAJOR INSURANCE CARRIER A TRUSTEES’ AND OFFICERS’ LIABILITY POLICY COVERING CERTAIN TYPES OF ERRORS AND OMISSIONS. IN NO EVENT WILL THE REGISTRANT INDEMNIFY ANY OF ITS TRUSTEES, OFFICERS, EMPLOYEES, OR AGENTS AGAINST ANY LIABILITY TO WHICH SUCH PERSON WOULD OTHERWISE BE SUBJECT BY REASON OF HIS/HER WILLFUL MISFEASANCE, BAD FAITH, GROSS NEGLIGENCE IN THE PERFORMANCE OF HIS/HER DUTIES, OR BY REASON OF HIS/HER RECKLESS DISREGARD OF THE DUTIES INVOLVED IN THE CONDUCT OF HIS/HER OFFICE OR ARISING UNDER HIS AGREEMENT WITH THE REGISTRANT. THE REGISTRANT WILL COMPLY WITH RULE 484 UNDER THE 1933 ACT AND RELEASE NO. 11330 UNDER THE 1940 ACT, IN CONNECTION WITH ANY INDEMNIFICATION.

INSOFAR AS INDEMNIFICATION FOR LIABILITY ARISING UNDER THE 1933 ACT MAY BE PERMITTED TO TRUSTEES, OFFICERS, AND CONTROLLING PERSONS OF THE REGISTRANT PURSUANT TO THE FOREGOING PROVISIONS, OR OTHERWISE, THE REGISTRANT HAS BEEN ADVISED THAT IN THE OPINION OF THE SECURITIES AND EXCHANGE COMMISSION (SEC) SUCH INDEMNIFICATION IS AGAINST PUBLIC POLICY AS EXPRESSED IN THE 1933 ACT AND IS, THEREFORE, UNENFORCEABLE. IN THE EVENT THAT A CLAIM FOR INDEMNIFICATION AGAINST SUCH LIABILITIES (OTHER THAN THE PAYMENT BY THE REGISTRANT OF EXPENSES INCURRED OR PAID BY A TRUSTEE, OFFICER, OR CONTROLLING PERSON OF THE REGISTRANT IN THE SUCCESSFUL DEFENSE OF ANY ACTION, SUIT, OR PROCEEDING) IS ASSERTED BY SUCH TRUSTEE, OFFICER OR CONTROLLING PERSON IN CONNECTION WITH THE SECURITIES BEING REGISTERED, THE REGISTRANT WILL, UNLESS IN THE OPINION OF ITS COUNSEL THE MATTER HAS BEEN SETTLED BY CONTROLLING PRECEDENT, SUBMIT TO A COURT OF APPROPRIATE JURISDICTION THE QUESTION WHETHER SUCH INDEMNIFICATION BY IT IS AGAINST PUBLIC POLICY AS EXPRESSED IN THE 1933 ACT AND WILL BE GOVERNED BY THE FINAL ADJUDICATION OF SUCH ISSUE.

ITEM 31.

Business and Other Connections of the Investment Advisor

To the knowledge of the Registrant, none of the directors or officers of Columbia Management Investment Advisers, LLC (the Adviser), the Registrant’s investment adviser, or Brandes Investment Partners, L.P. (Brandes), Marsico Capital Management, LLC (Marsico) or MacKay Shields MacKay Shields LLC (MacKay Shields), the subadvisers to certain of the Registrant’s portfolios, except as set forth below, are or have been, at any time during the Registrant’s past two fiscal years, engaged in any other business, profession, vocation or employment of a substantial nature.

(a)

The Adviser, a wholly-owned subsidiary of Ameriprise Financial, Inc. performs investment advisory services for the Registrant and certain other clients. Information regarding the business of the Adviser and certain of its officers is set forth in the Prospectuses and Statements of Additional Information of the Registrant’s portfolios and is incorporated herein by reference. Information about the business of the Adviser and the directors and principal executive officers of the Adviser is also included in the Form ADV filed by the Adviser (formerly, RiverSource Investments, LLC) with the SEC pursuant to the Investment Advisers Act of 1940 (File No. 801-25943), which is incorporated herein by reference. In addition to their position with the Adviser, certain directors and officers of the Adviser also hold various positions with, and engage in business for, Ameriprise Financial, Inc. or its other subsidiaries. Prior to May 1, 2010, when Ameriprise Financial, Inc. acquired the long-term asset management business of Columbia Management Group, LLC from Bank of America, N.A., certain current directors and officers of the Adviser held various positions with, and engaged in business for, Columbia Management Group, LLC or other direct or indirect subsidiaries of Bank of America Corporation.

(b)

Brandes performs investment management services for the Registrant and certain other clients. Information regarding the business of Brandes and certain of its officers is set forth in the Prospectuses and Statement of Additional Information of the Registrant’s portfolio(s) subadvised by Brandes and is incorporated herein by reference. Information about the business of Brandes and the directors and principal executive officers of Brandes is also included in the Form ADV filed by Brandes with the SEC pursuant to the Investment Advisers Act of 1940 (File No. 801-24986), which is incorporated herein by reference.

(c)

Marsico performs investment management services for the Registrant and certain other clients. Information regarding the business of Marsico and certain of its officers is set forth in the Prospectuses and Statement of Additional Information of the Registrant’s portfolio(s) subadvised by Marsico and is incorporated herein by reference. Information about the business of Marsico and the directors and principal executive officers of Marsico is also included in the Form ADV filed by Marsico with the SEC pursuant to the Investment Advisers Act of 1940 (File No. 801-54914), which is incorporated herein by reference.

(d)

MacKay Shields performs investment management services for the Registrant and certain other clients. Information regarding the business of MacKay Shields and certain of its officers is set forth in the Prospectuses and Statement of Additional Information of the Registrant’s portfolio(s) subadvised by MacKay Shields and is incorporated herein by reference. Information about the business of MacKay Shields and the directors and principal executive officers of MacKay Shields is also included in the Form ADV filed by MacKay Shields with the SEC pursuant to the Investment Advisers Act of 1940 (File No. 801-5594), which is incorporated herein by reference.

ITEM 32.

Principal Underwriters

(a) Columbia Management Investment Distributors, Inc. acts as principal underwriter for the following investment companies, including the Registrant:

Columbia Acorn Trust; Columbia Funds Series Trust; Columbia Funds Series Trust I; Columbia Funds Series Trust II; Columbia Funds Variable Insurance Trust; Columbia Funds Variable Insurance Trust I; RiverSource Bond Series, Inc.; RiverSource California Tax-Exempt Trust; RiverSource Dimensions Series, Inc.; RiverSource Diversified Income Series, Inc.; RiverSource Equity Series, Inc.; RiverSource Global Series, Inc.; RiverSource Government Income Series, Inc.; RiverSource Government Money Market Fund, Inc.; RiverSource High Yield Income Series, Inc.; RiverSource Income Series, Inc.; RiverSource International Managers Series, Inc.; RiverSource International Series, Inc.; RiverSource Investment Series, Inc.; RiverSource Large Cap Series, Inc.; RiverSource Managers Series, Inc.; RiverSource Market Advantage Series, Inc.; RiverSource Money Market Series, Inc.; RiverSource Sector Series, Inc.; RiverSource Selected Series, Inc.; RiverSource Series Trust; RiverSource Short Term Investments Series, Inc.; RiverSource Special Tax-Exempt Series Trust; RiverSource Strategic Allocation Series, Inc., RiverSource Strategy Series, Inc.; RiverSource Tax-Exempt Income Series, Inc.; RiverSource Tax-Exempt Series, Inc.; RiverSource Variable Series Trust; Seligman Asset Allocation Series, Inc.; Seligman Capital Fund, Inc.; Seligman Communications and Information Fund, Inc.; Seligman Frontier Fund, Inc.; Seligman Growth Fund, Inc.; Seligman Global Fund Series, Inc.; Seligman LaSalle Real Estate Fund Series, Inc.; Seligman Municipal Fund Series, Inc.; Seligman Municipal Series Trust; Seligman Portfolios, Inc.; Seligman TargetHorizon ETF Portfolios, Inc.; Seligman Value Fund Series, Inc., and Wanger Advisors Trust. Columbia Management Investment Distributors, Inc. acts as placement agent for Columbia Funds Master Investment Trust, LLC.

(b) As to each director, principal officer or partner of Columbia Management Investment Distributors, Inc.


Name and Principal Business Address*	Position and Offices with Principal Underwriter	Positions and Offices with Registrant

William F. “Ted” Truscott	Director (Chairman)	Senior Vice President

Michael A. Jones	Director; President	Senior Vice President

Beth Ann Brown	Director; Senior Vice President	None

Amy Unckless	Director; Chief Administrative Officer	None

Jeffrey F. Peters	Senior Vice President	None

Jeffrey P. Fox	Chief Financial Officer	None

Scott Roane Plummer	Vice President, Chief Counsel and Assistant Secretary	Senior Vice President, Secretary and Chief Legal Officer

Stephen O. Buff	Vice President, Chief Compliance Officer	None

Christopher Thompson	Senior Vice President and Head of Investment Products and Marketing	None

Brian Walsh	Vice President, Strategic Relations	None

Frank Kimball	Vice President, Asset Management Distribution Operations and Governance	None

Thomas R. Moore	Secretary	None

Michael E. DeFao	Vice President and Assistant Secretary	None

Paul Goucher	Vice President and Assistant Secretary	Assistant Secretary

Tara Tilbury	Vice President and Assistant Secretary	None

Nancy W. LeDonne	Vice President and Assistant Secretary	None

Ryan C. Larrenega	Vice President and Assistant Secretary	Assistant Secretary

Joseph L. D’Alessandro	Vice President and Assistant Secretary	None

Christopher O. Petersen	Vice President and Assistant Secretary	Assistant Secretary

Eric T. Brandt	Vice President and Assistant Secretary	None

James L. Hamalainen	Treasurer	None

Neysa Alecu	Anti-Money Laundering Officer and Identity Theft Prevention Officer	None

Kevin Wasp	Ombudsman	None

Lee Faria	Conflicts Officer	None

*	c/o One Financial Center, Boston, MA 02111

ITEM 33.

Location of Accounts and Records

Person maintaining physical possession of accounts, books and other documents required to be maintained by Section 31(a) of the Investment Company Act of 1940 and the Rules thereunder include:

•

Registrant, One Financial Center, Boston, MA 02111;

•

Registrant’s investment adviser and administrator, Columbia Management Investment Advisers, LLC, 100 Federal Street, Boston, MA 02110;

•

Registrant’s subadviser, Brandes Investment Partners, L.P. , 11988 El Camino Real, San Diego, CA 92130;

•

Registrant’s subadviser, MacKay Shields, 9 West 57 ^th Street, New York, NY 10019;

•

Registrant’s subadviser, Marsico Capital Management, LLC, 1200 17 ^th Street, Suite 1600, Denver, CO 80202;

•

Registrant’s principal underwriter, Columbia Management Investment Distributors, Inc., One Financial Center, Boston, MA 02111;

•

Registrant’s transfer agent, Columbia Management Investment Services Corp., One Financial Center, Boston, MA 02111; and

•

Registrant’s custodian, State Street Bank and Trust Company, State Street Financial Center, One Lincoln Street, Boston, MA 02111.

In addition, Iron Mountain Records Management is an off-site storage facility housing historical records that are no longer required to be maintained on-site. Records stored at this facility include various trading and accounting records, as well as other miscellaneous records. The address for Iron Mountain Records Management is 920 & 950 Apollo Road, Eagan, MN 55121.

ITEM 34.

Management Services

Not Applicable.

ITEM 35.

Undertakings

Not Applicable.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant, Columbia Funds Series Trust, has duly caused this Registration Statement to be signed on its behalf by the undersigned, duly authorized, in the City of Boston, and The Commonwealth of Massachusetts on the 28th day of May, 2010.


COLUMBIA FUNDS SERIES TRUST

By:		/s/ J. Kevin Connaughton
Name: Title:		J. Kevin Connaughton President

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities and on the date indicated:


SIGNATURES	TITLE	DATE

/s/ J. Kevin Connaughton J. Kevin Connaughton	President (Principal Executive Officer)	May 28, 2010

/s/ Michael G. Clarke Michael G. Clarke	Chief Financial Officer (Principal Financial Officer)	May 28, 2010

/s/ Joseph F. DiMaria Joseph F. DiMaria	Chief Accounting Officer (Principal Accounting Officer)	May 28, 2010

/s/ Edward J. Boudreau, Jr.* Edward J. Boudreau, Jr.	Trustee	May 28, 2010

/s/ William P. Carmichael* William P. Carmichael	Trustee	May 28, 2010

/s/ William A. Hawkins* William A. Hawkins	Trustee	May 28, 2010



/s/ R. Glenn Hilliard* R. Glenn Hilliard	Trustee	May 28, 2010

/s/ Minor M. Shaw* Minor M. Shaw	Trustee	May 28, 2010

/s/ John J. Nagorniak* John J. Nagorniak	Trustee	May 28, 2010

/s/ Anthony M. Santomero* Anthony M. Santomero	Trustee	May 28, 2010



*By:		/s/ Ryan C. Larrenaga
		Ryan C. Larrenaga Attorney-in-Fact** May 28, 2010

**	Executed by Ryan C. Larrenaga on behalf of each of the Trustees pursuant to a Power of Attorney dated May 1, 2010, filed herewith.

EXHIBIT INDEX


Exhibit No.		Description

(d)(1)		Investment Management Services Agreement

(d)(2)		Assumption Agreement by CMIA for CFST on behalf of Columbia LifeGoal Growth Portfolio, Columbia LifeGoal Balanced Growth Portfolio and Columbia LifeGoal Income and Growth Portfolio

(d)(3)		Assumption Agreement by CMIA for CFST on behalf of Corporate Bond Portfolio and Mortgage- and Asset-Backed Portfolio

(d)(4)		Investment Sub-Advisory Agreement among CMIA, Brandes and the Registrant

(d)(5)		Investment Sub-Advisory Agreement among CMIA, Marsico and the Registrant

(d)(6)		Investment Sub-Advisory Agreement among CMIA, MacKay Shields and the Registrant

(e)(1)		Distribution Agreement with CMID and the Registrant

(h)(1)		Administrative Services Agreement between the Registrant and CMIA

(h)(4)		Transfer, Dividend Disbursing and Shareholders’ Servicing Agent Agreement among CMIS, CMIA and the Registrant

(h)(5)		Transfer, Dividend Disbursing and Shareholders’ Servicing Agent Agreement among CMIS, CMIA and the Registrant, acting on behalf of Class Y shares of its series listed on Appendix I thereto

(h)(7)		Mutual Fund Fee and Expense Agreement among the Registrant, Columbia Funds Master Investment Trust, LLC, Columbia Funds Variable Insurance Trust I, Columbia Funds Series Trust II, CMIA and CMID

(h)(8)(i)		Amendment to Financial Reporting Services

(h)(9)(i)		Amendment to Accounting Services Agreement

(m)(4)		Shareholder Servicing Plan Implementation Agreement between Registrant and CMID

(p)(4)		MacKay Shields Code of Ethics

(q)(1)		Powers of Attorney for Edward J. Boudreau, Jr., William P. Carmichael, William A. Hawkins, R. Glenn Hilliard, John J. Nagorniak, Anthony M. Santomero and Minor M. Shaw dated May 1, 2010

(q)(2)		Power of Attorney for J. Kevin Connaughton dated May 1, 2010

Exhibit (d)(1)

INVESTMENT MANAGEMENT SERVICES AGREEMENT

COLUMBIA FUNDS SERIES TRUST

This Agreement, dated as of May 1, 2010, is by and between Columbia Management Investment Advisers, LLC (formerly known as RiverSource Investments, LLC) (the “Investment Manager”), a Minnesota limited liability company and Columbia Funds Series Trust (the “Registrant”), a Delaware statutory trust, on behalf of its underlying series listed in Schedule A (the term “Fund” or “Funds” is used to refer to either the Registrant or its underlying series, as context requires).

Part One: INVESTMENT MANAGEMENT AND OTHER SERVICES

(1)

The Fund hereby retains the Investment Manager, and the Investment Manager hereby agrees, for the period of this Agreement and under the terms and conditions hereinafter set forth, to furnish the Fund continuously with investment advice; to determine, consistent with the Fund’s investment objectives, strategies and policies as from time to time set forth in its then-current prospectus or statement of additional information, or as otherwise established by the Board of Directors/Trustees (the “Board”), which investments, in the Investment Manager’s discretion, shall be purchased, held or sold, and to execute or cause the execution of purchase or sell orders; to recommend changes to investment objectives, strategies and policies to the Board, as the Investment Manager deems appropriate; to perform investment research and prepare and make available to the Fund research and statistical data in connection therewith; and to furnish all other services of whatever nature that the Investment Manager from time to time reasonably determines to be necessary or useful in connection with the investment management of the Fund as provided under this Agreement; subject always to oversight by the Board and the authorized officers of the Fund. The Investment Manager agrees: (a) to maintain an adequate organization of competent persons to provide the services and to perform the functions herein mentioned (to the extent that such services and functions have not been delegated to a subadviser); and (b) to maintain adequate oversight over any subadvisers hired to provide services and to perform the functions herein mentioned. The Investment Manager agrees to meet with any persons at such times as the Board deems appropriate for the purpose of reviewing the Investment Manager’s performance under this Agreement and will prepare and furnish to the Board such reports, statistical data and other information relating to the investment management of the Fund in such form and at such intervals as the Board may reasonably request. The Fund agrees that the Investment Manager may, at its own expense, subcontract for certain of the services described under this Agreement (including with affiliates of the Investment Manager) with the understanding that the quality and scope of services required to be provided under this Agreement shall not be diminished thereby, and also with the understanding that the Investment Manager shall obtain such approval from the Board and/or Fund shareholders as is required by applicable law, rules and regulations promulgated thereunder, terms of this Agreement, resolutions of the Board and commitments of the Investment Manager. The Investment Manager agrees that, in the event it subcontracts with another party for some or all of the investment management services contemplated by this Agreement with respect to the Fund in reliance on its “manager-of-managers” exemptive order (Investment Company Act Release No. 25664 (July 16, 2002))

or a subsequent order containing such conditions, the Investment Manager will retain overall supervisory responsibility for the general management and investment of the Fund and, subject to review and approval by the Board, will set the Fund’s overall investment strategies (consistent with the Fund’s then-current prospectus and statement of additional information); evaluate, select and recommend one or more subadvisers to manage all or a portion of the Fund’s assets; when appropriate, allocate and reallocate the Fund’s assets among multiple subadvisers; monitor and evaluate the investment performance of subadvisers; and implement procedures reasonably designed to ensure that the subadvisers comply with the Fund’s investment objectives, policies and restrictions.

(2)

The Investment Manager shall comply (or cause the Fund to comply, as applicable) with all applicable law, including but not limited to the Investment Company Act of 1940, as amended, and the rules and regulations promulgated thereunder (the “1940 Act”), the Investment Advisers Act of 1940, as amended, and the rules and regulations promulgated thereunder, the 1933 Act, and the provisions of the Internal Revenue Code of 1986, as amended, applicable to the Fund as a regulated investment company.

(3)

The Investment Manager shall allocate investment opportunities among its clients, including the Fund, in a fair and equitable manner, consistent with its fiduciary obligations to clients. The Fund recognizes that the Investment Manager and its affiliates may from time to time acquire information about issuers or securities that it may not share with, or act upon for the benefit of, the Fund.

(4)

The Investment Manager agrees to vote proxies and to provide or withhold consents, or to provide such support as is required or requested by the Board in conjunction with voting proxies and providing or withholding consents, solicited by or with respect to the issuers of securities in which the Fund ’ s assets may be invested from time to time, as directed by the Board from time to time.

(5)

The Investment Manager agrees that it will maintain all required records, memoranda, instructions or authorizations relating to the management of the assets for the Fund, including with respect to the acquisition or disposition of securities. In compliance with the requirements of Rule 31a-3 under the 1940 Act, the Investment Manager hereby agrees that all records that it maintains for each Fund under this Agreement are the property of the Registrant and further agrees to surrender promptly to the Registrant any of such records upon request.

(6)	The Fund agrees that it will furnish to the Investment Manager any information that the latter may reasonably request with respect to the services performed or to be performed by the Investment Manager under this Agreement.

(7)

In selecting broker-dealers for execution, the Investment Manager will seek to obtain best execution for securities transactions on behalf of the Fund, except where otherwise directed by the Board. In selecting broker-dealers to execute transactions, the Investment Manager may consider not only available prices (including commissions or mark-up), but also other relevant factors such as, without limitation, the characteristics of the security being traded,

Page 2

the size and difficulty of the transaction, the execution, clearance and settlement capabilities as well as the reputation, reliability, and financial soundness of the broker-dealer selected, the broker-dealer’s risk in positioning a block of securities, the broker-dealer’s execution service rendered on a continuing basis and in other transactions, the broker-dealer’s expertise in particular markets, and the broker-dealer’s ability to provide research services. To the extent permitted by law, and consistent with its obligation to seek best execution, the Investment Manager may, except where otherwise directed by the Board, execute transactions or pay a broker-dealer a commission or markup in excess of that which another broker-dealer might have charged for executing a transaction provided that the Investment Manager determines, in good faith, that the execution is appropriate or the commission or markup is reasonable in relation to the value of the brokerage and/or research services provided, viewed in terms of either that particular transaction or the Investment Manager’s overall responsibilities with respect to the Fund and other clients for which it acts as investment adviser. The Investment Manager shall not consider the sale or promotion of shares of the Fund, or other affiliated products, as a factor in the selection of broker dealers through which transactions are executed.

(8)

Except for willful misfeasance, bad faith or negligence on the part of the Investment Manager in the performance of its duties, or reckless disregard by the Investment Manager of its obligations and duties, under this Agreement, neither the Investment Manager, nor any of its respective directors, officers, partners, principals, employees, or agents shall be liable for any acts or omissions or for any loss suffered by the Fund or its shareholders or creditors. To the extent permitted by applicable law, each of the Investment Manager, and its respective directors, officers, partners, principals, employees and agents, shall be entitled to rely, and shall be protected from liability in reasonably relying, upon any information or instructions furnished to it (or any of them as individuals) by the Fund or its agents which is believed in good faith to be accurate and reliable. The Fund understands and acknowledges that the Investment Manager does not warrant any rate of return, market value or performance of any assets in the Fund. Notwithstanding the foregoing, the federal securities laws impose liabilities under certain circumstances on persons who act in good faith and, therefore, nothing herein shall constitute a waiver of any right which the Fund may have under such laws or regulations.

Part Two: COMPENSATION TO THE INVESTMENT MANAGER

(1)	The Fund agrees to pay to the Investment Manager, in full payment for the services furnished, a fee as set forth in Schedule A.

(2)

The fee shall be accrued daily (unless otherwise directed by the Board consistent with the prospectus and statement of additional information of the Fund) and paid on a monthly basis and, in the event of the effectiveness or termination of this Agreement, in whole or in part with respect to any Fund, during any month, the fee paid to the Investment Manager shall be prorated on the basis of the number of days that this Agreement is in effect during the month with respect to which such payment is made.

Page 3

(3)	The fee provided for hereunder shall be paid in cash by the Fund to the Investment Manager within five business days after the last day of each month.

Part Three: ALLOCATION OF EXPENSES

(1)

The Investment Manager shall (a) furnish at its expense such office space, supplies, facilities, equipment, clerical help and other personnel and services as are required to render the services contemplated to be provided by it pursuant to this Agreement and (b) pay the compensation of the trustees or officers of the Fund who are directors, officers or employees of the Investment Manager (except to the extent the Board of the Fund shall have specifically approved the payment by the Fund of all or a portion of the compensation of the Fund’s chief compliance officer or other officer(s)). Except to the extent expressly assumed by the Investment Manager, and except to the extent required by law to be paid or reimbursed by the Investment Manager, the Investment Manager shall have no duty to pay any Fund operating expenses incurred in the organization and operation of the Fund.

Part Four: MISCELLANEOUS

(1)	The Investment Manager shall be deemed to be an independent contractor and, except as expressly provided or authorized in this Agreement or otherwise, shall have no authority to act for or represent the Fund.

(2)

The Fund acknowledges that the Investment Manager and its affiliates may perform investment advisory services for other clients, so long as the Investment Manager’s services to the Fund under this Agreement are not impaired thereby. The Investment Manager and its affiliates may give advice or take action in the performance of duties to other clients that may differ from advice given, or the timing and nature of action taken, with respect to the Fund, and the Investment Manager and its affiliates and their respective clients may trade and have positions in securities of issuers where the Fund may own equivalent or related securities, and where action may or may not be taken or recommended for the Fund. Nothing in this Agreement shall be deemed to impose upon the Investment Manager or any of its affiliates any obligation to purchase or sell, or recommend for purchase or sale for the Fund, any security or any other property that the Investment Manager or any of its affiliates may purchase, sell or hold for its own account or the account of any other client.

(3)

Neither this Agreement nor any transaction pursuant hereto shall be invalidated or in any way affected by the fact that Board members, officers, agents and/or shareholders of the Fund are or may be interested in the Investment Manager or any successor or assignee thereof, as directors, officers, stockholders or otherwise; that directors, officers, stockholders or agents of the Investment Manager are or may be interested in the Fund as Board members, officers, shareholders or otherwise; or that the Investment Manager or any successor or assignee is or may be interested in the Fund as shareholder or otherwise, provided, however, that neither the Investment Manager, nor any officer, Board member or employee thereof or of the Fund, shall knowingly sell to or buy from the Fund any property or security other than shares issued by the Fund, except in accordance with applicable regulations, United States Securities and Exchange Commission (“SEC”) orders or published SEC staff guidance.

Page 4

(4)

Any notice under this Agreement shall be given in writing, addressed and delivered, or mailed postpaid, to the party to this Agreement entitled to receive such, at such party’s principal place of business, or to such other address as either party may designate in writing mailed to the other in accordance with this Paragraph (4).

(5)

All information and advice furnished by the Investment Manager to the Fund under this Agreement shall be confidential and shall not be disclosed to unaffiliated third parties, except as required by law, order, judgment, decree, or pursuant to any rule, regulation or request of or by any government, court, administrative or regulatory agency or commission, other governmental or regulatory authority or any self-regulatory organization. All information furnished by the Fund to the Investment Manager under this Agreement shall be confidential and shall not be disclosed to any unaffiliated third party, except as permitted or required by the foregoing, where it is necessary to effect transactions or provide other services to the Fund, or where the Fund requests or authorizes the Investment Manager to do so. The Investment Manager may share information with its affiliates in accordance with its privacy and other relevant policies in effect from time to time.

(6)	This Agreement shall be governed by the internal substantive laws of the Commonwealth of Massachusetts without regard to the conflicts of laws principles thereof.

(7)

The names “Columbia Funds Series Trust” and “Board Members of Columbia Funds Series Trust” refer respectively to the Registrant created by the Declaration of Trust and the Board Members as Board Members but not individually or personally. All parties hereto acknowledge and agree that any and all liabilities of the Registrant arising, directly or indirectly, under this Agreement will be satisfied solely out of the assets of the Registrant and that no Board Member, officer or shareholder shall be personally liable for any such liabilities. All persons dealing with any Fund of the Registrant must look solely to the property belonging to such Fund for the enforcement of any claims against the Registrant.

(8)

If any term, provision, agreement, covenant or restriction of this Agreement is held by a court or other authority of competent jurisdiction to be invalid, void, or unenforceable, the remainder of the terms, provisions, agreements, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired, or invalidated so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party hereto. Upon such a determination, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a reasonably acceptable manner in order that the transactions contemplated hereby may be consummated as originally contemplated to the fullest extent possible.

(9)	This Agreement may be executed in any number of counterparts, each of which shall be deemed an original for all purposes and all of which, taken together, shall constitute one and the same instrument.

Page 5

Part Five: RENEWAL AND TERMINATION

(1)

This Agreement shall continue in effect for two years from the date of its execution, and from year to year thereafter, unless and until terminated by either party as hereinafter provided, only if such continuance is specifically approved at least annually (a) by the Board or by a vote of the majority of the outstanding voting securities of the Fund and (b) by the vote of a majority of the Board members who are not parties to this Agreement or interested persons of any such party, cast in person at a meeting called for the purpose of voting on such approval. As used in this paragraph, the term “interested person” shall have the same meaning as set forth in the 1940 Act and any applicable order or interpretation thereof issued by the SEC or its staff. As used in this agreement, the term “majority of the outstanding voting securities of the Fund” shall have the same meaning as set forth in the 1940 Act.

(2)

This Agreement may be terminated, with respect to any Fund, by either the Fund or the Investment Manager at any time by giving the other party 60 days’ written notice of such intention to terminate, provided that any termination shall be made without the payment of any penalty, and provided further that termination may be effected either by the Board or by a vote of the majority of the outstanding voting securities of the Fund.

(3)

This Agreement shall terminate in the event of its assignment, the term “assignment” for this purpose having the same meaning as set forth in the 1940 Act, unless the SEC issues an order exempting such assignment from the provisions of the 1940 Act requiring such termination, in which case this Agreement shall remain in full force and effect, subject to the terms of such order.

(4)	Except as prohibited by the 1940 Act, this Agreement may be amended with respect to any Fund upon written agreement of the Investment Manager and the Trust, on behalf of that Fund.

Part Six: Use of Name

(1)

At such time as this Agreement or any extension, renewal or amendment hereof, or any similar agreement with any organization which shall have succeeded to the business of the Investment Manager, shall no longer be in effect, the Fund will cease to use any name derived from the name of the Investment Manager or of any organization which shall have succeeded to the Investment Manager’s business as investment adviser.

[Signature Page Follows]

Page 6

IN WITNESS THEREOF, the parties hereto have executed the foregoing Agreement as of the day and year first above written.


COLUMBIA FUNDS SERIES TRUST
on behalf of the Funds

By:		/s/ Michael G. Clarke
Name:		Michael G. Clarke
Title:		Senior Vice President and Chief Financial Officer

COLUMBIA MANAGEMENT INVESTMENT ADVISERS, LLC

By:		/s/ Amy K. Johnson
Name:		Amy K. Johnson
Title:		Senior Vice President

Investment Management Services Agreement

Schedule A


*Fund*	*Assets*	*Rate of Fee ¹*
Columbia Asset Allocation Fund II	All assets	0.60	%

Columbia California Intermediate Municipal Bond Fund	First $500 million	0.40	%
	In excess of $500 million and up to $1 billion	0.35	%
	In excess of $1 billion and up to $1.5 billion	0.32	%
	In excess of $1.5 billion and up to $3 billion	0.29	%
	In excess of $3 billion and up to $6 billion	0.28	%
	In excess of $6 billion	0.27	%

Columbia Convertible Securities Fund	First $500 million	0.65	%
	In excess of $500 million and up to $1 billion	0.60	%
	In excess of $1 billion and up to $1.5 billion	0.55	%
	In excess of $1.5 billion	0.50	%

Columbia Georgia Intermediate Municipal Bond Fund	First $500 million	0.40	%
	In excess of $500 million and up to $1 billion	0.35	%
	In excess of $1 billion and up to $1.5 billion	0.32	%
	In excess of $1.5 billion and up to $3 billion	0.29	%
	In excess of $3 billion and up to $6 billion	0.28	%
	In excess of $6 billion	0.27	%

Columbia Global Value Fund	First $500 million	0.90	%
	In excess of $500 million and up to $1 billion	0.85	%
	In excess of $1 billion and up to $1.5 billion	0.80	%
	In excess of $1.5 billion and up to $3 billion	0.75	%
	In excess of $3 billion and up to $6 billion	0.73	%
	In excess of $6 billion	0.71	%

Columbia High Income Fund	First $500 million	0.55	%

¹ .	Annual rates based on a percentage of the Fund’s average daily net assets.

Schedule A to Investment Management Services Agreement


*Fund*	*Assets*	*Rate of Fee ¹*
	In excess of $500 million and up to $1 billion	0.52	%
	In excess of $1 billion and up to $1.5 billion	0.49	%
	In excess of $1.5 billion	0.46	%

Columbia International Value Fund ²	First $500 million	0.85	%
	In excess of $500 million and up to $1 billion	0.80	%
	In excess of $1 billion and up to $1.5 billion	0.75	%
	In excess of $1.5 billion and up to $3 billion	0.70	%
	In excess of $3 billion and up to $6 billion	0.68	%
	In excess of $6 billion	0.66	%

Columbia Large Cap Core Fund	First $500 million	0.60	%
	In excess of $500 million and up to $1 billion	0.55	%
	In excess of $1 billion and up to $1.5 billion	0.50	%
	In excess of $1.5 billion and up to $3 billion	0.45	%
	In excess of $3 billion and up to $6 billion	0.43	%
	In excess of $6 billion	0.41	%

Columbia Large Cap Enhanced Core Fund	First $500 million	0.35	%
	In excess of $500 million and up to $1 billion	0.30	%
	In excess of $1 billion and up to $1.5 billion	0.25	%
	In excess of $1.5 billion and up to $3 billion	0.20	%
	In excess of $3 billion and up to $6 billion	0.18	%
	In excess of $6 billion	0.16	%

Columbia Large Cap Index Fund	All assets	0.10	%

Columbia Large Cap Value Fund	First $500 million	0.60	%
	In excess of $500 million and up to $1 billion	0.55	%
	In excess of $1 billion and up to $1.5 billion	0.43	%

²	Investment management fees are paid by Columbia International Value Master Portfolio, the master portfolio in the master/feeder arrangement.

Schedule A to Investment Management Services Agreement


*Fund*	*Assets*	*Rate of Fee ¹*
	In excess of $1.5 billion and up to $3 billion	0.43	%
	In excess of $3 billion and up to $6 billion	0.43	%
	In excess of $6 billion	0.41	%

Columbia Marsico 21st Century Fund	First $500 million	0.75	%
	In excess of $500 million and up to $1 billion	0.70	%
	In excess of $1 billion and up to $1.5 billion	0.65	%
	In excess of $1.5 billion and up to $3 billion	0.60	%
	In excess of $3 billion and up to $6 billion	0.58	%
	In excess of $6 billion	0.56	%

Columbia Marsico Focused Equities Fund	First $500 million	0.75	%
	In excess of $500 million and up to $1 billion	0.70	%
	In excess of $1 billion and up to $1.5 billion	0.65	%
	In excess of $1.5 billion and up to $3 billion	0.60	%
	In excess of $3 billion and up to $6 billion	0.58	%
	In excess of $6 billion	0.56	%

Columbia Marsico Global Fund	All assets	0.80	%

Columbia Marsico Growth Fund	First $500 million	0.75	%
	In excess of $500 million and up to $1 billion	0.70	%
	In excess of $1 billion and up to $1.5 billion	0.65	%
	In excess of $1.5 billion and up to $3 billion	0.60	%
	In excess of $3 billion and up to $6 billion	0.58	%
	In excess of $6 billion	0.56	%

Columbia Marsico International Opportunities Fund	All assets	0.80	%

Columbia Maryland Intermediate Municipal Bond Fund	First $500 million	0.40	%
	In excess of $500 million and up to $1 billion	0.35	%
	In excess of $1 billion and up to $1.5 billion	0.32	%
	In excess of $1.5 billion and up to $3 billion	0.29	%
	In excess of $3 billion and up to $6 billion	0.28	%

Schedule A to Investment Management Services Agreement


*Fund*	*Assets*	*Rate of Fee ¹*
	In excess of $6 billion	0.27	%

Columbia Mid Cap Index Fund	All assets	0.10	%

Columbia Mid Cap Value Fund	First $500 million	0.65	%
	In excess of $500 million and up to $1 billion	0.60	%
	In excess of $1 billion and up to $1.5 billion	0.55	%
	In excess of $1.5 billion	0.50	%

Columbia Multi-Advisor International Equity Fund	First $500 million	0.70	%
	In excess of $500 million and up to $1 billion	0.65	%
	In excess of $1 billion and up to $1.5 billion	0.60	%
	In excess of $1.5 billion and up to $3 billion	0.55	%
	In excess of $3 billion and up to $6 billion	0.53	%
	In excess of $6 billion	0.51	%

Columbia Overseas Value Fund	All assets	0.82	%

Columbia North Carolina Intermediate Municipal Bond Fund	First $500 million	0.40	%
	In excess of $500 million and up to $1 billion	0.35	%
	In excess of $1 billion and up to $1.5 billion	0.32	%
	In excess of $1.5 billion and up to $3 billion	0.29	%
	In excess of $3 billion and up to $6 billion	0.28	%
	In excess of $6 billion	0.27	%

Columbia Short Term Bond Fund	All assets	0.30	%

Columbia Short Term Municipal Bond Fund	First $500 million	0.30	%
	In excess of $500 million	0.25	%

Columbia Small Cap Growth Fund II	First $500 million	0.70	%
	In excess of $500 million and up to $1 billion	0.65	%
	In excess of $1 billion	0.60	%

Columbia Small Cap Index Fund	All assets	0.10	%

Schedule A to Investment Management Services Agreement


*Fund*	*Assets*	*Rate of Fee ¹*
Columbia Small Cap Value Fund II	First $500 million	0.70	%
	In excess of $500 million and up to $1 billion	0.65	%
	In excess of $1 billion	0.60	%

Columbia South Carolina Intermediate Municipal Bond Fund	First $500 million	0.40	%
	In excess of $500 million and up to $1 billion	0.35	%
	In excess of $1 billion and up to $1.5 billion	0.32	%
	In excess of $1.5 billion and up to $3 billion	0.29	%
	In excess of $3 billion and up to $6 billion	0.28	%
	In excess of $6 billion	0.27	%

Columbia Total Return Bond Fund	First $500 million	0.40	%
	In excess of $500 million and up to $1 billion: 0.35%
	In excess of $1 billion and up to $1.5 billion: 0.32%
	In excess of $1.5 billion and up to $3 billion: 0.29%
	In excess of $3 billion and up to $6 billion: 0.28%
	In excess of $6 billion: 0.27%

Columbia Virginia Intermediate Municipal Bond Fund	First $500 million	0.40	%
	In excess of $500 million and up to $1 billion	0.35	%
	In excess of $1 billion and up to $1.5 billion	0.32	%
	In excess of $1.5 billion and up to $3 billion	0.29	%
	In excess of $3 billion and up to $6 billion	0.28	%
	In excess of $6 billion	0.27	%

Corporate Bond Portfolio	All assets	0.00	%

Mortgage- and Asset-Backed Portfolio	All assets	0.00	%

Columbia LifeGoal Balanced Growth Portfolio	All assets	0.25	%

Columbia LifeGoal Growth Portfolio	All assets	0.25	%

Schedule A to Investment Management Services Agreement


*Fund*	*Assets*	*Rate of Fee ¹*
Columbia LifeGoal Income and Growth Portfolio	All assets	0.25	%

Columbia LifeGoal Income Portfolio	For assets invested in other Underlying Funds	0.00	%
	For all other assets	0.50	%

Columbia Masters International Equity Portfolio	All assets	0.00	%

Schedule A to Investment Management Services Agreement

Exhibit (d)(2)

ASSUMPTION AGREEMENT

WHEREAS, Columbia Funds Series Trust, on behalf of its Columbia LifeGoal Growth Portfolio, Columbia LifeGoal Balanced Growth Portfolio, and Columbia LifeGoal Income and Growth Portfolio (collectively, the “Funds”), has entered into an investment management services agreement with Columbia Management Investment Advisers, LLC (the “Adviser”; formerly, RiverSource Investments, LLC) effective May 1, 2010 (the “Investment Management Services Agreement”);

WHEREAS, Part 3 of the Investment Management Services Agreement contemplates that the Adviser may expressly assume the expenses incurred in the operation of the Funds;

NOW, THEREFORE, in consideration of the promises and mutual covenants contained herein and in the Investment Management Services Agreement, the Adviser agrees as follows:

Expenses of the Funds . The Adviser hereby agrees to bear all fees and expenses of the Funds except taxes, brokerage fees and commissions, costs, including interest expenses, of borrowing money, extraordinary expenses, and any applicable Rule 12b-1 fees, shareholder servicing fees and/or shareholder administration fees. The expenses borne by the Adviser shall include, but not be limited to, custodian, transfer agent, legal and audit fees and costs, expenses of issue, sale, redemption and repurchase of shares, expenses of registering and qualifying shares for sale, expenses relating to trustee and shareholder meetings, the cost of preparing and distributing reports and notices to shareholders, and the cost of preparing and printing prospectuses and statements of additional information distributed to the Funds’ shareholders.

IN WITNESS WHEREOF, the Adviser has caused this Agreement to be executed by its duly authorized officer designated below with such Agreement effective as of May 1, 2010.


COLUMBIA MANAGEMENT INVESTMENT ADVISERS, LLC

By:		/s/ Amy K. Johnson
Name:		Amy K. Johnson
Title:		Senior Vice President

Acknowledged and Accepted:


COLUMBIA FUNDS SERIES TRUST on behalf of its Columbia LifeGoal Growth Portfolio, Columbia LifeGoal Balanced Growth Portfolio, and Columbia LifeGoal Income and Growth Portfolio

By:		/s/ Michael G. Clark
Name:		Michael G. Clark
Title:		Senior Vice President and Treasurer

Exhibit (d)(3)

ASSUMPTION AGREEMENT

WHEREAS, Columbia Funds Series Trust, on behalf of its Corporate Bond Portfolio and Mortgage- and Asset-Backed Portfolio (collectively, the “Funds”), has entered into an investment management services agreement with Columbia Management Investment Advisers, LLC (the “Adviser”; formerly, RiverSource Investments, LLC) effective May 1, 2010 (the “Investment Management Services Agreement”);

WHEREAS, Part 3 of the Investment Management Services Agreement contemplates that the Adviser may expressly assume the expenses incurred in the operation of the Funds;

NOW, THEREFORE, in consideration of the promises and mutual covenants contained herein and in the Investment Management Services Agreement, the Adviser agrees as follows:

IN WITNESS WHEREOF, the Adviser has caused this Agreement to be executed by its duly authorized officer designated below with such Agreement effective as of May 1, 2010.


COLUMBIA MANAGEMENT INVESTMENT ADVISERS, LLC

By:		/s/ Amy K. Johnson
Name:		Amy K. Johnson
Title:		Senior Vice President

Acknowledged and Accepted:


COLUMBIA FUNDS SERIES TRUST on behalf of its Corporate Bond Portfolio and Mortgage- and Asset-Backed Portfolio

By:		/s/ Michael G. Clark
Name:		Michael G. Clark
Title:		Senior Vice President and Treasurer

Exhibit (d)(4)

INVESTMENT SUB-ADVISORY AGREEMENT

COLUMBIA FUNDS SERIES TRUST

THIS AGREEMENT is made as of May 1, 2010 by and between COLUMBIA MANAGEMENT INVESTMENT ADVISERS, LLC (formerly, RiverSource Investments, LLC), a Minnesota limited liability company (the “Adviser”), BRANDES INVESTMENT PARTNERS, L.P, a Delaware limited partnership (the “Sub-Adviser”), and COLUMBIA FUNDS SERIES TRUST, a Delaware statutory trust (the “Trust”), on behalf of those series of the Trust now or hereafter identified on Schedule I (each a “Fund” and collectively, the “Funds”).

WHEREAS, the Trust is registered with the Securities and Exchange Commission (the “Commission”) as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”);

WHEREAS, the Adviser is registered with the Commission as an investment adviser under the Investment Advisers Act of 1940, as amended (the “Advisers Act”);

WHEREAS, the Sub-Adviser is also registered with the Commission as an investment adviser under the Advisers Act;

WHEREAS, the Adviser and the Trust have entered into an investment management services agreement (the “Investment Management Services Agreement”), pursuant to which the Adviser manages the investment operations of each Fund and may delegate certain duties of the Adviser to one or more investment sub-adviser(s); and

WHEREAS, the Adviser, with the approval of the Board of Trustees of the Trust (the “Board”), including a majority of the Trustees who are not “interested persons” (defined herein) of any party to this Agreement, desires to delegate to the Sub-Adviser the duty to manage the portfolio investments of the Funds;

NOW, THEREFORE, in consideration of the promises and mutual covenants herein contained, it is agreed between the parties hereto as follows:

1. Appointment of Sub-Adviser . The Adviser hereby appoints the Sub-Adviser and the Sub-Adviser hereby agrees to manage the portfolio investments of each Fund subject to the terms of this Agreement and subject to the supervision of the Adviser and the Board.

2. Services of Sub-Adviser . The Sub-Adviser shall perform all services necessary for the management of the portfolio investments of each Fund, including but not limited to:

Managing, in its discretion, the investment and reinvestment of all assets, now or hereafter acquired by each Fund, including determining what securities and other investments are to be purchased or sold for each Fund and executing transactions accordingly;

Transmitting trades to each Fund’s custodian for settlement in accordance with each Fund’s procedures and as may be directed by the Trust;

Assisting in the preparation of all shareholder communications, including shareholder reports, and participating in shareholder relations;

Exercising or providing support to the Adviser or the Trust in conjunction with exercising voting rights, rights to consent to Fund action and any other rights pertaining to each Fund’s portfolio securities; provided, however, that any such exercises shall be subject to any policies, procedures or directives approved by the Board and provided to the Sub-Adviser;

Attending and participating in discussions and meetings with the Adviser with respect to Fund investment policies and procedures, and carrying out such investment policies and procedures as are approved by the Board or by the Adviser under authority delegated by the Board to the Adviser and provided to the Sub-Adviser;

Supplying reports, evaluations, analyses, statistical data and information to the Adviser, the Board or to the Funds’ officers and other service providers as the Adviser or the Board may reasonably request from time to time or as may be necessary or appropriate for the operation of the Trust as an open-end investment company or as necessary to comply with Section 3(a) of this Agreement;

Maintaining all required books and records with respect to the investment decisions and securities transactions for each Fund;

Furnishing any and all other services, subject to review by the Board, that the Adviser from time to time determines to be necessary or useful to perform its obligations under the Investment Management Services Agreement or as the Board may reasonably request from time to time.

3. Responsibilities of Sub-Adviser . In carrying out its obligations under this Agreement, the Sub-Adviser agrees that it will:

Comply with all applicable law, including but not limited to the 1940 Act and the Advisers Act, the rules and regulations of the Commission thereunder, and the conditions of any order affecting the Trust or a Fund issued thereunder;

Use the same skill and care in providing such services as it uses in providing services to other fiduciary accounts for which it has investment responsibilities;

The Sub-Adviser acknowledges that the Funds may engage in transactions with certain investment sub-advisers in the Columbia Funds Family (and their affiliated persons) in reliance on exemptions under Rule 10f-3, Rule 12d3-1, Rule 17a-10 and Rule 17e-1 under the 1940 Act. Accordingly, the Sub-Adviser hereby agrees that it will not consult with any other investment sub-adviser of a Columbia Fund in the Columbia Funds Family concerning transactions for a Fund in securities or other investments, other than for purposes of complying with the conditions of Rule 12d3-1(a) and (b). With respect to a Fund with one or more investment sub-advisers in addition to the Sub-Adviser, the Sub-Adviser shall be limited to providing investment advice only with respect to the portion of the Fund’s assets as the Adviser may determine from time to time, and shall not consult with any other

investment sub-adviser to the Fund that is a principal underwriter or an affiliated person of a principal underwriter concerning transactions for the Fund in securities or other investments.

Place, or arrange for the placement of, all orders pursuant to its investment determinations for the Funds either directly with the issuer or with any broker or dealer (including any broker or dealer affiliated with the Trust, the Adviser or any of their affiliates; with listings of such affiliated brokers and dealers to be provided to the Sub-Adviser by the Adviser on an annual basis, and more frequently as changes occur). In executing portfolio transactions and selecting brokers or dealers, the Sub-Adviser will use its best efforts to seek on behalf of each Fund the best overall terms available. In assessing the best overall terms available for any transaction, the Sub-Adviser shall consider all factors that it deems relevant, including the breadth of the market in the security, the price of the security, the financial condition and execution capability of the broker or dealer, and the reasonableness of the commission, if any, both for the specific transaction and on a continuing basis. In evaluating the best overall terms available, and in selecting the broker or dealer to execute a particular transaction, the Sub-Adviser may also consider whether such broker or dealer furnishes research and other information or services to the Sub-Adviser. To the extent permitted by law, and consistent with its obligation to seek best execution, the Sub-Adviser may, except where otherwise directed by the Board, execute transactions or pay a broker-dealer a commission or markup in excess of that which another broker-dealer might have charged for executing a transaction provided that the Sub-Adviser determines, in good faith, that the execution is appropriate or the commission or markup is reasonable in relation to the value of the brokerage and/or research services provided, viewed in terms of either that particular transaction or the Sub-Adviser’s overall responsibilities with respect to the Fund and other clients for which it acts as investment adviser; and

Adhere to the investment objective, strategies and policies and procedures of the Trust adopted on behalf of each Fund including, but not limited to, those stated in each of their prospectuses and statements of additional information.

4. Confidentiality of Information . Each party agrees that it will treat confidentially all information provided by another party regarding such other party’s business and operations which is not generally known by third parties nor otherwise generally disclosed publicly by such other party, including without limitation the investment activities or holdings of a Fund, except as is otherwise mutually agreed upon by the parties. Each party agrees that it will not unreasonably withhold its agreement to disclosure of investment activities or holdings. All confidential information provided by a party hereto shall not be disclosed to any unaffiliated third party without the prior consent of the providing party. The foregoing shall not apply to any information that is public when provided or thereafter becomes public through disclosure by the party about whom the information relates or becomes public without any wrongful act of the party providing such information or which is required to be disclosed by any regulatory authority in the lawful and appropriate exercise of its jurisdiction over a party, by any auditor of the parties hereto, by judicial or administrative process or by applicable law or regulation.

5. Services Not Exclusive . The services furnished by the Sub-Adviser hereunder are deemed not to be exclusive, and the Sub-Adviser shall be free to furnish similar services to others so long as its provision of services under this Agreement is not impaired thereby. To the extent that the purchase or sale of securities or other investments of the same issuer may be deemed by the Sub-Adviser to be suitable for two or more accounts managed by the Sub-Adviser, the available securities or investments may be allocated in a manner believed by the Sub-Adviser to be equitable to each account. It is recognized that in some cases this procedure may adversely affect the price paid or received by a Fund or the size of the position obtainable for or disposed of by a Fund.

6. Delivery of Documents . The Trust will provide the Sub-Adviser with copies, properly certified or authenticated, of each of the following:

the Trust’s Certificate of Trust, as filed with the Secretary of State of Delaware, and Declaration of Trust (such Declaration of Trust, as presently in effect and as from time to time amended, is herein called the “Declaration of Trust”);

the Trust’s Bylaws, if any;

the most recent prospectus(es) and statement(s) of additional information relating to each Fund (such prospectus(es) together with the related statement(s) of additional information, as presently in effect and all amendments and supplements thereto, are herein called the “Prospectus”); and

any and all applicable policies and procedures approved by the Board.

The Trust will promptly furnish the Sub-Adviser with copies of any and all amendments of or additions or supplements to the foregoing.

7. Books and Records . In compliance with the requirements of Rule 31a-3 under the 1940 Act, the Sub-Adviser hereby agrees that all records that it maintains for each Fund under this Agreement are the property of the Trust and further agrees to surrender promptly to the Trust or the Adviser any of such records upon request. The Sub-Adviser further agrees to preserve for the periods prescribed by Rule 31a-2 under the 1940 Act the records required to be maintained by it under this Agreement.

8. Expenses of the Funds . Except to the extent expressly assumed by the Sub-Adviser and except to any extent required by law to be paid or reimbursed by the Sub-Adviser, the Sub-Adviser shall have no duty to pay any ordinary operating expenses incurred in the organization and operation of the Funds. Ordinary operating expenses include, but are not limited to, brokerage commissions and other transaction charges, taxes, legal, auditing, printing, or governmental fees, other Fund service providers’ fees and expenses, expenses relating to the issue, sale (including any sales loads), redemption and repurchase of shares, expenses of registering and qualifying shares for sale, expenses relating to Board and shareholder meetings, and the cost of preparing and distributing reports and notices to shareholders. The Sub-Adviser shall pay all other expenses incurred by it in connection with its services under this Agreement.

accordance with Schedule I attached hereto. It is understood that the Adviser shall be solely responsible for compensating the Sub-Adviser for performing any of the duties delegated to the Sub-Adviser and the Sub-Adviser agrees that it shall have no claim against the Trust or any Fund with respect to compensation under this Agreement.

10. Liability of Sub-Adviser . The Sub-Adviser shall not be liable for any error of judgment or mistake of law or for any loss suffered by the Adviser or the Trust in connection with the performance of this Agreement, except that the Sub-Adviser shall be liable to the Adviser or the Trust for any loss resulting from a breach of fiduciary duty with respect to the receipt of compensation for services or any loss resulting from willful misfeasance, bad faith or negligence on the part of the Sub-Adviser in the performance of its duties or from reckless disregard by it of its obligations and duties under this Agreement.

11. Term and Approval . This Agreement will become effective as of the date set forth herein above, and shall continue in effect until the second anniversary of its effective date. This Agreement will become effective with respect to each additional Fund as of the date set forth on Schedule I when each such Fund is added thereto. The Agreement shall continue in effect for a Fund after the second anniversary of the effective date for successive annual periods ending on each anniversary of such date, provided that the continuation of the Agreement is specifically approved for the Fund at least annually:

(i) by the Board or (ii) by the vote of “a majority of the outstanding voting securities” of the Fund (as defined in Section 2(a)(42) of the 1940 Act); and

by the affirmative vote of a majority of the Trustees of the Trust who are not parties to this Agreement or “interested persons” (as defined in the 1940 Act) of a party to this Agreement (other than as Trustees of the Trust), by votes cast in person at a meeting specifically called for such purpose.

12. Termination . This Agreement may be terminated without payment of any penalty at any time by:

the Trust with respect to a Fund, by vote of the Board or by vote of a majority of a Fund’s outstanding voting securities, upon sixty (60) days’ written notice to the other parties to this Agreement; or

the Adviser or the Sub-Adviser with respect to a Fund, upon sixty(60) days’ written notice to the other parties to this Agreement.

Any party entitled to notice may waive the notice provided for herein. This Agreement shall automatically terminate in the event of its assignment, unless an order is issued by the Commission conditionally or unconditionally exempting such assignment from the provisions of Section 15(a) of the 1940 Act, in which event this Agreement shall remain in full force and effect subject to the terms of such order. For the purposes of this paragraph, the definitions contained in Section 2(a) of the 1940 Act and the applicable rules under the 1940 Act shall apply.

13. Code of Ethics . The Sub-Adviser represents that it has adopted a written code of ethics complying with the requirements of Rule 17j-1 under the 1940 Act and will provide the Adviser or the Trust with a copy of such code, any amendments or supplements thereto and its policies and/or procedures implemented to ensure compliance therewith.

14. Insurance . The Sub-Adviser shall maintain for the term of this Agreement and provide evidence thereof to the Trust or the Adviser a blanket bond and professional liability (error and omissions) insurance in an amount reasonably acceptable to Adviser.

15. Representations and Warranties . Each party to this Agreement represents and warrants that the execution, delivery and performance of its obligations under this Agreement are within its powers, have been duly authorized by all necessary actions and that this Agreement constitutes a legal, valid and binding obligation enforceable against it in accordance with its terms. The Sub-Adviser further represents and warrants that it is duly registered as an investment adviser under the Advisers Act.

16. Amendment of this Agreement . No provision of this Agreement may be changed, waived, discharged or terminated orally, except by an instrument in writing signed by the party against which enforcement of the change, waiver, discharge or termination is sought.

17. Notices . Any notices under this Agreement shall be in writing, addressed and delivered or mailed postage paid to such address as may be designated for the receipt of such notice. Until further notice, it is agreed that the address of the Trust shall be One Financial Center, Boston, Massachusetts, 02111, Attention: Secretary, that of the Adviser shall be 100 Federal Street, Boston, MA 02110, Attention: President, and that of the Sub-Adviser shall be Brandes Investment Partners, L.P., 11988 El Camino Real, San Diego, California 92130, Attention: General Counsel. The Sub-Adviser agrees to promptly notify the Adviser and the Trust, and the Adviser and the Trust agree to notify the Sub-Adviser, in writing of the occurrence of any event which could have a material impact on the performance of another party’s duties under this Agreement, including but not limited to (i) the occurrence of any event which could disqualify the Adviser or the Sub-Adviser from serving as an investment adviser pursuant to Section 9 of the 1940 Act; (ii) any material change in the notifying party’s business activities; (iii) any event that would constitute a change in control of the notifying party; (iv) any change in the portfolio manager or portfolio management team of a Fund; (v) the existence of any pending or threatened audit, investigation, examination, complaint or other inquiry (other than routine audits or regulatory examinations or inspections) relating to any Fund; and (vi) any material violation of the notifying party’s code of ethics.

18. Release . The names “Columbia Funds Series Trust” and “Trustees of Columbia Funds Series Trust” refer respectively to the Trust created by the Declaration of Trust and the Trustees as Trustees but not individually or personally. All parties hereto acknowledge and agree that any and all liabilities of the Trust arising, directly or indirectly, under this Agreement will be satisfied solely out of the assets of the Trust and that no Trustee, officer or shareholder shall be personally liable for any such liabilities. All persons dealing with any Fund of the Trust must look solely to the property belonging to such Fund for the enforcement of any claims against the Trust. Nothing in this Section 18 shall be deemed to limit the liabilities to which a Trustee, officer or shareholder of the Trust may be subject under applicable law arising from such person’s own wrongful conduct.

19. Miscellaneous . This Agreement contains the entire understanding of the parties hereto. Each provision of this Agreement is intended to be severable. If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby.

20. Governing Law . This Agreement shall be governed by, and construed in accordance with, Delaware law and the federal securities laws, including the 1940 Act and the Advisers Act.

21. Counterparts . This Agreement may be executed in any number of counterparts, each of which shall be deemed an original.

22. Use of the Name “Columbia Funds” . The Sub-Adviser agrees that it will not use the name “Columbia Funds”, any derivative thereof, or the name of the Adviser, the Trust or any Fund except in accordance with such policies and procedures as may be mutually agreed to in writing.

IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed by their officers designated below as of the day and year first above written.


COLUMBIA FUNDS SERIES TRUST
on behalf of the Funds

By:		/s/ Joseph F. DiMaria
Name:		Joseph F. DiMaria
Title:		Chief Accounting Officer

COLUMBIA MANAGEMENT INVESTMENT ADVISERS, LLC

By:		/s/ Amy K. Johnson
Name:		Amy K. Johnson
Title:		Senior Vice President

BRANDES INVESTMENT PARTNERS, L.P.

By:		/s/ Glenn R. Carlson
Name:		Glenn R. Carlson
Title:		Chief Executive Officer

Investment Sub-Advisory Agreement

SCHEDULE I

The Adviser shall pay the Sub-Adviser, as full compensation for services provided and expenses assumed hereunder, a sub-advisory fee for each Fund, computed daily and payable monthly at the annual rates listed below as a percentage of the average daily net assets of the Fund:


Fund	Rate of Compensation	Effective Date
Columbia Global Value Fund	0.50% of the first $1,000,000,000 in assets; 0.45% of assets in excess of $1,000,000,000	May 1, 2010

Current as of the 1 ^st day of May, 2010.


COLUMBIA FUNDS SERIES TRUST
on behalf of the Funds

By:		/s/ Joseph F. DiMaria
Name:		Joseph F. DiMaria
Title:		Chief Accounting Officer

COLUMBIA MANAGEMENT INVESTMENT ADVISERS, LLC

By:		/s/ Amy K. Johnson
Name:		Amy K. Johnson
Title:		Senior Vice President

BRANDES INVESTMENT PARTNERS, L.P.

By:		/s/ Glenn R. Carlson
Name:		Glenn R. Carlson
Title:		Chief Executive Officer

Schedule I to Investment Sub-Advisory Agreement

Exhibit (d)(5)

INVESTMENT SUB-ADVISORY AGREEMENT

COLUMBIA FUNDS SERIES TRUST

THIS AGREEMENT is made as of May 1, 2010, by and among COLUMBIA MANAGEMENT INVESTMENT ADVISERS, LLC (formerly, RiverSource Investments, LLC), a Minnesota limited liability company (the “Adviser”), MARSICO CAPITAL MANAGEMENT, LLC, a Delaware limited liability company (the “Sub-Adviser”), and COLUMBIA FUNDS SERIES TRUST, a Delaware statutory trust (the “Trust”), on behalf of those series of the Trust now or hereafter identified on Schedule I (each, a “Fund” and collectively, the “Funds”).

WHEREAS, the Adviser is registered with the Commission as an investment adviser under the Investment Advisers Act of 1940, as amended (the “Advisers Act”);

WHEREAS, the Sub-Adviser is also registered with the Commission as an investment adviser under the Advisers Act;

NOW, THEREFORE, in consideration of the promises and mutual covenants herein contained, it is agreed among the parties hereto as follows:

2. Services of Sub-Adviser . The Sub-Adviser shall perform all services necessary for the management of the portfolio investments of each Fund, including but not limited to:

Managing the investment and reinvestment of all assets, now or hereafter acquired by each Fund, including determining what securities and other investments are to be purchased or sold for each Fund and executing transactions accordingly;

Transmitting trades to each Fund’s custodian for settlement in accordance with each Fund’s procedures and as may be directed by the Trust;

Assisting in the preparation of all shareholder communications, including shareholder reports, and participating in shareholder relations;

Exercising upon authority delegated by the Adviser or providing support to the Adviser or the Trust in conjunction with exercising voting rights, rights to consent to Fund action and any other rights pertaining to each Fund’s portfolio securities; provided, however, that the Sub-Adviser shall be given reasonable prior notice should the Adviser of the Trust determine to direct the Sub-Adviser in its exercise of such rights;

Making recommendations to the Adviser and the Board with respect to Fund investment policies and procedures, and carrying out such investment policies and procedures as are approved by the Board or by the Adviser under authority delegated by the Board to the Adviser;

Supplying reports, evaluations, analyses, statistical data and information within its possession or control to the Adviser, the Board or to the Funds’ officers and other service providers as the Adviser or the Board may reasonably request from time to time or as may be necessary or appropriate for the operation of the Trust as an open-end investment company or as necessary to comply with Section 3(a) of this Agreement;

Maintaining all required books and records with respect to the investment decisions and securities transactions for each Fund;

Furnishing any and all other services, subject to review by the Board, that the Adviser from time to time reasonably determines to be necessary to perform its obligations under the Investment Management Services Agreement or as the Board may reasonably request from time to time.

3. Responsibilities of Sub-Adviser . In carrying out its obligations under this Agreement, the Sub-Adviser agrees that it will:

Comply with all applicable law, including but not limited to the 1940 Act and the Advisers Act, the rules and regulations of the Commission thereunder and the conditions of any order affecting the Trust or a Fund issued thereunder;

Use the same skill and care in providing such services as it uses in providing services to other fiduciary accounts for which it has investment responsibilities;

Adviser may determine from time to time, and shall not consult with any other investment sub-adviser to the Fund that is a principal underwriter or an affiliated person of a principal underwriter concerning transactions for the Fund in securities or other investments.

Not make loans to any person for the purpose of purchasing or carrying Fund interests;

Place, or arrange for the placement of, all orders pursuant to its investment determinations for the Funds either directly with the issuer or with any broker or dealer (including any affiliated broker or dealer). In executing portfolio transactions and selecting brokers or dealers, the Sub-Adviser will use its best efforts to seek on behalf of each Fund the best overall terms available. In assessing the best overall terms available for any transaction, the Sub-Adviser shall consider all factors that it deems relevant, including the breadth of the market in the security, the price of the security, the financial condition and execution capability of the broker or dealer, and the reasonableness of the commission, if any, both for the specific transaction and on a continuing basis. In evaluating the best overall terms available, and in selecting the broker or dealer to execute a particular transaction, the Sub-Adviser may also consider whether such broker or dealer furnishes research and other information or services to the Sub-Adviser. To the extent permitted by law, and consistent with its obligation to seek best execution, the Sub-Adviser may, except where otherwise directed by the Board, execute transactions or pay a broker-dealer a commission or markup in excess of that which another broker-dealer might have charged for executing a transaction provided that the Sub-Adviser determines in good faith, that the execution is appropriate or the commission or markup is reasonable in relation to the value of the brokerage and/or research services provided, viewed in terms of either that particular transaction or the Sub-Adviser’s overall responsibilities with respect to the Fund and other clients for which it acts as investment adviser; and

Adhere to the investment objective, strategies, policies and procedures of the Trust adopted on behalf of each Fund.

4. Confidentiality of Information . Each party agrees that it will treat confidentially all information provided by another party regarding such other party’s business and operations, including without limitation the investment activities or holdings of a Fund. All confidential information provided by a party hereto shall not be disclosed to any unaffiliated third party without the prior consent of the providing party. The foregoing shall not apply to any information that is public when provided or thereafter becomes public or which is required to be disclosed by any regulatory authority in the lawful and appropriate exercise of its jurisdiction over a party, by any auditor of the parties hereto, by judicial or administrative process or otherwise by applicable law or regulation.

Adviser, the available securities or investments may be allocated in a manner believed by the Sub-Adviser to be equitable to each account. It is recognized that in some cases this procedure may adversely affect the price paid or received by a Fund or the size of the position obtainable for or disposed of by a Fund.

6. Delivery of Documents . The Trust will provide the Sub-Adviser with copies, properly certified or authenticated, of each of the following:

the Trust’s Bylaws, if any;

any and all applicable policies and procedures approved by the Board.

The Trust will promptly furnish the Sub-Adviser with copies of any and all amendments of or additions or supplements to the foregoing.

8. Expenses of the Funds . Except to the extent expressly assumed by the Sub-Adviser and except to any extent required by law to be paid or reimbursed by the Sub-Adviser, the Sub-Adviser shall have no duty to pay any ordinary operating expenses incurred in the organization and operation of the Funds. Ordinary operating expenses include, but are not limited to, brokerage commissions and other transaction charges, taxes, legal, auditing, printing, or governmental fees, other Fund service providers’ fees and expenses, expenses of issue, sale, redemption and repurchase of shares, expenses of registering and qualifying shares for sale, expenses relating to Board and shareholder meetings and the cost of preparing and distributing reports and notices to shareholders. The Sub-Adviser shall pay all other expenses incurred by it in connection with its services under this Agreement.

9. Compensation . Except as otherwise provided herein, for the services provided to each Fund and the expenses assumed pursuant to this Agreement, the Adviser will pay the Sub-Adviser and the Sub-Adviser will accept as full compensation therefor a fee determined in accordance with Schedule I attached hereto. It is understood that the Adviser shall be solely responsible for compensating the Sub-Adviser for performing any of the duties delegated to the Sub-Adviser and the Sub-Adviser agrees that it shall have no claim against the Trust or any Fund with respect to compensation under this Agreement.

10. Liability of Sub-Adviser . The Sub-Adviser shall not be liable for any error of judgment or mistake of law or for any loss suffered by the Adviser or the Trust in connection with the performance of its duties under this Agreement, except a loss resulting from a breach of fiduciary duty with respect to the receipt of compensation for services, from willful misfeasance, bad faith or negligence on the part of the Sub-Adviser or any of its officers, directors, employees or agents, in connection with the performance of their duties under this Agreement, from reckless disregard by it or its officers, directors, employees or agents of any of their obligations and duties under this Agreement or from any violations of securities laws, rules, regulations, statutes and codes, whether federal or state, by the Sub-Adviser or any of its officers, directors, employees or agents.

(i) by the Board or (ii) by the vote of “a majority of the outstanding voting securities” of the Fund (as defined in Section 2(a)(42) of the 1940 Act); and

12. Termination . This Agreement may be terminated without payment of any penalty at any time by:

the Adviser or the Sub-Adviser with respect to a Fund, upon sixty (60) days’ written notice to the other parties to this Agreement.

17. Notices . Any notices under this Agreement shall be in writing, addressed and delivered or mailed postage paid to such address as may be designated for the receipt of such notice. Until further notice, it is agreed that the address of the Trust shall be One Financial Center, Boston, Massachusetts, 02111, Attention: Secretary, that of the Adviser shall be 100 Federal Street, Boston, MA 02110, Attention: President, and that of the Sub-Adviser shall be 1200 17th Street, Suite 1600, Denver, Colorado 80202, Attention: General Counsel. The Sub-Adviser agrees to promptly notify the Adviser and the Trust in writing of the occurrence of any event which could have a material impact on the performance of its duties under this Agreement, including but not limited to (i) the occurrence of any event which could disqualify the Sub-Adviser from serving as an investment adviser pursuant to Section 9 of the 1940 Act; (ii) any material change in the Sub-Adviser’s business activities; (iii) any event that would constitute a change in control of the Sub-Adviser; (iv) any change in the portfolio manager of a Fund; (v) the existence of any pending or threatened audit, investigation, examination, complaint or other inquiry (other than routine audits or regulatory examinations or inspections) relating to any Fund; and (vi) any material violation of the Sub-Adviser’s code of ethics.

20. Governing Law . This Agreement shall be governed by, and construed in accordance with, Delaware law and the federal securities laws, including the 1940 Act and the Advisers Act.

21. Counterparts . This Agreement may be executed in any number of counterparts, each of which shall be deemed an original.

22. Use of the Name “Marsico” . Sub-Adviser hereby consents to and grants a non-exclusive license for the use by the Trust to the phrase “Marsico Capital”, the identifying word “Marsico” in the name of the Funds and any logo or symbol authorized by the Sub-Adviser. Such consent is conditioned upon the Trust’s employment of Sub-Adviser or its affiliates as sub-investment adviser to the Funds. Sub-Adviser may from time to time use the phrase “Marsico Capital” or the identifying word “Marsico” or logos or symbols used by Sub-Adviser in other connections and for other purposes, including without limitation in the names of other investment companies, corporations or businesses that it may manage, advise, sponsor or own or in which it may have a financial interest. Sub-Adviser may require the Trust to cease using the phrase “Marsico Capital” or the identifying word “Marsico” in the name of the Funds or any logo or symbol authorized by Sub-Adviser if the Trust ceases to employ Sub-Adviser or an affiliate thereof as sub-investment adviser.

23. Use of the Name “Columbia Funds” . The Sub-Adviser agrees that it will not use the name “Columbia Funds”, any derivative thereof, or the name of the Adviser, the Trust or any Fund except in accordance with such policies and procedures as may be mutually agreed to in writing. The parties hereto agree that the Sub-Adviser shall be permitted to include in its promotional or marketing literature statements to the effect that it manages the portfolio investments of any Columbia Fund(s) with respect to which it serves as investment sub-adviser.

IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed by their officers designated below as of the day and year first above written.


COLUMBIA FUNDS SERIES TRUST
on behalf of the Funds

By:		/s/ Joseph F. DiMaria
Name:		Joseph F. DiMaria
Title:		Chief Accounting Officer

COLUMBIA MANAGEMENT INVESTMENT ADVISERS, LLC

By:		/s/ Amy K. Johnson
Name:		Amy K. Johnson
Title:		Senior Vice President

MARSICO CAPITAL MANAGEMENT, LLC

By:		/s/ Christopher J. Marsico
Name:		Christopher J. Marsico
Title:		President

Investment Sub-Advisory Agreement

SCHEDULE I

Specified International Funds

The Adviser shall pay the Sub-Adviser, as full compensation for services provided and expenses assumed hereunder, a sub-advisory fee for each Fund set forth in the below table, computed daily and payable monthly at the annual rates listed below as a percentage of the aggregate average daily net assets of Columbia international equity funds or portions thereof sub-advised by the Sub-Adviser (“International Funds”)*:


Fund	Rate of Compensation	Effective Date
Columbia Marsico International Opportunities Fund	• 0.45% on aggregate assets of the International Funds up to $6 billion • 0.40% on aggregate assets of the International Funds between $6 billion and $10 billion • 0.35% on aggregate assets of the International Funds above $10 billion	May 1, 2010

Columbia Multi-Advisor International Equity Fund	• 0.45% on aggregate assets of the International Funds up to $6 billion • 0.40% on aggregate assets of the International Funds between $6 billion and $10 billion • 0.35% on aggregate assets of the International Funds above $10 billion	May 1, 2010

For purposes of this fee calculation, the assets sub-advised by the Sub-Adviser in the following Columbia Funds will be aggregated: (i) Columbia Marsico International Opportunities Fund; (ii) Columbia Multi-Advisor International Equity Fund; (iii) Columbia Marsico International Opportunities Fund, Variable Series; and (iv) any future Columbia international equity fund sub-advised by the Sub-Adviser which the Adviser and the Sub-Adviser mutually agree in writing.

*****

Schedule I to Investment Sub-Advisory Agreement

Specified U.S. Funds

The Adviser shall pay the Sub-Adviser, as full compensation for services provided and expenses assumed hereunder, a sub-advisory fee for each Fund set forth in the below table, computed daily and payable monthly at the annual rates listed below as a percentage of the aggregate average daily net assets of Columbia U.S. equity funds or portions thereof sub-advised by the Sub-Adviser (“U.S. Funds”)**:


Fund	Rate of Compensation	Effective Date
Columbia Marsico 21 ^st Century Fund	• 0.45% on aggregate assets of the U.S. Funds up to $18 billion • 0.40% on aggregate assets of the U.S. Funds between $18 billion and $21 billion • 0.35% on aggregate assets of the U.S. Funds above $21 billion	May 1, 2010

Columbia Marsico Focused Equities Fund	• 0.45% on aggregate assets of the U.S. Funds up to $18 billion • 0.40% on aggregate assets of the U.S. Funds between $18 billion and $21 billion • 0.35% on aggregate assets of the U.S. Funds above $21 billion	May 1, 2010

Columbia Marsico Growth Fund	• 0.45% on aggregate assets of the U.S. Funds up to $18 billion • 0.40% on aggregate assets of the U.S. Funds between $18 billion and $21 billion • 0.35% on aggregate assets of the U.S. Funds above $21 billion	May 1, 2010

**	For purposes of this fee calculation, the assets sub-advised by the Sub-Adviser in the following Columbia Funds will be aggregated: (i) Columbia Marsico 21 ^st Century Fund; (ii) Columbia Marsico Focused Equities Fund; (iii) Columbia Marsico 21 ^st Century Fund,

Schedule I to Investment Sub-Advisory Agreement

Variable Series; (iv) Columbia Marsico Growth Fund, Variable Series; (v) Columbia Marsico Focused Equities Fund, Variable Series; (vi) Columbia Marsico Growth Fund; and (vii) any future Columbia U.S. equity fund sub-advised by the Sub-Adviser which the Adviser and the Sub-Adviser mutually agree in writing.

*****

Schedule I to Investment Sub-Advisory Agreement

Other Funds

Fund

Rate of

Compensation

Effective Date

Columbia Marsico Global Fund

• 0.45% on aggregate assets of the Fund up to $1.5 billion

• 0.40% on aggregate assets of the Fund between $1.5 billion and $3 billion

• 0.35% on aggregate assets of the Fund above $3 billion

May 1, 2010

Current as of the 1 ^st day of May, 2010.


COLUMBIA FUNDS SERIES TRUST
on behalf of the Funds

By:		/s/ Joseph F. DiMaria
Name:		Joseph F. DiMaria
Title:		Chief Accounting Officer

COLUMBIA MANAGEMENT INVESTMENT ADVISERS, LLC

By:		/s/ Amy K. Johnson
Name:		Amy K. Johnson
Title:		Senior Vice President

MARSICO CAPITAL MANAGEMENT, LLC

By:		/s/ Christopher J. Marsico
Name:		Christopher J. Marsico
Title:		President

Schedule I to Investment Sub-Advisory Agreement

Exhibit (d)(6)

INVESTMENT SUB-ADVISORY AGREEMENT

COLUMBIA FUNDS SERIES TRUST

THIS AGREEMENT is made as of May 1, 2010, by and between COLUMBIA MANAGEMENT INVESTMENT ADVISERS, LLC (formerly, RiverSource Investments, LLC), a Minnesota limited liability company (the “Adviser”), MACKAY SHIELDS LLC, a Delaware limited liability company (the “Sub-Adviser”), and COLUMBIA FUNDS SERIES TRUST, a Delaware statutory trust (the “Trust”), on behalf of those series of the Trust now or hereafter identified on Schedule I (each a “Fund” and collectively, the “Funds”).

WHEREAS, the Adviser is registered with the Commission as an investment adviser under the Investment Advisers Act of 1940, as amended (the “Advisers Act”);

WHEREAS, the Sub-Adviser is also registered with the Commission as an investment adviser under the Advisers Act;

NOW, THEREFORE, in consideration of the promises and mutual covenants herein contained, it is agreed between the parties hereto as follows:

1. Appointment of Sub-Adviser . The Adviser hereby appoints the Sub-Adviser and the Sub-Adviser hereby agrees to manage the portfolio investments of each Fund subject to the terms of this Agreement and subject to the supervision of the Adviser and the Board.

2. Services of Sub-Adviser . The Sub-Adviser shall perform all services necessary for the management of the portfolio investments of each Fund, including but not limited to:

Transmitting trades to each Fund’s custodian for settlement in accordance with each Fund’s procedures and as may be directed by the Trust;

Assisting in the preparation of all shareholder communications, including shareholder reports, and participating in shareholder relations;

Maintaining all books and records with respect to the investment decisions and securities transactions for each Fund required by applicable law;

3. Responsibilities of Sub-Adviser . In carrying out its obligations under this Agreement, the Sub-Adviser agrees that it will:

Use the same skill and care in providing such services as it uses in providing services to other fiduciary accounts for which it has investment responsibilities;

Not make loans to any person for the purpose of purchasing or carrying Fund shares;

Place, or arrange for the placement of, all orders pursuant to its investment determinations for the Funds either directly with the issuer or with any broker or dealer (including any affiliated broker or dealer). In executing portfolio transactions and selecting brokers or dealers, the Sub-Adviser will use its best efforts to seek on behalf of each Fund the best overall terms available. In assessing the best overall terms available for any transaction, the Sub-Adviser shall consider all factors that it deems relevant, including the breadth of the market in the security, the price of the security, the financial condition and execution capability of the broker or dealer, and the reasonableness of the commission, if any, both for the specific transaction and on a continuing basis. In evaluating the best overall terms available, and in selecting the broker or dealer to execute a particular transaction, the Sub-Adviser may also consider whether such broker or dealer furnishes research and other information or services to the Sub-Adviser. To the extent permitted by law, and consistent with its obligation to seek best execution, the Sub-Adviser may, except where otherwise directed by the Board, execute transactions or pay a broker-dealer a commission or markup in excess of that which another broker-dealer might have charged for executing a transaction provided that the Sub-Adviser determines, in good faith, that the execution is appropriate or the commission or markup is reasonable in relation to the value of the brokerage and/or research services provided, viewed in terms of either that particular transaction or the Sub-Adviser’s overall responsibilities with respect to the Fund and other clients for which it acts as investment adviser;

Adhere to the investment objective, strategies and policies and procedures of the Trust adopted on behalf of each Fund; and

Meet the service level performance standards that the parties may agree to from time to time.

4. Confidentiality of Information . Each party agrees that it will treat confidentially all information provided by another party regarding such other party’s business and operations, including without limitation the investment activities or holdings of a Fund. All confidential information provided by a party hereto shall not be disclosed to any unaffiliated third party without the prior consent of the providing party. The foregoing shall not apply to any information that is public when provided or thereafter becomes public or which is required to be disclosed by any regulatory authority in the lawful and appropriate exercise of its jurisdiction over a party, by any auditor of the parties hereto, by judicial or administrative process or otherwise by applicable law or regulation.

5. Services Not Exclusive . The services furnished by the Sub-Adviser hereunder are deemed not to be exclusive, and the Sub-Adviser shall be free to furnish similar services to others so long as its provision of services under this Agreement is not impaired thereby. To the extent that the purchase or sale of securities or other investments of the same issuer may be deemed by the Sub-Adviser to be suitable for two or more accounts managed by the Sub-Adviser, the available securities or investments may be allocated in a manner believed by the Sub-Adviser to be equitable to each account. It is recognized that in some cases this procedure may adversely affect the price paid or received by a Fund or the size of the position obtainable for or disposed of by a Fund.

6. Delivery of Documents . The Trust will provide the Sub-Adviser with copies, properly certified or authenticated, of each of the following:

any and all applicable policies and procedures approved by the Board.

The Trust will promptly furnish the Sub-Adviser with copies of any and all amendments of or additions or supplements to the foregoing.

7. Books and Records . In compliance with the requirements of Rule 31a-3 under the 1940 Act, the Sub-Adviser hereby agrees that all records that it maintains for each Fund under this Agreement are the property of the Trust and further agrees to surrender promptly to the Trust or the Adviser any of such records upon request. The Sub-Adviser further agrees to preserve for the periods prescribed by Rule 31a-2 under the 1940 Act the records required to be maintained by Rule 31a-1 under the 1940 Act.

8. Expenses of the Funds . Except to the extent expressly assumed by the Sub-Adviser and except to any extent required by law to be paid or reimbursed by the Sub-Adviser, the Sub-Adviser shall have no duty to pay any ordinary operating expenses incurred in the organization and operation of the Funds. Ordinary operating expenses include, but are not limited to, brokerage commissions and other transaction charges, taxes, legal, auditing, printing, or governmental fees, other Fund service providers’ fees and expenses, including those related to third party pricing of portfolio securities, expenses of issue, sale, redemption and repurchase of shares, expenses of registering and qualifying shares for sale, expenses relating to Board and shareholder meetings, and the cost of preparing and distributing reports and notices to shareholders. The Sub-Adviser shall pay all other expenses directly incurred by it in connection with its services under this Agreement.

9. Compensation . Except as otherwise provided herein, for the services provided to each Fund and the expenses assumed pursuant to this Agreement, the Adviser will pay the Sub-Adviser and the Sub-Adviser will accept as full compensation therefor a fee determined in accordance with Schedule I attached hereto. It is understood that the Adviser shall be solely responsible for compensating the Sub-Adviser for performing any of the duties delegated to the Sub-Adviser and the Sub-Adviser agrees that it shall have no claim against the Trust or any Fund with respect to compensation under this Agreement. To the extent that the advisory fee that the Trust would be obligated to pay to the Adviser with respect to a Fund pursuant to the Investment Management Services Agreement is reduced or reimbursed, the fee that the Sub-Adviser would otherwise receive pursuant to this Agreement shall be reduced or reimbursed proportionately.

10. Liability of Sub-Adviser . The Sub-Adviser shall not be liable for any error of judgment or mistake of law or for any loss suffered by the Adviser or the Trust in connection with the

performance of its duties under this Agreement, except a loss resulting from a breach of fiduciary duty with respect to the receipt of compensation for services, from willful misfeasance, bad faith or negligence on the part of the Sub-Adviser or any of its officers, directors or employees, in connection with the performance of their duties under this Agreement, from reckless disregard by it or its officers, directors or employees of any of their obligations and duties under this Agreement, or from any violations of securities laws, rules, regulations, statutes and codes, whether federal or state, by the Sub-Adviser or any of its officers, directors or employees.

11. Indemnification . The Sub-Adviser shall indemnify and hold harmless the Funds and the Adviser from and against any and all direct or indirect claims, losses, liabilities or damages (including reasonable attorney’s fees and other related expenses) resulting from a breach of fiduciary duty with respect to the receipt of compensation for services, from willful misfeasance, bad faith or negligence on the part of the Sub-Adviser or any of its officers, directors or employees, in connection with the performance of their duties under this Agreement, from reckless disregard by it or its officers, directors or employees of any of their obligations and duties under this Agreement, or resulting from any violations of securities laws, rules, regulations, statutes and codes, whether federal or state, by the Sub-Adviser or any of its officers, directors or employees; provided, however, that the Sub-Adviser shall not be required to indemnify or otherwise hold the Funds or the Adviser harmless under this Section 11 where the claim against, or the loss, liability or damage experienced by the Funds or the Adviser, is caused by or is otherwise directly related to the Funds’ or the Adviser’s own willful misfeasance, bad faith or negligence, or to the reckless disregard by the Funds or the Adviser of their duties under this Agreement.

12. Term and Approval . This Agreement will become effective as of the date set forth herein above, and shall continue in effect until the second anniversary of its effective date. This Agreement will become effective with respect to each additional Fund as of the date set forth on Schedule I when each such Fund is added thereto. The Agreement shall continue in effect for a Fund after the second anniversary of the effective date for successive annual periods ending on each anniversary of such date, provided that the continuation of the Agreement is specifically approved for the Fund at least annually:

(i) by the Board or (ii) by the vote of “a majority of the outstanding voting securities” of the Fund (as defined in Section 2(a)(42) of the 1940 Act); and

13. Termination . This Agreement may be terminated without payment of any penalty at any time by:

the Adviser or the Sub-Adviser with respect to a Fund, upon sixty (60) days’ written notice to the other parties to this Agreement.

14. Code of Ethics . The Sub-Adviser represents that it has adopted a written code of ethics complying with the requirements of Rule 17j-1 under the 1940 Act and will provide the Adviser or the Trust with a copy of such code, any amendments or supplements thereto and its policies and/or procedures implemented to ensure compliance therewith.

15. Insurance . The Sub-Adviser shall maintain for the term of this Agreement and provide evidence thereof to the Trust or the Adviser a blanket bond and professional liability (error and omissions) insurance in an amount reasonably acceptable to Adviser.

16. Representations and Warranties . Each party to this Agreement represents and warrants that the execution, delivery and performance of its obligations under this Agreement are within its powers, have been duly authorized by all necessary actions and that this Agreement constitutes a legal, valid and binding obligation enforceable against it in accordance with its terms. The Sub-Adviser further represents and warrants that it is duly registered as an investment adviser under the Advisers Act.

17. Amendment of this Agreement . No provision of this Agreement may be changed, waived, discharged or terminated orally, except by an instrument in writing signed by the party against which enforcement of the change, waiver, discharge or termination is sought.

18. Notices . Any notices under this Agreement shall be in writing, addressed and delivered or mailed postage paid to such address as may be designated for the receipt of such notice. Until further notice, it is agreed that the address of the Trust shall be One Financial Center, Boston, Massachusetts, 02111, Attention: Secretary, that of the Adviser shall be 100 Federal Street, Boston, MA 02110, Attention: President, and that of the Sub-Adviser shall be MacKay Shields LLC, 9 West 57th Street, New York, New York 10019, Attention: General Counsel. The Sub-Adviser agrees to promptly notify the Adviser and the Trust in writing of the occurrence of any event which could have a material impact on the performance of its duties under this Agreement, including but not limited to (i) the occurrence of any event which could disqualify the Sub-Adviser from serving as an investment adviser pursuant to Section 9 of the 1940 Act; (ii) any material change in the Sub-Adviser’s business activities; (iii) any event that would constitute a change in control of the Sub-Adviser; (iv) any change in the portfolio manager or portfolio management team of a Fund; (v) the existence of any pending or threatened audit, investigation, examination, complaint or other inquiry (other than routine audits or regulatory examinations or inspections) relating to any Fund; and (vi) any material violation of the Sub-Adviser’s code of ethics.

19. Release . The names “Columbia Funds Series Trust” and “Trustees of Columbia Funds Series Trust” refer respectively to the Trust created by the Declaration of Trust and the Trustees as Trustees but not individually or personally. All parties hereto acknowledge and agree that any and all liabilities of the Trust arising, directly or indirectly, under this Agreement will be satisfied solely out of the assets of the Trust and that no Trustee, officer or shareholder shall be

personally liable for any such liabilities. All persons dealing with any Fund of the Trust must look solely to the property belonging to such Fund for the enforcement of any claims against the Trust.

20. Miscellaneous . This Agreement contains the entire understanding of the parties hereto. Each provision of this Agreement is intended to be severable. If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby.

21. Governing Law . This Agreement shall be governed by, and construed in accordance with, Delaware law and the federal securities laws, including the 1940 Act and the Advisers Act.

22. Counterparts . This Agreement may be executed in any number of counterparts, each of which shall be deemed an original.

23. Use of the Name “Columbia Funds” . The Sub-Adviser agrees that it will not use the name “Columbia Funds”, any derivative thereof, or the name of the Adviser, the Trust or any Fund except in accordance with such policies and procedures as may be mutually agreed to in writing.

IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed by their officers designated below as of the day and year first above written.


COLUMBIA FUNDS SERIES TRUST
on behalf of the Funds

By:		/s/ Joseph F. DiMaria
Name:		Joseph F. DiMaria
Title:		Chief Accounting Officer

COLUMBIA MANAGEMENT INVESTMENT ADVISERS, LLC

By:		/s/ Amy K. Johnson
Name:		Amy K. Johnson
Title:		Senior Vice President

MACKAY SHIELDS LLC

By:		/s/ Lucille Protas
Name:		Lucille Protas
Title:		Acting Chief Executive Officer

Investment Sub-Advisory Agreement

SCHEDULE I

Fund

Rate of

Compensation

Effective Date

Columbia High Income Fund

• 0.40% of average daily net assets up to and including $100 million

• 0.375% of average daily net assets in excess of $100 million and up to and including $200 million

• 0.35% of average daily net assets in excess of $200 million

May 1, 2010

Current as of the 1 ^st day of May, 2010.


COLUMBIA FUNDS SERIES TRUST
on behalf of the Funds

By:		/s/ Joseph F. DiMaria
Name:		Joseph F. DiMaria
Title:		Chief Accounting Officer

COLUMBIA MANAGEMENT INVESTMENT ADVISERS, LLC

By:		/s/ Amy K. Johnson
Name:		Amy K. Johnson
Title:		Senior Vice President

MACKAY SHIELDS LLC

By:		/s/ Lucille Protas
Name:		Lucille Protas
Title:		Acting Chief Executive Officer

Schedule I to Investment Sub-Advisory Agreement

Exhibit (e)(1)

DISTRIBUTION AGREEMENT

COLUMBIA FUNDS SERIES TRUST

THIS AGREEMENT is made as of May 1, 2010, by and between COLUMBIA FUNDS SERIES TRUST, a Delaware statutory trust, (the “Trust”) on behalf of each series of the Trust now or hereafter identified on Schedule I (each, a “Fund” and collectively, the “Funds”), and Columbia Management Investment Distributors, Inc. (formerly, RiverSource Fund Distributors, Inc.), a Delaware corporation (the “Distributor”). Absent written notification to the contrary by either the Trust or the Distributor, each new investment portfolio established in the future shall automatically become a “Fund” for all purposes hereunder and shares of each new class established in the future shall automatically become “Shares” for all purposes hereunder as if set forth on Schedule I.

WHEREAS, the Trust is registered with the Securities and Exchange Commission (the “SEC”) as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”);

WHEREAS, the Trust desires to retain the Distributor as the exclusive distributor of the units of beneficial interest in all classes of shares (“Shares”) of the Funds, and the Distributor is willing to render such services; and

WHEREAS, the Distributor is registered as a broker-dealer under the Securities Exchange Act of 1934, as amended (the “1934 Act”) and is a member of the Financial Industry Regulatory Authority, Inc. (the “FINRA”).

NOW THEREFORE, in consideration of the promises and mutual covenants herein contained, it is agreed between the parties hereto as follows:

1. Services as Distributor .

1.1. The Distributor will act as agent for the distribution of Shares in accordance with any instructions of the Trust’s Board of Trustees and with the Trust’s registration statement then in effect under the Securities Act of 1933, as amended (the “1933 Act”), and will transmit promptly any orders properly received by it for the purchase or redemption of Shares to the Trust or its transfer agent, or their designated agents. As used in this Agreement, the term “registration statement” shall mean any registration statement, specifically including, among other items, any then-current prospectus together with any related then-current statement of additional information, filed with the SEC with respect to Shares, and any amendments and supplements thereto which at any time shall have been filed.

1.2. The Distributor agrees to use appropriate efforts to solicit orders for the sale of Shares and will undertake such advertising and promotion, as it believes appropriate in connection with such solicitation. The Distributor agrees to offer and sell Shares at the applicable public offering price or net asset value next determined after an order is received. The Trust understands that the Distributor is and may in the future be the distributor of shares of other investment company portfolios including portfolios having investment objectives similar to those of the Funds. The Trust further understands that existing and future investors in the Funds may invest in shares of such other portfolios. The Trust agrees that the Distributor’s duties to such portfolios shall not be deemed in conflict with its duties to the Trust under this paragraph 1.2.

1.3. The Distributor shall, at its own expense, finance such activities as it deems reasonable and which are primarily intended to result in the sale of Shares, including, but not limited to, advertising, compensation of underwriters, dealers and sales personnel, the printing and mailing of prospectuses to other than current shareholders, and the printing and mailing of sales literature.

1.4. The Trust shall be responsible for expenses relating to the execution of any and all documents and the furnishing of any and all information and otherwise taking, or causing to be taken, all actions that may be reasonably necessary in connection with the registration of Shares under the 1933 Act and the Trust under the 1940 Act and the qualification of Shares for sale under the so-called “blue sky” laws in such states as the Trust directs and in such states as the Distributor may recommend to the Trust which the Trust approves, and the Trust shall pay all fees and other expenses incurred in connection with such registration and qualification. The Trust shall be also responsible for the preparation, printing and distribution of prospectuses and statements of additional information to shareholders and the direct expenses of the issue of Shares.

1.5. The Distributor shall be responsible for reviewing and providing advice on all sales literature ( e.g ., advertisements, brochures and shareholder communications) with respect to each of the Funds, and shall file with the FINRA or the appropriate regulators all such materials as are required to be filed under applicable laws and regulations in compliance with such laws and regulations. In addition, the Distributor will provide sufficient personnel, during normal business hours, reasonably necessary to respond to telephone questions with respect to the Funds.

1.6. In connection with all matters relating to this Agreement, the Trust and the Distributor agree to comply with all applicable laws, rules and regulations, including, without limitation, all rules and regulations made or adopted pursuant to the 1933 Act, the 1934 Act, the 1940 Act, the regulations of the FINRA and all other applicable federal and state laws, rules and regulations. The Distributor agrees to provide the Trust with such certifications, reports and other information as the Trust may reasonably request from time to time to assist it in complying with, and monitoring for compliance with, such laws, rules and regulations.

1.7. Whenever in their judgment such action is warranted by unusual market, economic or political conditions, or by other circumstances of any kind, the Trust’s officers may decline to accept any orders for, or make any sales of Shares until such time as those officers deem it advisable to accept such orders and to make such sales.

1.8. The Trust shall furnish from time to time , for use in connection with the sale of Shares, such information with respect to the Funds and Shares as the Distributor may reasonably request and the Trust warrants that such information shall be true and correct. Without limiting the foregoing, the Trust shall also furnish the Distributor upon request with: (a) audited annual and unaudited semi-annual statements of the Trust’s books and accounts with respect to each Fund, and (b) from time to time such additional information regarding the Funds’ financial condition as the Distributor may reasonably request.

1.9. The Trust may from time to time adopt one or more distribution plans pursuant to Rule 12b-1 under the 1940 Act. As compensation for services rendered hereunder, the Distributor shall be entitled to receive from the Trust the payments set forth on Schedule II attached hereto, as the same may be amended from time to time by agreement of the parties. In addition, the Distributor shall be entitled to retain any front-end sales charge imposed upon the sale of Shares (and reallow a portion thereof) as specified in the Trust’s registration statement and the Trust shall pay to the Distributor the proceeds from any contingent deferred sales charge imposed on the redemption of Shares as specified in the Trust’s registration statement. Distributor, from time to time, may assign to any third party all or any portion of amounts payable to the Distributor under this Agreement.

1.10. The Distributor shall prepare reports for the Board of Trustees of the Trust regarding its activities under this Agreement as from time to time shall be reasonably requested by the Board, including reports regarding the use of Rule 12b-1 payments received by the Distributor, if any.

1.11. The Distributor is authorized to enter into written agreements with banks, broker/dealers and other financial institutions, based on such form(s) of sales support agreements as may be approved by the Board of Trustees from time to time. The Distributor also may enter into such agreements based on such additional forms of agreement as it deems appropriate, provided that the Distributor determines that the Trust’s and the Funds’ responsibility or liability to any person under, or on account of any acts or statements of any such selling agent under, any such sales support agreement do not exceed their responsibility or liability under the form(s) approved by the Board of Trustees, and provided further that the Distributor determines that the overall terms of any such sales support agreement are not materially less advantageous to the Trust than the overall terms of the form(s) approved by the Board of Trustees. In entering into and performing such agreements, the Distributor shall act as principal and not as agent for the Trust or any Fund.

2. Representations; Indemnification .

2.1. The Trust represents to the Distributor that all registration statements with respect to Shares and shareholder reports with respect to Funds filed by the Trust with the SEC, have been prepared in conformity with the requirements of the 1933 Act, the 1934 Act and the 1940 Act, as applicable, and rules and regulations of the SEC thereunder. The Trust further represents and warrants to the Distributor that any registration statement, when such registration statement becomes effective, and any shareholder report, when such report is filed, will contain all statements required to be stated therein in conformity with the 1933 Act, the 1934 Act and the 1940 Act, as applicable, and the rules and regulations of the SEC; that all statements of fact contained in any such registration statement or shareholder report will be true and correct when such registration statement becomes effective, or when such shareholder report is filed; and that no registration statement, when such registration statement becomes effective, and no shareholder report, when such shareholder report is filed, will include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the

statements therein not misleading to a purchaser of Shares. The Trust authorizes the Distributor and authorized banks, broker/dealers and other financial institutions to use any prospectus or statement of additional information in the form furnished from time to time in connection with the sale of Shares and represented by the Trust as being the then-current form of prospectus or then-current form of statement of additional information.

2.2. The Trust agrees to indemnify, defend and hold the Distributor, its several officers and directors, and any person who controls the Distributor within the meaning of Section 15 of the 1933 Act free and harmless from and against any and all claims, demands, liabilities and expenses (including the cost of investigating or defending such claims, demands or liabilities and any counsel fees incurred in connection therewith) which the Distributor, its officers and directors, or any such controlling person, may incur under the 1933 Act or under common law or otherwise, arising out of or based upon any untrue statement, or alleged untrue statement, of a material fact contained in any registration statement or shareholder report or arising out of or based upon any omission, or alleged omission, to state a material fact required to be stated in any registration statement or shareholder report or necessary to make any statement in such documents not misleading; provided, however, that the Trust’s agreement to indemnify the Distributor, its officers and directors, and any such controlling person shall not be deemed to cover any claims, demands, liabilities or expenses arising out of any untrue statement or alleged untrue statement or omission or alleged omission made in any registration statement or shareholder report or in any financial or other statements in reliance upon and in conformity with any information furnished to the Trust by the Distributor or any affiliate thereof and used in the preparation thereof; and further provided that the Trust’s agreement to indemnify the Distributor, its officers and directors, and any such controlling person shall not be deemed to cover any liability to the Trust or its shareholders to which the Distributor, is officers and directors, or any such controlling person would otherwise be subject by reason of willful misfeasance, bad faith or gross negligence in the performance of the Distributor’s, its officer’s or director’s, or any such controlling person’s duties, or by reason of the Distributor’s, its officer’s or director’s, or any such controlling person’s reckless disregard of its obligations and duties under this Agreement.

The Trust’s agreement to indemnify the Distributor, its officers and directors, and any such controlling person, as aforesaid, is expressly conditioned upon the Trust’s being notified of any action brought against the Distributor, its officers or directors, or any such controlling person, such notification to be given in writing and to be transmitted by personal delivery, first class mail, overnight courier, facsimile or other electronic means to the address or facsimile number contained in paragraph 9 of this Agreement, or to such other addresses or facsimile numbers as the parties hereto may specify from time to time in writing and such notification to be sent to the Trust within a reasonable period of time after the summons or other first legal process shall have been served. The failure to so notify the Trust of any such action shall not relieve the Trust from any liability hereunder, which the Trust may have to the person against whom, such action is brought by reason of any such untrue or alleged untrue statement, or omission or alleged omission, except to the extent the Trust has been actually prejudiced by such delay. The Trust will be entitled to assume at its own expense the defense of any suit brought to enforce any such claim, demand or liability, but, in such case, such defense shall be conducted by counsel of good standing chosen by the Trust and approved by the Distributor, which approval shall not unreasonably be withheld. In the event the Trust elects to assume the defense of any such suit and retain counsel of good standing approved by the Distributor, the

defendant or defendants in such suit shall bear the fees and expenses of any additional counsel retained by any of them; but in case the Trust does not elect to assume the defense of any such suit, or in case the Distributor reasonably does not approve of counsel chosen by the Trust, the Trust will reimburse the Distributor, its officers and directors, or the controlling person or persons named as defendant or defendants in such suit, for the fees and expenses of any counsel retained by the Distributor or them.

The Trust’s indemnification agreement contained in this paragraph 2.2 and the Trust’s representations and warranties in this Agreement shall remain operative and in full force and effect regardless of any investigation made by or on behalf of the Distributor, its officers or directors, or any controlling person, and shall survive the delivery of any Shares. This agreement of indemnity will inure exclusively to the Distributor’s benefit, to the benefit of its several officers and directors, and their respective estates, and to the benefit of the controlling persons and their successors. The Trust agrees promptly to notify the Distributor of the commencement of any litigation or proceedings against the Trust or any of its officers or Trustees in connection with the issue and sale of any Shares.

2.3. The Distributor agrees to indemnify, defend and hold the Trust, its several officers and Trustees, and any person who controls the Trust within the meaning of Section 15 of the 1933 Act free and harmless from and against any and all claims, demands, liabilities and expenses (including the costs of investigation or defending such claims, demands or liabilities and any counsel fees incurred in connection therewith) which the Trust, its officers or Trustees or any such controlling person, may incur under the 1933 Act or under common law or otherwise, but only to the extent that such liability or expense incurred by the Trust, its officers or Trustees, or such controlling person resulting from such claims or demands, shall arise out of or be based upon (a) any untrue, or alleged untrue, statement of a material fact contained in information furnished by the Distributor or any affiliate thereof to the Trust or its counsel and used in the Trust’s registration statement or shareholder reports, or shall arise out of or be based upon any omission, or alleged omission, to state a material fact in connection with such information furnished by the Distributor or any affiliate thereof to the Trust or its counsel required to be stated in such answers or necessary to make such information not misleading, or (b) any willful misfeasance, bad faith or gross negligence in the performance of the Distributor’s obligations and duties under the Agreement or by reason of its reckless disregard thereof. The Distributor’s agreement to indemnify the Trust, its officers and Trustees, and any such controlling person, as aforesaid, is expressly conditioned upon the Distributor’s being notified of any action brought against the Trust, its officers or Trustees, or any such controlling person, such notification to be given in writing and to be transmitted by personal delivery, first class mail, overnight courier, facsimile or other electronic means to the address or facsimile number contained in paragraph 9 of this Agreement, or to such other addresses or facsimile numbers as the parties hereto may specify from time to time in writing and such notification to be sent to the Distributor by the person against whom such action is brought, within a reasonable period of time after the summons or other first legal process shall have been served. The failure to so notify the Distributor of any such action shall not relieve the Distributor or any affiliate thereof from any liability hereunder, which the Distributor or any affiliate thereof may have to the Trust, its officers or Trustees, or to such controlling person by reason of any such untrue or alleged untrue statement, or omission or alleged omission, or other conduct covered by this indemnity agreement, except to the extent the Distributor has been actually prejudiced by such delay. The

Distributor shall have the right to control the defense of such action, with counsel of good standing of its own choosing, approved by the Board of Trustees of the Trust, which approval shall not unreasonably be withheld, if such action is based solely upon such misstatement or omission, or alleged misstatement or omission, on the Distributor’s part or any affiliate thereof.

2.4. The Trust agrees to advise the Distributor as soon as reasonably practicable of the issuance by the SEC of any stop order suspending the effectiveness of the registration statement then in effect or of the initiation of any proceeding for that purpose. Thereafter, no Shares shall be offered by either the Distributor or the Trust under any of the provisions of this Agreement and no orders for the purchase or sale of Shares hereunder shall be accepted by the Trust if and so long as the effectiveness of the registration statement then in effect or any necessary amendments thereto shall be suspended under any of the provisions of the 1933 Act, or if and so long as a current prospectus, as required by Section 10(b) of the 1933 Act is not on file with the SEC; provided, however, that nothing contained in this paragraph 2.4 shall in any way restrict or have any application to or bearing upon the Trust’s obligation to repurchase Shares from any shareholder in accordance with the provisions of the Trust’s prospectus or Declaration of Trust.

3. Confidentiality .

The Trust and Distributor may receive from each other information, or access to information, about the customers or about consumers generally (collectively, “Customer Information”) including, but not limited to, nonpublic personal information such as a customer’s name, address, telephone number, account relationships, account balances and account histories. Each of the Trust and Distributor agrees on behalf of their respective employees that all information, including Customer Information, obtained pursuant to this Agreement shall be considered confidential information. Except as permitted by law or required by order of a court or governmental authority, or required by any self-regulatory organization, having jurisdiction over the parties, none of the parties shall disclose such confidential information to any other person or entity or use such confidential information other than to carry out the purposes of this Agreement, including its use under applicable provisions of the SEC’s Regulation S-P in the ordinary course of carrying out the purposes of this Agreement.

4. Anti-Money Laundering Program .

The Distributor represents and warrants that it (a) has adopted an anti-money laundering compliance program (“AML Program”) that satisfies the requirements of all applicable laws and regulations; and (b) will notify the Trust promptly if an inspection by the appropriate regulatory authorities of its AML Program identifies any material deficiency, and will promptly remedy any material deficiency of which it learns.

5. Limitations of Liability .

Except as provided in paragraph 2.3, the Distributor shall not be liable for any error of judgment or mistake of law or for any loss suffered by the Trust or any Fund in connection with matters to which this Agreement relates, except a loss resulting from willful misfeasance, bad faith or gross negligence on its part in the performance of its duties or from reckless disregard of its obligations and duties under this Agreement.

6. Term .

6.1. This Agreement shall become effective on the date of its execution and, unless sooner terminated as provided herein, shall continue in effect for a period of two (2) years from the date written above. This Agreement shall thereafter continue from year to year, provided such continuance is specifically approved at least annually by (i) the Trust’s Board of Trustees, or (ii) a vote of a majority (as defined in the 1940 Act) of the outstanding voting securities of the Fund, provided that in either event the continuance is also approved by the majority of the Trust’s Trustees who are not parties to this Agreement or interested persons (as defined in the 1940 Act) of any such party, by vote cast in person at a meeting called for the purpose of voting on such approval.

6.2. This Agreement is terminable with respect to a Fund, without penalty, on not less than sixty (60) days’ written notice, by the Trust’s Board of Trustees, by vote of a majority (as defined in the 1940 Act) of the outstanding voting securities of such Fund, or by the Distributor. This Agreement will also terminate automatically in the event of its assignment (as defined in the 1940 Act). Upon termination, the obligations of the parties under this Agreement shall cease except for unfulfilled obligations and liabilities arising prior to termination and the provisions of Sections 2, 3, 5, 6.2, 7, 8 and 9.

7. Limited Recourse

The names “Columbia Funds Series Trust” and “Trustees of “Columbia Funds Series Trust” refer respectively to the Trust created by the Declaration of Trust and the Trustees as Trustees but not individually or personally. All parties hereto acknowledge and agree that any and all liabilities of the Trust arising, directly or indirectly, under this Agreement will be satisfied solely out of the assets of the Trust and that no Trustee, officer or shareholder shall be personally liable for any such liabilities. All persons dealing with any Fund of the Trust must look solely to the property belonging to such Fund for the enforcement of any claims against the Trust.

8. Miscellaneous .

8.1. No provision of this Agreement may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by the party against which an enforcement of the change, waiver, discharge or termination is sought.

8.2. This Agreement shall be governed by the laws of the State of Delaware as in effect as of the date hereof and the applicable provisions of the 1940 Act. To the extent that the applicable law of the State of Delaware, or any of the provisions herein, conflict with the applicable provisions of the 1940 Act, the latter shall control.

9. Notices .

Any notices under this Agreement shall be in writing, addressed and delivered or mailed postage paid to such address as may be designated for the receipt of such notice. Until further notice, it is agreed that the address of the Trust shall be One Financial Center, Boston, Massachusetts 02111, Attention: Secretary, and that of the Distributor shall be One Financial Center, Boston, Massachusetts 02111, Attention: President.

10. Counterparts . This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same agreement.

[Signature Page Follows]

IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed by their officers designated below as of the day and year first above written.


COLUMBIA FUNDS SERIES TRUST
on behalf of its Funds

By:		/s/ Joseph F. DiMaria
Name:		Joseph F. DiMaria
Title:		Chief Accounting Officer

COLUMBIA MANAGEMENT INVESTMENT DISTRIBUTORS, INC.

By:		/s/ William F. Truscott
Name:		William F. Truscott
Title:		Chairman

Distribution of Agreement

SCHEDULE I

COLUMBIA FUNDS SERIES TRUST

1. Corporate Bond Portfolio

2. Mortgage- and Asset Backed Portfolio

3. Columbia Asset Allocation Fund II

4. Columbia California Intermediate Municipal Bond Fund

5. Columbia Convertible Securities Fund

6. Columbia Georgia Intermediate Municipal Bond Fund

7. Columbia Global Value Fund

8. Columbia High Income Fund

9. Columbia International Value Fund

10. Columbia Large Cap Core Fund

11. Columbia Large Cap Enhanced Core Fund

12. Columbia Large Cap Index Fund

13. Columbia Large Cap Value Fund

14. Columbia LifeGoal Balanced Growth Portfolio

15. Columbia LifeGoal Growth Portfolio

16. Columbia LifeGoal Income Portfolio

17. Columbia LifeGoal Income and Growth Portfolio

18. Columbia Marsico 21st Century Fund

19. Columbia Marsico Focused Equities Fund

20. Columbia Marsico Global Fund

21. Columbia Marsico Growth Fund

22. Columbia Marsico International Opportunities Fund

23. Columbia Maryland Intermediate Municipal Bond Fund

24. Columbia Masters International Equity Portfolio

25. Columbia Mid Cap Index Fund

26. Columbia Mid Cap Value Fund

27. Columbia Multi-Advisor International Equity Fund

28. Columbia North Carolina Intermediate Municipal Bond Fund

29. Columbia Overseas Value Fund

30. Columbia Short Term Bond Fund

31. Columbia Short Term Municipal Bond Fund

32. Columbia Small Cap Growth Fund II

33. Columbia Small Cap Index Fund

34. Columbia Small Cap Value Fund II

35. Columbia South Carolina Intermediate Municipal Bond Fund

36. Columbia Total Return Bond Fund

37. Columbia Virginia Intermediate Municipal Bond Fund

Schedule I to Distribution Agreement

SCHEDULE II


Non-Money Market Funds	Class A Shares	Class B Shares	Class C Shares	Class R Shares
Columbia Asset Allocation Fund II	0.25%	0.75%	0.75%	N/A
Columbia California Intermediate Municipal Bond Fund	0.25%	0.75%	0.75%	N/A
Columbia Convertible Securities Fund	0.25%	0.75%	0.75%	N/A
Columbia Georgia Intermediate Municipal Bond Fund	0.25%	0.75%	0.75%	N/A
Columbia Global Value Fund	0.25%	0.75%	0.75%	N/A
Columbia High Income Fund	0.25%	0.75%	0.75%	N/A
Columbia International Value Fund	0.25%	0.75%	0.75%	N/A
Columbia Large Cap Core Fund	0.25%	0.75%	0.75%	N/A
Columbia Large Cap Enhanced Core Fund	0.25%	N/A	N/A	0.50%
Columbia Large Cap Index Fund	0.25%	0.75%	N/A	N/A
Columbia Large Cap Value Fund	0.25%	0.75%	0.75%	0.50%
Columbia LifeGoal Balanced Growth Portfolio	0.25%	0.75%	0.75%	0.50%
Columbia LifeGoal Growth Portfolio	0.25%	0.75%	0.75%	0.50%
Columbia LifeGoal Income and Growth Portfolio	0.25%	0.75%	0.75%	0.50%
Columbia LifeGoal Income Portfolio	0.25%	0.75%	0.75%	N/A
Columbia Marsico Focused Equities Fund	0.25%	0.75%	0.75%	N/A
Columbia Marsico Global Fund	0.25%	N/A	0.75%	0.50%
Columbia Marsico Growth Fund	0.25%	0.75%	0.75%	0.50%
Columbia Marsico International Opportunities Fund	0.25%	0.75%	0.75%	0.50%
Columbia Marsico 21 ^st Century Fund	0.25%	0.75%	0.75%	0.50%
Columbia Maryland Intermediate Municipal Bond Fund	0.25%	0.75%	0.75%	N/A
Columbia Masters International Equity Portfolio	0.25%	0.75%	0.75%	0.50%
Columbia Mid Cap Index Fund	0.25%	N/A	N/A	N/A
Columbia Mid Cap Value Fund	0.25%	0.75%	0.75%	0.50%
Columbia Multi-Advisor International Equity Fund	0.25%	0.75%	0.75%	0.50%
Columbia North Carolina Intermediate Municipal Bond Fund	0.25%	0.75%	0.75%	N/A
Columbia Overseas Value Fund	0.25%	N/A	0.75%	0.50%
Columbia Short Term Bond Fund	0.25%	0.75%	0.75%	N/A
Columbia Short Term Municipal Bond Fund	0.25%	0.75%	0.75%	N/A
Columbia Small Cap Growth Fund II	0.25%	0.75%	0.75%	N/A
Columbia Small Cap Index Fund	0.25%	N/A	N/A	N/A
Columbia Small Cap Value Fund II	0.25%	0.75%	0.75%	0.50%
Columbia South Carolina Intermediate Municipal Bond Fund	0.25%	0.75%	0.75%	N/A
Columbia Total Return Bond Fund	0.25%	0.75%	0.75%	N/A
Columbia Virginia Intermediate Municipal Bond Fund	0.25%	0.75%	0.75%	N/A

Schedule II to Distribution Agreement

Exhibit (h)(1)

ADMINISTRATIVE SERVICES AGREEMENT

This Administrative Services Agreement (“Agreement”), dated as of May 1, 2010, is by and between Columbia Management Investment Advisers, LLC (formerly, RiverSource Investments, LLC), a Minnesota limited liability company (“Administrator” or “CMIA”), Columbia Funds Series Trust, a Delaware statutory trust (“CFST”), Columbia Funds Master Investment Trust, LLC, a Delaware limited liability company (“CFMIT”), Columbia Funds Variable Insurance Trust I, a Delaware statutory trust (“CFVIT I”), and Columbia Funds Series Trust II, a Delaware statutory trust (“CFII” and collectively with CFST, CFMIT and CFVIT I the “Registrants” and each a, “Registrant”), each acting on behalf of its series listed in Schedule A . The terms “Fund” or “Funds” are used to refer to either the Registrant or the underlying series as context requires.

Part One: SERVICES

(1)

The Fund hereby retains Administrator, and Administrator hereby agrees, for the period of this Agreement and under the terms and conditions set forth in this Agreement and subject to the oversight of the Board of Trustees of the Registrant (the “Board”), any committees thereof and/or authorized officer(s) of the Fund, to provide all of the services and facilities that are necessary for or appropriate to the business and effective operation of the Fund that are not (a) provided by employees or other agents engaged by the Fund or the Board or (b) required to be provided by any person pursuant to any other agreement or arrangement with the Fund, including but not limited to the following (unless otherwise directed by the Board or a committee thereof or the Chair):

(i)

Providing office space, equipment, office supplies and clerical personnel;

(ii)

Overseeing and assisting in the preparation of all general or routine shareholder communications;

(iii)

Calculating and arranging for notice and payment of dividend, income, and capital gains distributions to shareholders of the Fund;

(iv)

Accumulating information for, preparing and filing (or overseeing and assisting such persons that the Fund has retained to prepare and file) shareholder reports and other required regulatory reports and communications, including, but not limited to, reports on Form N-CSR, Form N-PX, Form N-Q, Form N-SAR, annual and semi-annual reports to shareholders, proxy materials, and notices pursuant to Rule 24f-2 under the Investment Company Act of 1940, as amended, and the rules promulgated thereunder (the “1940 Act”);

(v)

Preparing and filing of tax reports and returns, including the Fund’s foreign, federal, state, local and excise tax returns, and issuing all tax-related information to shareholders, including IRS Form 1099 and other applicable tax forms;

(vi)

Monitoring and testing the Fund’s compliance with Subchapter M of the Internal Revenue Code and other applicable tax laws and regulations;

(vii)

Executing the pricing process, including calculating the Fund’s net asset value(s), and monitoring the reliability of the valuation information received from the independent third-party pricing services and brokers;

(viii)

Coordinating and supervising relations with, and monitoring the performance of, custodians, depositories, transfer and pricing agents, accountants, underwriters, brokers and dealers, insurers, printers, Fund auditors, and other persons serving the Fund, to the extent deemed necessary or desirable by the Board, and reporting to the Board on the same;

(ix)

Preparing, maintaining and filing Fund registration statements and post-effective amendments thereto and other filings required by state, federal, and local laws and regulations;

(x)

Determining jurisdictions in which shares of the Fund shall be qualified for sale and qualifying and maintaining qualification in the jurisdictions in which shares of the Fund are offered for sale;

(xi)

Preparing reports, information, surveys, or statistical or other analyses for third parties as deemed necessary or desirable by the Fund;

(xii)

Arranging, if desired by the Fund, for Board Members, officers, and employees of Administrator to serve as Board Members, officers, or agents of the Fund;

(xiii)

Coordinating, preparing and distributing materials for Board and committee meetings, including reports, evaluations, information, surveys, statistical analyses or other materials on corporate and legal issues relevant to the Fund’s business as the Board may request from time to time;

(xiv)

Providing Fund accounting and internal audit services;

(xv)

Publishing (or supervising publication by such persons that the Fund has retained to publish) of the Fund’s daily net asset value quotations, pricing, performance and yield information, periodic earnings reports, and other financial data, consistent with federal securities laws and the Fund’s current registration statement;

(xvi)

Preparing and furnishing to the Fund such broker security transaction summaries and security transaction listings as may reasonably be requested and reporting such information to external databases;

(xvii)

Assisting the Fund with its obligations under Section 302 and 906 of the Sarbanes-Oxley Act of 2002 and Rule 30a-2 under the 1940 Act, including the establishment and maintenance of internal controls and procedures that are reasonably designed to ensure that information prepared or maintained in connection with administration services provided hereunder is properly recorded, processed, summarized, or reported by Administrator or its affiliates on behalf of the Fund so that it may be included in financial information certified by Fund officers on Form N-CSR and Form N-Q;

(xviii)

Providing compliance services, as directed by the Fund’s Chief Compliance Officer, which include monitoring the Fund’s compliance with its policies and procedures and with applicable federal, state and foreign securities laws, and the rules and regulations thereunder, as applicable, including, without limitation, the 1940 Act, the Securities and Exchange Act of 1934 and the Securities Act of 1933, each as amended from time to time, and the rules promulgated under each of the foregoing;

(xix)

Monitoring the Fund’s compliance with its investment policies, objectives, and restrictions as set forth in its currently effective Prospectus and Statement of Additional Information;

(xx)

Monitoring legal, tax, regulatory, and industry developments relevant to the Fund and assisting in the strategic response to such developments;

(xxi)

Administering the Fund’s code of ethics and reporting to the Board on compliance therewith;

(xxii)

Providing internal legal support of all administration services provided by Administrator under this Agreement;

(xxiii)

Preparing and filing, or assisting with the preparation and filing, of claims in connection with class actions involving portfolio securities, handling administrative matters in connection with such litigations or settlements, and reporting to the Board regarding such matters;

(xxiv)

Monitoring, budgeting, approving and arranging for payment of Fund expenses;

(xxv)

Monitoring Board compliance with personal trading guidelines;

(xxvi)

Obtaining and maintaining the Fund’s fidelity bond coverage and insurance coverage and administering claims thereunder, and filing any fidelity bonds and related notices with the SEC as required by the 1940 Act;

(xxvii)

Preparing such financial information and reports as may be required by any banks from which the Fund borrows;

(xxviii)

Maintaining the Fund’s books and records in accordance with all applicable federal and state securities laws and regulations, provided that all such items maintained by it shall be the property of the Fund, and that Administrator shall surrender promptly to the Fund any such items it maintains upon request, provided that Administrator shall be permitted to retain a copy of all such items;

(xxix)

Administering operating policies of the Fund and recommending to the officers and the Board such modifications to such policies as Administrator determines necessary or appropriate to facilitate the protection of shareholders or market competitiveness of the Fund and to comply with new legal or regulatory requirements;

(xxx)

Assisting the Fund in regulatory examinations, inspections or investigations of the Fund;

(xxxi)

Administering the implementation of the Fund’s privacy policy (including any required distribution thereof) as required under regulation S-P;

(xxxii)

Providing legal support for closed-end funds to ensure compliance with the New York Stock Exchange listing standards, as they may be amended from time to time;

(xxxiii)

Receiving and notifying the Fund of inquiries and complaints from regulators, media and the public;

(xxxiv)

Implementing and maintaining, together with affiliated companies, a business continuation and disaster recovery program for the Fund;

(xxxv)

Arranging for all meetings of shareholders, including collecting all information required for the preparation of proxy statements, preparing and filing with appropriate regulatory agencies such proxy statements, supervising the solicitation of shareholders and shareholder nominees in connection therewith, tabulating (or supervising the tabulation of) votes, responding to all inquiries regarding such meetings from shareholders, the public and the media, and retaining all minutes and all other records required to be kept in connection with such meetings;

(xxxvi)

Maintaining and retaining all charter documents and filing all documents required to maintain the Fund’s organizational status under applicable state law and as a registered investment company; and

(xxxvii)

Supervising the drafting, negotiation and maintenance of any Fund agreements.

If, as a result of a material change in applicable law, rules or regulations, Fund policies or the activities undertaken or transactions engaged in by the Funds or otherwise, the type or quantity of administrative services to be provided hereunder changes materially, the Funds and Administrator shall negotiate in good faith such adjustment, if any, in the fee payable under Part 2 of this Agreement as may be mutually agreed by the parties.

(2)	Administrator agrees to meet with any persons at such times as the Board deems appropriate for the purpose of reviewing Administrator’s performance under this Agreement.

(3)	The Fund agrees that it will furnish to Administrator any information that the latter may reasonably request with respect to the services performed or to be performed by Administrator under this Agreement.

(4)

It is understood and agreed that in furnishing the Funds with services under this Agreement, neither Administrator, nor any officer, board member or agent thereof, shall be held liable to any Fund, its shareholders or its creditors for any action taken or thing done by it or its subcontractors or agents on behalf of any Fund in carrying out the terms and provisions of this Agreement if done in good faith and without negligence or willful misfeasance or reckless disregard of its obligations and duties under this Agreement on the part of Administrator or its subcontractors or agents. It is further understood and agreed that, to the extent permitted by law, Administrator may rely upon information furnished to it and reasonably believed to be accurate and reliable.

(5)

In performing all services under this Agreement, the Administrator shall: (i) act in conformity with the Fund’s declaration of trust, bylaws, the 1940 Act and the rules thereunder, and other applicable laws and regulations, as the same may be amended from time to time, and the Fund’s registration statement, as such registration statement may be amended from time to time; (ii) consult and coordinate with the Fund, as necessary and appropriate; and (iii) advise and report to the Fund, as necessary or appropriate, with respect to any compliance matters that come to its attention.

Part Two: COMPENSATION FOR SERVICES

(1)	The Fund agrees to pay to Administrator, in full payment for the services furnished, a fee as described in Schedule B .

(2)

The administrative fee shall be accrued daily (unless otherwise directed by the Board consistent with the prospectus and statement of additional information of the Fund) and paid on a monthly basis and, in the event of the effectiveness or termination of this Agreement, in whole or in part with respect to any Fund, during any month, the administrative fee paid to Administrator shall be prorated on the basis of the number of days that this Agreement is in effect during the month with respect to which such payment is made.

(3)	The administrative fee shall be paid in cash by the Fund to Administrator within five (5) business days after the last day of each month. A “business day” shall be any day on which shares of the Fund are available for purchase.

Part Three: ALLOCATION OF EXPENSES

(1)

Except to the extent that such expenses are paid by the Fund’s investment adviser or its affiliates pursuant to a “unitary fee” or other arrangement, the Fund agrees to pay, and, for avoidance of doubt, Administrator shall not be responsible for paying (unless it has expressly assumed such responsibility), and shall be reimbursed promptly by the Fund if it pays, any costs and expenses incidental to the organization, operations and business of the Fund, including but not limited to:

(i)

Administrative fees payable to Administrator for its services under this Agreement;

(ii)

Fees and charges for investment advisory services provided to the Fund by any person;

(iii)

Fees payable pursuant to any plan adopted by the Fund under Rule 12b-1 under the 1940 Act;

(iv)

Fees and charges of transfer, shareholder servicing, shareholder recordkeeping and dividend disbursing agents and all other expenses relating to the issuance, redemption, and exchange of shares of the Fund and the maintenance and servicing of shareholder accounts;

(v)

Fees and charges for bookkeeping, accounting, financial reporting and tax information services provided to the Fund by any person;

(vi)

Fees and charges for services of the Fund’s independent auditors and for services provided to the Fund by external legal counsel, including expenses of Fund litigation;

(vii)

Fees and charges of depositories, custodians, and other agencies for the safekeeping and servicing of its cash, securities, and other property;

(viii)

Fund taxes and fees and charges of any person other than the Investment Manager or its affiliates for preparation of the Fund’s tax returns;

(ix)

Fees and expenses payable to federal, state, or other governmental agencies, domestic or foreign, for the maintenance of the Fund’s legal existence, including the filing of any required reports, charter document amendments or other documents;

(x)

Organizational expenses of the Fund;

(xi)

Expenses of printing and distributing the Fund’s prospectuses, statements of additional information and shareholder reports to Fund shareholders;

(xii)

Expenses of registering and maintaining the registration of the Fund under the 1940 Act and, if applicable, the 1933 Act, of qualifying and maintaining qualification of the Fund and the Fund’s shares for sale under securities laws of various states or other jurisdictions and of registration and qualification of the Fund under all laws applicable to the Fund or its business activities;

(xiii)

Brokerage commissions and other transaction expenses in connection with the Fund’s purchase and sale of assets;

(xiv)

Premium on the bond required by Rule 17g-1 under the 1940 Act, and other expenses of bond and insurance coverage required by law or deemed advisable by the Board;

(xv)

Fees of consultants employed by the Fund, including the costs of pricing sources for Fund portfolio securities;

(xvi)

Board Member, officer and employee compensation and expenses, which include fees, salaries, memberships, dues, travel, seminars, pension, profit sharing, all expenses of meetings of the Board and committees, and all other compensation and benefits paid to or provided for Board Members, officers and employees (including insurance), except the Fund will not pay any compensation, fees or expenses of any person who is an officer or employee of the Investment Manager or its affiliates for services as a Board Member, officer or agent of the Fund (except to the extent the Board shall have specifically approved the payment by the Fund of all or a portion of the expenses of the Fund’s chief compliance officer or other officer(s));

(xvii)

Expenses incidental to holding meetings of Fund shareholders, including printing and supplying each record-date shareholder with notice and proxy solicitation materials, and all other proxy solicitation expenses;

(xviii)

Expenses incurred in connection with lending portfolio securities of the Fund;

(xix)

Interest on indebtedness and any other costs of borrowing money;

(xx)

Fees, dues, and other expenses incurred by the Fund in connection with membership of the Fund in any trade association or other investment company organization;

(xxi)

Other expenses payable by the Fund pursuant to separate agreements of the Fund; and

(xxii)

Other expenses properly payable by the Fund, as approved by the Board.

(2)	Administrator agrees to pay all expenses it incurs in connection with the services it provides under the terms of this Agreement, excluding any expenses contemplated to be borne by the Fund pursuant to paragraph (1) of this Part Three.

(3)

Any expenses borne by a Fund that are attributable solely to the organization, operation or business of a constituent Fund shall be paid solely out of such Fund’s assets. Any expense borne by a Fund which is not solely attributable to a constituent Fund, nor solely to any other series of shares of the Fund, shall be apportioned in such manner as Administrator determines is fair and appropriate, or as otherwise specified by the Directors.

Part Four: MISCELLANEOUS

(1)	Administrator shall be deemed to be an independent contractor and, except as expressly provided or authorized in this Agreement or any other agreement approved by the Board, shall have no authority to act for or represent the Fund.

(2)

The Fund recognizes that Administrator and its affiliates, pursuant to separate agreements, now render and may continue to render services to other investment companies and persons which may or may not have policies similar to those of the Fund and that Administrator provides services for its own investments and/or those of its affiliates. Administrator shall be free to provide such services and the Fund hereby consents thereto.

(3)

Neither this Agreement nor any transaction effected pursuant hereto shall be invalidated or in any way affected by the fact that Board Members, officers, agents and/or shareholders of the Fund are or may be interested in Administrator or any successor or assignee thereof, as board members, officers, stockholders or otherwise; that board members, officers, stockholders or agents of Administrator are or may be interested in the Fund as Board Members, officers, shareholders or otherwise; or that Administrator or any successor or assignee is or may be interested in the Fund as shareholder or otherwise, provided, however, that neither Administrator, nor any officer, board member or employee thereof or of the Fund, shall knowingly sell to or buy from the Fund any property or security other than shares issued by the Fund, except in accordance with applicable regulations or orders of the SEC.

(4)

(5)

In connection with the services to be provided by Administrator under this Agreement, the Fund agrees that Administrator may, subject to compliance with requirements of applicable laws and regulations, and at its own expense, (i) make use of its affiliated companies and their board members, trustees, officers and employees and (ii) subcontract for certain of the services described under this Agreement with the understanding that the quality and scope of services required to be provided under this Agreement shall not be diminished thereby and that Administrator remains fully responsible for the services.

(6)

This Agreement shall extend to and shall be binding upon the parties hereto, and their respective successors and assigns; provided, however, that this Agreement shall not be assignable without the written consent of the other party. This Agreement shall be governed by the internal substantive laws of the Commonwealth of Massachusetts, without regard to conflicts of laws principles.

(7)

All information furnished by Administrator to the Fund under this Agreement regarding the Administrator, its business or its clients shall be confidential and shall not be disclosed to unaffiliated third parties, except as required by law, order, judgment, decree, or pursuant to any rule, regulation or request of or by any government, court, administrative or regulatory agency or commission, other governmental or regulatory authority or any self-regulatory organization. All information furnished by the Fund to Administrator under this Agreement shall be confidential and shall not be disclosed to any unaffiliated third party, except as permitted or required by the foregoing, where necessary to effect transactions or for the provision by third parties of services to the Fund, or where the Fund requests or authorizes Administrator to do so. Administrator may share information with its affiliates in accordance with its privacy and other relevant policies in effect from time to time.

(8)

The names “Columbia Funds Series Trust,” Columbia Funds Master Investment Trust, LLC,” “Columbia Funds Series Trust II,” “Columbia Funds Variable Insurance Trust I” and “Board Members” of the applicable Registrant refer respectively to the Registrant created by the Declaration of Trust or, as applicable, Limited Liability Company Agreement, and the Board Members as Board Members but not individually or personally. All parties hereto acknowledge and agree that any and all liabilities of the Registrant arising, directly or indirectly, under this Agreement will be satisfied solely out of the assets of the Registrant and that no Board Member, officer or shareholder shall be personally liable for any such liabilities. All persons dealing with any Fund of the Registrant must look solely to the property belonging to such Fund for the enforcement of any claims against the Registrant.

(9)	This Agreement may be executed in any number of counterparts each of which shall be deemed to be an original and which collectively shall be deemed to constitute only one instrument.

Part Five: RENEWAL AND TERMINATION

(1)

This Agreement shall continue in effect for one year from the date hereof and, thereafter, from year to year as the parties may mutually agree. Notwithstanding the foregoing, either party may terminate this Agreement, with respect to any Fund, at any time, without the payment of a penalty, by giving the other party notice in writing specifying the date of such termination, which shall be not less than 60 days after the date of receipt of such notice. In the event that, in connection with a termination, a successor to any of the duties or responsibilities of Administrator hereunder is designated by the Fund by written notice to Administrator, upon such termination Administrator shall promptly, and at the expense of the Fund with respect to which this Agreement is terminated, transfer to such successor all relevant books, records, and data established or maintained by Administrator under this Agreement and shall cooperate in the transfer of such duties and responsibilities.

(2)	This Agreement may be amended for any reason (including, for example, to modify the scope of services and/or fees contemplated herein) with respect to any Fund only upon written agreement of Administrator and the Registrant, on behalf of that Fund.

[Signature Page Follows]

IN WITNESS THEREOF, the parties hereto have executed the foregoing Agreement as of the day and year first above written.


COLUMBIA FUNDS SERIES TRUST
COLUMBIA FUNDS MASTER INVESTMENT TRUST, LLC
COLUMBIA FUNDS VARIABLE INSURANCE TRUST I
COLUMBIA FUNDS SERIES TRUST II
Each on behalf of its series listed on Schedule A

By:		/s/ Joseph F. DiMaria
Name:		Joseph F. DiMaria
Title:		Chief Accounting Officer

COLUMBIA MANAGEMENT INVESTMENT ADVISERS, LLC

By:		/s/ William F. Truscott
Name:		William F. Truscott
Title:		Chairman

Administrative Services Agreement

Schedule A

List of Series under each Registrant

Effective as of May 1, 2010

CFST


Corporate Bond Portfolio		Columbia Marsico Global Fund
Mortgage-and Asset-Backed Portfolio		Columbia Marsico Growth Fund
Columbia Asset Allocation Fund II		Columbia Marsico International Opportunities Fund
Columbia California Intermediate Municipal Bond Fund		Columbia Maryland Intermediate Municipal Bond Fund
Columbia Convertible Securities Fund		Columbia Masters International Equity Portfolio
Columbia Georgia Intermediate Municipal Bond Fund		Columbia Mid Cap Index Fund
Columbia Global Value Fund		Columbia Mid Cap Value Fund
Columbia High Income Fund		Columbia Multi-Advisor International Equity Fund
Columbia International Value Fund		Columbia North Carolina Intermediate Municipal Bond Fund
Columbia Large Cap Core Fund		Columbia Overseas Value Fund
Columbia Large Cap Enhanced Core Fund		Columbia Short Term Bond Fund
Columbia Large Cap Index Fund		Columbia Short Term Municipal Bond Fund
Columbia Large Cap Value Fund		Columbia Small Cap Growth Fund II
Columbia LifeGoal Balanced Growth Portfolio		Columbia Small Cap Index Fund
Columbia LifeGoal Growth Portfolio		Columbia Small Cap Value Fund II
Columbia LifeGoal Income and Growth Portfolio		Columbia South Carolina Intermediate Municipal Bond Fund
Columbia LifeGoal Income Portfolio		Columbia Total Return Bond Fund
Columbia Marsico 21st Century Fund		Columbia Virginia Intermediate Municipal Bond Fund
Columbia Marsico Focused Equities Fund

CFMIT

Columbia International Value Master Portfolio

CFVIT I


Columbia High Yield Fund, Variable Series		Columbia Marsico 21 ^st Century Fund, Variable Series
Columbia Marsico Focused Equities Fund, Variable Series		Columbia Marsico Growth Fund, Variable Series
Columbia Marsico International Opportunities Fund, Variable Series		Columbia Marsico Mid Cap Growth Fund, Variable Series

Schedule A to Administrative Services Agreement

CFII


Columbia Retirement 2005 Portfolio		Columbia Retirement 2010 Portfolio
Columbia Retirement 2015 Portfolio		Columbia Retirement 2020 Portfolio
Columbia Retirement 2025 Portfolio		Columbia Retirement 2030 Portfolio
Columbia Retirement 2035 Portfolio		Columbia Retirement 2040 Portfolio

Schedule A to Administrative Services Agreement

Schedule B

Fee Schedule

CFST

For services rendered pursuant to this Agreement, the Registrant will pay CMIA an administration fee, computed daily and payable monthly, based on the annual rate of each Fund’s daily net assets equal to (i) the amount listed under the caption “Administration Fee” in the table below for the Fund less, for all Funds except Columbia Masters International Equity Portfolio, (ii) (a) the amount paid by the Fund to State Street Bank and Trust Company (“State Street”) pursuant to the Accounting Services Agreement and the Financial Reporting Services Agreement during the period, but excluding amounts paid to State Street as reimbursement for out-of-pocket expenses and charges, including fees payable to third parties, such as for pricing the Fund’s portfolio securities, incurred in the performance of services by State Street under such Agreements and (b) for any Fund structured as a “fund-of-funds”, the amount of the custody fee paid by such Fund to State Street pursuant to the Fund’s Master Custodian Agreement.


Fund		Administration Fee
Corporate Bond Portfolio		As mutually agreed upon by the Registrant and CMIA from time to time. Pursuant to a separate agreement for this Fund, CMIA has agreed to absorb all fees and expenses incurred under this Agreement.
Mortgage-and Asset Backed Portfolio		As mutually agreed upon by the Registrant and CMIA from time to time. Pursuant to a separate agreement for this Fund, CMIA has agreed to absorb all fees and expenses incurred under this Agreement.
Columbia Asset Allocation Fund II		0.12%
Columbia California Intermediate Municipal Bond Fund		0.15%
Columbia Convertible Securities Fund		0.17%
Columbia Georgia Intermediate Municipal Bond Fund		0.15%
Columbia Global Value Fund		0.17%
Columbia High Income Fund		0.23%
Columbia International Value Fund		0.17%
Columbia Large Cap Core Fund		0.17%
Columbia Large Cap Enhanced Core Fund		0.17%
Columbia Large Cap Index Fund		0.10% ¹
Columbia Large Cap Value Fund		0.17%
Columbia LifeGoal Balanced Growth Portfolio		As mutually agreed upon by the Registrant and CMIA from time to time. Pursuant to a separate agreement for this Fund, CMIA has agreed to absorb all fees and expenses incurred under this Agreement.

CMIA, as administrator, has agreed to pay all operating expenses of the Fund with the exception of brokerage fees and commissions, taxes, interest, fees and expenses of Trustees who are not officers, directors or employees of CMIA or its affiliates, distribution (12b-1) and/or shareholder servicing fees, and any extraordinary non-recurring expenses that may arise, including, but not limited to, litigation expenses.

Schedule B to Administrative Services Agreement


Fund		Administration Fee
Columbia LifeGoal Growth Portfolio		As mutually agreed upon by the Registrant and CMIA from time to time. Pursuant to a separate agreement for this Fund, CMIA has agreed to absorb all fees and expenses incurred under this Agreement.
Columbia LifeGoal Income and Growth Portfolio		As mutually agreed upon by the Registrant and CMIA from time to time. Pursuant to a separate agreement for this Fund, CMIA has agreed to absorb all fees and expenses incurred under this Agreement.
Columbia LifeGoal Income Portfolio		0.23% ²
Columbia Marsico 21st Century Fund		0.22%
Columbia Marsico Focused Equities Fund		0.22%
Columbia Marsico Global Fund		0.22%
Columbia Marsico Growth Fund		0.22%
Columbia Marsico International Opportunities Fund		0.22%
Columbia Maryland Intermediate Municipal Bond Fund		0.15%
Columbia Mid Cap Index Fund		0.10%
Columbia Mid Cap Value Fund		0.17%
Columbia Multi-Advisor International Equity Fund		0.17%
Columbia North Carolina Intermediate Municipal Bond Fund		0.15%
Columbia Overseas Value Fund		0.05%
Columbia Short Term Bond Fund		0.14%
Columbia Short Term Municipal Bond Fund		0.15%
Columbia Small Cap Growth Fund II		0.117%
Columbia Small Cap Index Fund		0.10% ³
Columbia Small Cap Value Fund II		0.17%
Columbia South Carolina Intermediate Municipal Bond Fund		0.15%
Columbia Total Return Bond Fund		0.15%
Columbia Virginia Intermediate Municipal Bond Fund		0.15%
Columbia Masters International Equity Portfolio		0.00%

²	Applicable to all assets except those invested in other Columbia Funds. The fee rate for assets invested in other Columbia Funds is 0.13%.

Schedule B to Administrative Services Agreement

In addition to the asset-based fee set forth above, the Registrant shall reimburse CMIA and any sub-administrator engaged pursuant to Part Four: (5) for certain reasonable out-of-pocket expenses incurred by them in connection with the performance of their respective duties hereunder.

Reimbursable out-of-pocket expenses shall include the following: reasonable costs associated with postage (including overnight services), telephone, telecommunications (including facsimiles), duplicating, pricing services and forms and supplies and such other out-of-pocket expenses as the parties may agree to from time to time, including those set forth in this Agreement.

CFMIT

For services rendered pursuant to this Agreement, the Registrant will pay CMIA an administration fee, computed daily and payable monthly, based on the annual rate of the Fund’s daily net assets equal to (i) the amount listed under the caption “Administration Fee” in the table below for the Fund less (ii) the amount paid by the Fund to State Street Bank and Trust Company (“State Street”) pursuant to the Accounting Services Agreement and the Financial Reporting Services Agreement during the period, but excluding amounts paid to State Street as reimbursement for out-of-pocket expenses and charges, including fees payable to third parties, such as for pricing the Fund’s portfolio securities, incurred in the performance of services by State Street under such Agreements.


Fund		Administration Fee
Columbia International Value Master Portfolio		0.05%

Schedule B to Administrative Services Agreement

CFVIT I

For services rendered pursuant to this Agreement, the Registrant will pay CMIA an administration fee, computed daily and payable monthly, based on the annual rate of each Fund’s daily net assets equal to (i) the amount listed under the caption “Administration Fee” in the table below for the Fund less (ii) the amount paid by the Fund to State Street Bank and Trust Company (“State Street”) pursuant to the Accounting Services Agreement and the Financial Reporting Services Agreement during the period, but excluding amounts paid to State Street as reimbursement for out-of-pocket expenses and charges, including fees payable to third parties, such as for pricing the Fund’s portfolio securities, incurred in the performance of services by State Street under such Agreements.


Fund		Administration Fee
Columbia Marsico Growth Fund, Variable Series		0.23%
Columbia Marsico Focused Equities Fund, Variable Series		0.23%
Columbia Marsico 21st Century Fund, Viable Series		0.23%
Columbia Marsico International Opportunities Fund, Variable Series		0.22%
Columbia High Yield Fund, Variable Series		0.23%
Columbia Mid Cap Growth Fund, Variable Series		0.23%

CFII

For services rendered pursuant to this Agreement, the Registrant will pay CMIT an administration fee, computed daily and payable monthly, based on the annual rate of each Fund’s daily net assets equal to the amount listed under the caption “Administration Fee” in the table below for the Fund.


Fund		Administration Fee
Columbia Retirement Portfolio 2005 Portfolio		0.00%
Columbia Retirement Portfolio 2010 Portfolio		0.00%
Columbia Retirement Portfolio 2015 Portfolio		0.00%
Columbia Retirement Portfolio 2020 Portfolio		0.00%
Columbia Retirement Portfolio 2025 Portfolio		0.00%
Columbia Retirement Portfolio 2030 Portfolio		0.00%
Columbia Retirement Portfolio 2035 Portfolio		0.00%
Columbia Retirement Portfolio 2040 Portfolio		0.00%

Schedule B to Administrative Services Agreement

Exhibit (h)(4)

TRANSFER, DIVIDEND DISBURSING AND

SHAREHOLDERS’ SERVICING AGENT AGREEMENT

This agreement (the “Agreement”) is made as of this 1 ^st day of May, 2010, by and between COLUMBIA FUNDS SERIES TRUST, a Delaware statutory trust acting on behalf of its series listed on Appendix I hereto (as the same may from time to time be amended to add or delete one or more series of such trust) (such trust being hereinafter referred to as the “Trust” and each series of the Trust being hereinafter referred to as a “Fund”), Columbia Management Investment Services Corp. (formerly, RiverSource Service Corporation), a Minnesota corporation (“CMISC”), and Columbia Management Investment Advisers, LLC (formerly, RiverSource Investments, LLC) (“CMIA”), an Minnesota limited liability company.

WHEREAS, the Trust is a registered investment company and desires that CMISC perform certain services for the Funds;

WHEREAS, CMISC is willing to perform such services upon the terms and subject to the conditions set forth herein; and

NOW THEREFORE, in consideration of the mutual promises and covenants set forth herein, the parties hereto agree as follows:

1. Appointment . The Trust hereby appoints CMISC to act as Transfer Agent, Dividend Disbursing Agent and Shareholders’ Servicing Agent for the Funds and as agent for the Funds’ shareholders in connection with the shareholder plans described in the Prospectus (as defined below), and CMISC accepts such appointments and will perform the respective duties and functions of such offices in the manner hereinafter set forth.

Notwithstanding such appointments, however, the parties hereto agree that CMIA may, upon thirty (30) days prior written notice to the Trust, assume such duties and functions itself. In such event, CMIA shall have all of the rights and obligations of CMISC hereunder. However, whether or not CMIA assumes such duties and functions, CMIA guarantees the performance of CMISC hereunder and shall be responsible financially and otherwise to the Trust for the performance by CMISC of its obligations under this Agreement.

2. Compensation . The Trust shall pay to CMISC, or to such person(s) as CMISC may from time to time instruct, for services rendered and costs incurred in connection with the performance of duties hereunder, such compensation and reimbursement as may from time to time be approved by vote of the Trustees of the Trust.

Schedule A hereto sets forth the compensation and reimbursement arrangements to be effective as of the date of this Agreement, and the treatment of all interest earned with respect to balances in the accounts maintained by CMISC in connection with the sale and redemption of shares of the Funds, net of any charges in connection with such accounts.

3. Copies of Documents . The Trust will furnish CMISC with copies of the following documents: the Declaration of Trust of the Trust and all amendments thereto; and the Trust’s Registration Statement as in effect on the date hereof under the Securities Act of 1933, as

amended, and the Investment Company Act of 1940, as amended, and all amendments or supplements thereto hereafter filed. The Prospectus(es) and Statement(s) of Additional Information contained in such Registration Statement, as from time to time amended and supplemented, together are herein collectively referred to as the “Prospectus.”

4. Share Certificates . If the Trustees of the Trust shall have resolved that all of the Trust’s (or a particular Fund’s) shares of beneficial interest, or all of the shares of a particular series or class of such shares, shall be issued in certificated form, CMISC shall maintain a sufficient supply of blank share certificates representing such shares, in the form approved from time to time by the Trustees of the Trust. Such blank share certificates shall be properly signed, manually or by facsimile signature, by the duly authorized officers of the Trust, and shall bear the seal or facsimile thereof of the Trust; and notwithstanding the death, resignation or removal of any officer of the Trust authorized to sign such share certificates, CMISC may continue to countersign certificates which bear the manual or facsimile signature of such officer until otherwise directed by the Trust.

5. Lost or Destroyed Certificates . In case of the alleged loss or destruction of any shareholder certificate, no new certificate shall be issued in lieu thereof, unless there shall first be furnished to CMISC an affidavit of loss or non-receipt by the holder of shares with respect to which a certificate has been lost or destroyed, supported by an appropriate bond satisfactory to CMISC and the Trust issued by a surety company satisfactory to CMISC.

6. Receipt of Funds for Investment . CMISC will maintain one or more accounts with its cash management bank into which it will deposit funds payable to CMISC as agent for, or otherwise identified as being for the account of, the Funds or the Distributor, prior to crediting such funds to the respective accounts of the Funds and the Distributor. Thereafter, CMISC will determine the amount of any such funds due a Fund (equal to the number of Fund shares sold by the Fund computed pursuant to paragraph 7 hereof, multiplied by the net asset value of a Fund share next determined after receipt of such purchase order) and the Distributor (equal to the sales charge applicable to such sale computed pursuant to paragraph 9 hereof), respectively, deposit the portion due the Distributor in its account as may from time to time be designated by the Distributor, deposit the net amount due the Fund in the Fund’s account with its custodian (the “Custodian”), notify the Distributor (such notification to the Distributor to include the amount of such sales charge to be remitted by the Distributor to the dealer participating in the sale, computed pursuant to paragraph 9 hereof) and the Fund, respectively, of such deposits, such notification to be given as soon as practicable on the next business day stating the total amount deposited to said accounts during the previous business day. Such notification shall be confirmed in writing.

7. Shareholder Accounts . Upon receipt of any funds referred to in paragraph 6 hereof, CMISC will compute the number of shares purchased by the shareholder according to the net asset value of Fund shares next determined after such receipt less the applicable sales charge, calculated pursuant to paragraph 9 hereof; and

(a) in the case of a new shareholder, open and maintain an open account for such shareholder in the name or names set forth in the subscription application form;

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(b) if the Trustees of the Trust have resolved that all of the Trust’s shares of beneficial interest, or all of the shares of a particular series or class, shall be issued in certificated form, and if specifically requested in writing by the shareholder, countersign, issue and mail, by first class mail, to the shareholder at his or her address set forth in the shareholder records of the Trust maintained by CMISC a share certificate for full shares purchased.

(c) send to the shareholder a confirmation indicating the amount of full and fractional shares purchased (in the case of fractional shares, rounded to three decimal places) and the price per share; and

(d) in the case of a request to establish an accumulation plan, withdrawal plan, group plan or other plan or program being offered by the Fund’s Prospectus, open and maintain such plan or program for the shareholder in accordance with the terms thereof;

all subject to any reasonable instructions which the Distributor or the Trust may give to CMISC with respect to rejection of orders for shares.

8. Unpaid Checks . In the event that any check or other order for payment of money on the account of any shareholder or new investor is returned for any reason, CMISC will take such steps, including imposition of a reasonable processing or handling fee on such shareholder or investor, as CMISC may, in CMISC’s discretion, deem appropriate, or as the Trust or the Distributor may instruct CMISC.

9. Sales Charge . In computing the number of shares to credit to the account of a shareholder pursuant to paragraph 7 hereof, CMISC will calculate the total of the applicable Distributor and representative sales charges, commission or other amount, if any, with respect to each purchase as set forth in the Prospectus and in accordance with any notification filed with respect to combined and accumulated purchases. CMISC will also determine the portion of each sales charge, commission or other amount, if any, payable by the Distributor to the dealer or other amount, payable by the Distributor to the dealer participating in the sale in accordance with such schedules as are from time to time delivered by the Distributor to CMISC.

10. Dividends and Distributions . The Trust will promptly notify CMISC of the declaration of any dividends or distribution with respect to Fund shares, the amount of such dividend or distribution, the date each such dividend or distribution shall be paid, and the record date for determination of shareholders entitled to receive such dividend or distribution. As Dividend Disbursing Agent, CMISC will, on or before the payment date of any such dividend or distribution, notify the Custodian of the estimated amount of cash required to pay such dividend or distribution, and the Trust agrees that on or before the mailing date of such dividend or distribution it will instruct the Custodian to make available to CMISC sufficient funds therefor in the dividend and distribution account maintained by CMISC with the Custodian. As Dividend Disbursing Agent, CMISC will prepare and distribute to shareholders any funds to which they are entitled by reason of any dividend or distribution and, in the case of shareholders entitled to receive additional shares by reason of any such dividend or distribution, CMISC will make appropriate credits to their accounts and prepare and mail to shareholders a confirmation statement and, if required, a certificate in respect of such additional shares.

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11. Repurchase and Redemptions . CMISC will receive and stamp with the date of receipt all certificates and requests delivered to CMISC for repurchase or redemption of shares and CMISC will process such repurchases as agent for the Distributor and such redemptions as agent for the Trust as follows:

(a) If such certificate or request complies with standards for repurchase or redemption approved from time to time by the Trust, CMISC will, on or prior to the seventh calendar day succeeding the receipt of any such request for repurchase or redemption in good order, deposit any contingent deferred sales charge (“CDSC”) due the Distributor in its account with such bank as may from time to time be designated by the Distributor and pay to the shareholder from funds deposited by the Trust from time to time in the repurchase and redemption account maintained by CMISC with its cash management bank, the appropriate repurchase or redemption price, as the case may be, as set forth in the Prospectus;

(b) If such certificate or request does not comply with said standards for repurchase or redemption as approved by the Trust, CMISC will promptly notify the shareholder of such fact, together with the reason therefor, and shall effect such repurchase or redemption at the price in effect at the time of receipt of documents complying with said standards, or, in the case of a repurchase, at such other time as the Distributor, as agent for the Trust, shall so direct; and

(c) CMISC shall notify the Trust and the Distributor as soon as practicable on each business day of the total number of Fund shares covered by requests for repurchase or redemption which were received by CMISC in proper form on the previous business day, and shall notify the Distributor of deposits to its account with respect to any CDSC, such notification to be confirmed in writing.

12. Systematic Withdrawal Plans . CMISC will administer systematic withdrawal plans pursuant to the provisions of withdrawal orders duly executed by shareholders and the relevant Fund’s Prospectus. Payments upon such withdrawal orders shall be made by CMISC from the appropriate account maintained by the Trust with the Custodian. Prior to the payment date CMISC will withdraw from a shareholder’s account and present for repurchase or redemption as many shares as shall be sufficient to make such withdrawal payment pursuant to the provisions of the shareholder’s withdrawal plan and the relevant Fund’s Prospectus.

13. Letters of Intent and Other Plans . CMISC will process such letters of intent for investing in Fund shares as are provided for in the Prospectus, and CMISC will act as escrow agent pursuant to the terms of such letters of intent duly executed by shareholders. CMISC will make appropriate deposits to the account of the Distributor for the adjustment of sales charges as therein provided and will currently report the same to the Distributor, it being understood, however, that computations of any adjustment of sales charge shall be the responsibility of the Distributor or the Trust. CMISC will process such accumulation plans, group programs and other plans or programs for investing in shares as are provided for in the Prospectus. In connection with any such plan or program, and with withdrawal plans described in paragraph 12 hereof, CMISC will act as plan agent for shareholders and in so acting shall not be the agent of the Trust.

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14. Tax Returns and Reports . CMISC will prepare, file with the Internal Revenue Service and any other federal, state or local governmental agency which may require such filing, and, if required, mail to shareholders such returns for reporting dividends and distributions paid by the Funds as are required to be so prepared, filed and mailed by applicable laws, rules and regulations, and CMISC will withhold such sums as are required to be withheld under applicable Federal and state income tax laws, rules and regulations.

15. Record Keeping . CMISC will maintain records, which at all times will be the property of the Trust and available for inspection by the Trust and Distributor, showing for each shareholder’s account the following:

(a) Name, address and United States taxpayer identification or Social Security number, if provided (or amounts withheld with respect to dividends and distributions on shares if a taxpayer identification or Social Security number if not provided);

(b) Number of shares held and number of shares for which certificates have been issued;

(c) Historical information regarding the account of each shareholder, including dividends and distributions paid, if any, and the date and price for all transactions on a shareholder’s account;

(d) Any stop or restraining order placed against a shareholder’s account;

(e) Information with respect to withholdings of taxes on dividends paid to foreign accounts; and

(f) Any instruction as to letters of intent, record address, and any correspondence or instructions relating to the current maintenance of a shareholder’s account.

In addition, CMISC will keep and maintain on behalf of the Trust all records which the Trust or CMISC is required to keep and maintain pursuant to any applicable statute, rule or regulation, including without limitation, Rule 31(a)-1 under the Investment Company Act of 1940, relating to the maintenance of records in connection with the services to be provided hereunder. CMISC shall be obligated to maintain at its expense only those records necessary to carry out its duties hereunder and the remaining records will be preserved at the Trust’s expense for the periods prescribed by law.

16. Other Information Furnished . CMISC will furnish to the Trust and the Distributor such other information, including shareholder lists and statistical information as may be agreed upon from time to time between CMISC and the Trust. CMISC shall notify the Trust of any request or demand to inspect the share records books of the Trust and will act upon the instructions of the Trust as to permitting or refusing such inspection.

17. Shareholder Inquiries . CMISC will respond promptly to written correspondence from shareholders, registered representatives of broker-dealers engaged in selling Fund shares, the Trust and the Distributor relating to its duties hereunder, and such other correspondence as may from time to time be mutually agreed upon between CMISC and the Trust. CMISC also will respond to telephone inquiries from shareholders with respect to existing accounts.

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18. Communications to Shareholders and Meetings . CMISC will determine all shareholders entitled to receive, and will address and mail, all communications by the Trust to its shareholders, including quarterly and annual reports to shareholders, proxy material for meetings of shareholders and periodic communications to shareholders. CMISC will receive, examine and tabulate return proxy cards for meetings of shareholders and certify the vote to the Trust.

19. Insurance . CMISC will not reduce or allow to lapse any of its insurance coverage from time to time in effect, including but not limited to Errors and Omissions, Fidelity Bond and Electronic Data Processing coverage, without the prior written consent of the Trust.

20. Duty of Care and Indemnification . CMISC will at all times use reasonable care and act in good faith in performing its duties hereunder. CMISC will not be liable or responsible for delays or errors by reason of circumstances beyond its control, including without limitation, acts of civil or military authority, national or state emergencies, labor difficulties, fire, mechanical breakdown, flood or catastrophe, acts of God, insurrection, war, riots or failure of transportation, communication or power supply.

CMISC may rely on certifications of the Secretary, any Assistant Secretary, the President, any Vice President, the Treasurer or any Assistant Treasurer of the Trust as to proceedings or facts in connection with any action taken by the shareholders or Trustees of the Trust, and upon instructions not inconsistent with this Agreement from the President, any Vice President, the Treasurer or any Assistant Treasurer of the Trust. CMISC may apply to counsel for the Trust, at the Trust’s expense, or its own counsel for advice whenever it deems expedient. With respect to any action taken on the basis of such certifications or instructions or in accordance with the advice of counsel for instructions or in accordance with the advice of counsel for the Trust, the Trust will indemnify and hold harmless CMISC from any and all losses, claims, damages, liabilities and expenses (including reasonable counsel fees and expenses).

The Trust will indemnify CMISC against and hold CMISC harmless from any and all losses, claims, damages, liabilities and expenses (including reasonable counsel fees and expenses) in respect to any claim, demand, action or suit not resulting from CMISC’s bad faith or negligence and arising out of, or in connection with, its duties on behalf of the Trust under this Agreement.

CMISC shall also be indemnified and held harmless by the Trust against any loss, claim, damage, liability and expenses (including reasonable counsel fees and expenses) by reason of any act done by it in good faith and in reliance upon any instrument or certificate for shares believed by it (a) to be genuine and (b) to be signed, countersigned or executed by any person or persons authorized to sign, countersign, or execute such instrument or certificate.

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indemnification, and each party shall use reasonable care to identify and notify the other promptly concerning any situation which presents or appears likely to present a claim for indemnification.

21. Employees . CMISC is responsible for the employment, control and conduct of its agents and employees and for injury to such agents or employees or to others caused by such agents or employees. CMISC assumes full responsibility for its agents and employees under applicable statutes and agrees to pay all employer taxes thereunder.

CMISC shall maintain at its own expense insurance against public liability in a reasonable amount.

22. AML/CIP . CMISC agrees to provide anti-money laundering services to the Trust and to operate the Trust’s customer identification program, in each case in accordance with the written procedures developed by CMISC and adopted or approved by the Trustees of the Trust and with applicable law and regulation.

23. Termination . This Agreement shall continue indefinitely until terminated by not less than ninety (90) days’ written notice given by the Trust to CMISC or, by six (6) months written notice given by CMISC to the Trust. Upon termination hereof, the Trust shall pay such compensation as may be due to CMISC as of the date of such termination.

24. Successors . In the event that (i) in connection with termination of this Agreement a successor to any of CMISC’s duties or responsibilities hereunder is designated by the Trust by written notice to CMISC, or (ii) CMIA exercises its prerogative under paragraph 1 hereof to assume the duties and functions of CMISC hereunder, CMISC shall promptly, at the expense of the Trust (in the case of an event described in (i) above), transfer to such successor or CMIA, as the case may be, a certified list of the shareholders of the Funds (with name, address and taxpayer identification or Social Security number), and historical record of the account of each shareholder and the status thereof, all other relevant books, records, correspondence and other data established or maintained by CMISC under this Agreement in form reasonably acceptable to the Trust (if such form differs from the form in which CMISC has maintained the same, the Trust shall pay any expenses associated with transferring the same to such form), and will cooperate in the transfer of such duties and responsibilities, including provision for assistance from CMISC’s personnel in the establishment of books, records and other data by such successor or CMIA. CMISC shall, in the case of an event described in (i) above, be entitled to reasonable compensation and reimbursement of its out-of-pocket expenses in respect of assistance provided in accordance with the preceding sentence. Also, in the event of the termination of this Agreement, to the extent permitted by the agreements or licenses described below, CMISC and CMIA shall, if requested by the Trustees of the Trust, assign to any entity wholly owned, directly or indirectly, by CMIA (or its successors) or by the Trust, or any of them, all of their rights under any existing agreements to which either of them is a party and pursuant to which either has a right to have access to data processing capability in connection with the services contemplated by this Agreement and under any licenses to use third-party software in connection with the services contemplated by this Agreement and under any licenses to use third-party software in connection therewith, and in connection with such assignment shall grant to the assignee an irrevocable right and license or sublicenses, on a non-exclusive basis, to use any software used in connection therewith and, on an exclusive basis, any proprietary rights or interest which it has under such agreements or licenses.

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25. Use of Affiliated Companies and Subcontractors . In connection with the services to be provided by CMISC or CMIA under this Agreement, either CMISC or CMIA may, to the extent it deems appropriate, and subject to compliance with the requirements of applicable laws and regulations and upon receipt of approval of the Trustees, make use of (i) its affiliated companies and their directors, trustees, officers and employees and (ii) subcontractors selected by it, provided that it shall supervise and remain fully responsible for the services of all such third parties in accordance with and to the extent provided in this Agreement. All costs and expenses associated with services provided by any such third parties shall be borne by CMISC, CMIA or such parties.

26. Confidentiality . Each of CMISC and CMIA agrees on behalf of itself and its employees to treat confidentially and as proprietary information of the Trust all records and other information relative to the Trust and its prior, present or potential shareholders and not to use such records and information for any purpose other than performance of its responsibilities and duties under this Agreement, except after prior notification to and approval in writing by the Trust, which approval shall not be unreasonably withheld and may not be withheld where CMIA may be exposed to civil or criminal contempt proceedings for failure to comply, when requested to divulge such information by duly constituted authorities or when so requested by the Trust.

27. Compliance . Each of CMISC and CMIA agree to comply with all applicable federal, state and local laws and regulations, codes, orders and government rules in the performance of its duties under this Agreement. Each of CMISC and CMIA agree to provide the Trust with such certifications, reports and other information as the Trust may reasonably request from time to time to assist it in complying with, and monitoring for compliance with, applicable laws, rules and regulations.

28. Miscellaneous . This Agreement shall be construed in accordance with and governed by the laws of the Commonwealth of Massachusetts.

The captions in this Agreement are included for convenience of reference only and in no way define or limit any of the provisions of this Agreement or otherwise affect their construction or effect. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument.

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A copy of the Declaration of Trust of the Trust is on file with the Secretary of the State of Delaware, and notice is hereby given that this instrument is executed on behalf of the Trustees of the Trust as Trustees and not individually and that the obligations of or arising out of the instrument are not binding upon any of the Trustees or officers or shareholders individually, but binding only upon the assets and property of the Trust.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.


COLUMBIA FUNDS SERIES TRUST
On behalf of the Funds listed in the attached Appendix I

By:		/s/ Joseph F. DiMaria
Name:		Joseph F. DiMaria
Title:		Chief Accounting Officer

COLUMBIA MANAGEMENT INVESTMENT SERVICES CORP.

By:		/s/ Lyn Kephart-Strong
Name:		Lyn Kephart-Strong
Title:		Director

COLUMBIA MANAGEMENT INVESTMENT ADVISERS, LLC

By:		/s/ William F. Truscott
Name:		William F. Truscott
Title:		Chairman

Transfer, Dividend Disbursing and Shareholders’ Servicing Agent Agreement

SCHEDULE A

Payments under the Agreement to CMISC shall be made in the first two weeks of the month following the month in which a service is rendered or an expense incurred.

Each Fund shall pay to CMISC for the services to be provided by CMISC under the Agreement an amount equal to the sum of the following:

A per account fee as agreed to from time to time by the Fund and CMISC; PLUS

The Fund’s Allocated Share of CMISC Reimbursable Out-of-Pocket Expenses; PLUS

Sub-Transfer Agency Fees.

In addition, CMISC shall be entitled to retain as additional compensation for its services all CMISC revenues for fees for wire, telephone, and redemption orders, IRA trustee agent fees and account transcripts due CMISC from shareholders of the Fund and interest (net of bank charges) earned with respect to balances in the accounts referred to in paragraph 2 of the Agreement.

All determinations hereunder shall be in accordance with generally accepted accounting principles and subject to audit by the Funds’ independent accountants.

Definitions

“ Allocated Share ” for any month means that percentage of CMISC Reimbursable Out-of-Pocket Expenses which would be allocated to a Fund for such month in accordance with the methodology described below under the heading “Methodology of Allocating CMISC Reimbursable Out-of-Pocket Expenses.”

“ CMISC Reimbursable Out-of-Pocket Expenses ” means (i) out-of-pocket expenses incurred on behalf of the Funds by CMISC for stationery, forms, postage and similar items and those expenses identified as “Out-of-Pocket Expenses” below and (ii) networking account fees paid to dealer firms by CMISC on shareholder accounts established or maintained pursuant to the National Securities Clearing Corporation’s networking system, which fees are approved by the Trustees from time to time.

“ Sub-Transfer Agency Fees ” means such fees and expenses paid by CMISC or its affiliates to dealer firms or transfer agents that maintain omnibus accounts with a Fund as agreed to from time to time by the Fund and CMISC.

“ Out-of-Pocket Expenses ” also include, but are not limited to, the following items:

•

Microfiche/microfilm production

•

Magnetic media tapes and freight

•

Printing costs, including certificates, envelopes, checks and stationery

•

Postage bulk, pre-sort, ZIP+4, barcoding, first class direct pass through to the Trust

Schedule A to Transfer, Dividend Disbursing and Shareholders’ Servicing Agent Agreement

•

Telephone and telecommunication costs, including all lease, maintenance and line costs

•

Proxy solicitations, mailings and tabulations

•

Daily & Distributions advice mailings

•

Shipping, Certified and Overnight mail and insurance

•

Year-end forms and mailings

•

Duplicating services

•

Courier services

•

Record retention as required by the Trust, retrieval and destruction costs, including, but not limited to, exit fees charged by third party record keeping vendors

•

Third party audit reviews

•

Such other miscellaneous expenses reasonably incurred by CMISC in performing its duties and responsibilities under this Agreement.

The Funds agree that postage and mailing expenses will be paid on the day of or prior to mailing as agreed with CMISC. In addition, the Funds will promptly reimburse CMISC for any other unscheduled expenses incurred by CMISC whenever the Funds and CMISC mutually agree that such expenses are not otherwise properly borne by CMISC as part of its duties under the Agreement.

Methodology of Allocating CMISC Reimbursable Out-of-Pocket Expenses

CMISC Reimbursable Out-of-Pocket Expenses are allocated to the Funds as follows:


A.	Identifiable	Based on actual services performed and invoiced to a Fund.

B.	Unidentifiable	Allocation will be based on three evenly weighted factors.

		• number of shareholder accounts

		• number of transactions

		• average assets

Schedule A to Transfer, Dividend Disbursing and Shareholders’ Servicing Agent Agreement

Appendix I


Trust	Funds	Custodian

Columbia Funds Series Trust	Corporate Bond Portfolio	State Street

	Mortgage- and Asset-Backed Portfolio	State Street

	Columbia Asset Allocation Fund II	State Street

	Columbia California Intermediate Municipal Bond Fund	State Street

	Columbia Convertible Securities Fund	State Street

	Columbia Georgia Intermediate Municipal Bond Fund	State Street

	Columbia Global Value Fund	State Street

	Columbia High Income Fund	State Street

	Columbia International Value Fund	State Street

	Columbia Large Cap Core Fund	State Street

	Columbia Large Cap Enhanced Core Fund	State Street

	Columbia Large Cap Index Fund	State Street

	Columbia Large Cap Value Fund	State Street

	Columbia LifeGoal Balanced Growth Portfolio	State Street

	Columbia LifeGoal Growth Portfolio	State Street

	Columbia LifeGoal Income and Growth Portfolio	State Street

	Columbia LifeGoal Income Portfolio	State Street

	Columbia Marsico 21st Century Fund	State Street

	Columbia Marsico Focused Equities Fund	State Street

	Columbia Marsico Global Fund	State Street

	Columbia Marsico Growth Fund	State Street

	Columbia Marsico International Opportunities Fund	State Street

	Columbia Maryland Intermediate Municipal Bond Fund	State Street

	Columbia Masters International Equity Portfolio	State Street

	Columbia Mid Cap Index Fund	State Street

	Columbia Mid Cap Value Fund	State Street

	Columbia Multi-Advisor International Equity Fund	State Street

	Columbia North Carolina Intermediate Municipal Bond Fund	State Street

	Columbia Overseas Value Fund	State Street

	Columbia Short Term Bond Fund	State Street

	Columbia Short Term Municipal Bond Fund	State Street

	Columbia Small Cap Growth Fund II	State Street

Appendix I to Transfer, Dividend Disbursing and Shareholders’ Servicing Agent Agreement


Trust	Funds	Custodian

	Columbia Small Cap Index Fund	State Street

	Columbia Small Cap Value Fund II	State Street

	Columbia South Carolina Intermediate Municipal Bond Fund	State Street

	Columbia Total Return Bond Fund	State Street

	Columbia Virginia Intermediate Municipal Bond Fund	State Street

Appendix I to Transfer, Dividend Disbursing and Shareholders’ Servicing Agent Agreement

Exhibit (h)(5)

TRANSFER, DIVIDEND DISBURSING AND

SHAREHOLDERS’ SERVICING AGENT AGREEMENT

This agreement (the “Agreement”) is made as of this 1 ^st day of May, 2010, by and between COLUMBIA FUNDS SERIES TRUST, a Delaware statutory trust acting on behalf of Class Y shares of its series listed on Appendix I hereto (as the same may from time to time be amended to add or delete one or more series of such trust) (such trust being hereinafter referred to as the “Trust” and each series of the Trust being hereinafter referred to as a “Fund”), Columbia Management Investment Services Corp. (formerly, RiverSource Service Corporation), a Minnesota corporation (“CMISC”), and Columbia Management Investment Advisers, LLC (formerly, RiverSource Investments, LLC) (“CMIA”), an Minnesota limited liability company.

WHEREAS, the Trust is a registered investment company and desires that CMISC perform certain services for the Funds;

WHEREAS, CMISC is willing to perform such services upon the terms and subject to the conditions set forth herein; and

NOW THEREFORE, in consideration of the mutual promises and covenants set forth herein, the parties hereto agree as follows:

1. Appointment . The Trust hereby appoints CMISC to act as Transfer Agent, Dividend Disbursing Agent and Shareholders’ Servicing Agent for the Funds with respect to Class Y shares, and CMISC accepts such appointments and will perform the respective duties and functions of such offices in the manner hereinafter set forth.

Schedule A hereto sets forth the compensation and reimbursement arrangements to be effective as of the date of this Agreement, and the treatment of all interest earned with respect to balances in the accounts maintained by CMISC in connection with the sale and redemption of Class Y shares of the Funds, net of any charges in connection with such accounts.

supplements thereto hereafter filed. The Prospectus(es) and Statement(s) of Additional Information contained in such Registration Statement, as from time to time amended and supplemented, together are herein collectively referred to as the “Prospectus.”

4. Share Certificates . If the Trustees of the Trust shall have resolved that all of the Fund’s Class Y shares of beneficial interest shall be issued in certificated form, CMISC shall maintain a sufficient supply of blank share certificates representing such Class Y shares, in the form approved from time to time by the Trustees of the Trust. Such blank share certificates shall be properly signed, manually or by facsimile signature, by the duly authorized officers of the Trust, and shall bear the seal or facsimile thereof of the Trust; and notwithstanding the death, resignation or removal of any officer of the Trust authorized to sign such share certificates, CMISC may continue to countersign certificates which bear the manual or facsimile signature of such officer until otherwise directed by the Trust.

5. Lost or Destroyed Certificates . In case of the alleged loss or destruction of any shareholder certificate, no new certificate shall be issued in lieu thereof, unless there shall first be furnished to CMISC an affidavit of loss or non-receipt by the holder of Class Y shares with respect to which a certificate has been lost or destroyed, supported by an appropriate bond satisfactory to CMISC and the Trust issued by a surety company satisfactory to CMISC.

7. Shareholder Accounts . Upon receipt of any funds referred to in paragraph 6 hereof, CMISC will compute the number of a Fund’s Class Y shares purchased by the shareholder according to the net asset value of a Fund’s Class Y shares next determined after such receipt; and

(a) in the case of a new shareholder, open and maintain an open account for such shareholder in the name or names set forth in the subscription application form;

(b) if the Trustees of the Trust have resolved that all of the Class Y shares of a particular Fund, shall be issued in certificated form, and if specifically requested in writing by the shareholder, countersign, issue and mail, by first class mail, to the shareholder at his or her address set forth in the shareholder records of the Trust maintained by CMISC a share certificate for full Class Y shares purchased; and

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(c) send to the shareholder a confirmation indicating the amount of full and fractional Class Y shares purchased (in the case of fractional Class Y shares, rounded to three decimal places) and the price per share; and

all subject to any reasonable instructions which the Distributor or the Trust may give to CMISC with respect to rejection of orders for Class Y shares.

9. [RESERVED.]

10. Dividends and Distributions . The Trust will promptly notify CMISC of the declaration of any dividends or distribution with respect to a Fund’s Class Y shares, the amount of such dividend or distribution, the date each such dividend or distribution shall be paid, and the record date for determination of shareholders entitled to receive such dividend or distribution. As Dividend Disbursing Agent, CMISC will, on or before the payment date of any such dividend or distribution, notify the Custodian of the estimated amount of cash required to pay such dividend or distribution, and the Trust agrees that on or before the mailing date of such dividend or distribution it will instruct the Custodian to make available to CMISC sufficient funds therefor in the dividend and distribution account maintained by CMISC with the Custodian. As Dividend Disbursing Agent, CMISC will prepare and distribute to shareholders any funds to which they are entitled by reason of any dividend or distribution and, in the case of shareholders entitled to receive additional Class Y shares by reason of any such dividend or distribution, CMISC will make appropriate credits to their accounts and prepare and mail to shareholders a confirmation statement and, if required, a certificate in respect of such additional Class Y shares.

11. Repurchase and Redemptions . CMISC will receive and stamp with the date of receipt all certificates and requests delivered to CMISC for repurchase or redemption of Class Y shares and CMISC will process such repurchases as agent for the Distributor and such redemptions as agent for the Trust as follows:

(a) If such certificate or request complies with standards for repurchase or redemption approved from time to time by the Trust, CMISC will, on or prior to the seventh calendar day succeeding the receipt of any such request for repurchase or redemption in good order, pay to the shareholder from funds deposited by the Trust from time to time in the repurchase and redemption account maintained by CMISC with its cash management bank, the appropriate repurchase or redemption price, as the case may be, as set forth in the Prospectus;

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(c) CMISC shall notify the Trust as soon as practicable on each business day of the total number of a Fund’s Class Y shares covered by requests for repurchase or redemption which were received by CMISC in proper form on the previous business day, such notification to be confirmed in writing.

12. Systematic Withdrawal Plans . CMISC will administer systematic withdrawal plans pursuant to the provisions of withdrawal orders duly executed by shareholders and the relevant Fund’s Prospectus. Payments upon such withdrawal orders shall be made by CMISC from the appropriate account maintained by the Trust with the Custodian. Prior to the payment date CMISC will withdraw from a shareholder’s account and present for repurchase or redemption as many Class Y shares as shall be sufficient to make such withdrawal payment pursuant to the provisions of the shareholder’s withdrawal plan and the relevant Fund’s Prospectus.

13. [RESERVED.]

(a) Name, address and United States taxpayer identification or Social Security number, if provided (or amounts withheld with respect to dividends and distributions on Class Y shares if a taxpayer identification or Social Security number if not provided);

(b) Number of Class Y shares held and number of Class Y shares for which certificates have been issued;

(c) Historical information regarding the account of each shareholder, including dividends and distributions paid, if any, and the date and price for all transactions on a shareholder’s account;

(d) Any stop or restraining order placed against a shareholder’s account;

(e) Information with respect to withholdings of taxes on dividends paid to foreign accounts; and

(f) Any instruction as to record address, and any correspondence or instructions relating to the current maintenance of a shareholder’s account.

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17. Shareholder Inquiries . CMISC will respond promptly to written correspondence from shareholders, registered representatives of broker-dealers engaged in selling a Fund’s Class Y shares, the Trust and the Distributor relating to its duties hereunder, and such other correspondence as may from time to time be mutually agreed upon between CMISC and the Trust. CMISC also will respond to telephone inquiries from shareholders with respect to existing accounts.

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CMISC shall also be indemnified and held harmless by the Trust against any loss, claim, damage, liability and expenses (including reasonable counsel fees and expenses) by reason of any act done by it in good faith and in reliance upon any instrument or certificate for Class Y shares believed by it (a) to be genuine and (b) to be signed, countersigned or executed by any person or persons authorized to sign, countersign, or execute such instrument or certificate.

In any case in which a party to this Agreement may be asked to indemnify or hold harmless the other party hereto, the party seeking indemnification shall advise the other party of all pertinent facts concerning the situation giving rise to the claim or potential claim for indemnification, and each party shall use reasonable care to identify and notify the other promptly concerning any situation which presents or appears likely to present a claim for indemnification.

CMISC shall maintain at its own expense insurance against public liability in a reasonable amount.

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correspondence and other data established or maintained by CMISC under this Agreement in form reasonably acceptable to the Trust (if such form differs from the form in which CMISC has maintained the same, the Trust shall pay any expenses associated with transferring the same to such form), and will cooperate in the transfer of such duties and responsibilities, including provision for assistance from CMISC’s personnel in the establishment of books, records and other data by such successor or CMIA. CMISC shall, in the case of an event described in (i) above, be entitled to reasonable compensation and reimbursement of its out-of-pocket expenses in respect of assistance provided in accordance with the preceding sentence. Also, in the event of the termination of this Agreement, to the extent permitted by the agreements or licenses described below, CMISC and CMIA shall, if requested by the Trustees of the Trust, assign to any entity wholly owned, directly or indirectly, by CMIA (or its successors) or by the Trust, or any of them, all of their rights under any existing agreements to which either of them is a party and pursuant to which either has a right to have access to data processing capability in connection with the services contemplated by this Agreement and under any licenses to use third-party software in connection with the services contemplated by this Agreement and under any licenses to use third-party software in connection therewith, and in connection with such assignment shall grant to the assignee an irrevocable right and license or sublicenses, on a non-exclusive basis, to use any software used in connection therewith and, on an exclusive basis, any proprietary rights or interest which it has under such agreements or licenses.

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28. Miscellaneous . This Agreement shall be construed in accordance with and governed by the laws of the Commonwealth of Massachusetts.

-8-

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.


COLUMBIA FUNDS SERIES TRUST
On behalf of the Funds listed in the attached Appendix I

By:		/s/ Joseph F. DiMaria
Name:		Joseph F. DiMaria
Title:		Chief Accounting Officer

COLUMBIA MANAGEMENT INVESTMENT SERVICES CORP.

By:		/s/ Lyn Kephart-Strong
Name:		Lyn Kephart-Strong
Title:		Director

COLUMBIA MANAGEMENT INVESTMENT ADVISERS, LLC

By:		/s/ William F. Truscott
Name:		William F. Truscott
Title:		Chairman

Transfer, Dividend Disbursing and Shareholders’ Servicing Agent Agreement – Class Y Shares

SCHEDULE A

Payments under the Agreement to CMISC shall be made in the first two weeks of the month following the month in which a service is rendered or an expense incurred.

Each Fund with respect to Class Y shares shall pay to CMISC for the services to be provided by CMISC under the Agreement an amount equal to the sum of the following:

A per account fee as agreed to from time to time by the Fund with respect to Class Y shares and CMISC; PLUS

the Allocated Share of CMISC Reimbursable Out-of-Pocket Expenses for the Fund’s Class Y shares.

All determinations hereunder shall be in accordance with generally accepted accounting principles and subject to audit by the Funds’ independent accountants.

Definitions

“ Allocated Share ” for any month means that percentage of CMISC Reimbursable Out-of-Pocket Expenses which would be allocated to Class Y shares of a Fund for such month in accordance with the methodology described below under the heading “Methodology of Allocating CMISC Reimbursable Out-of-Pocket Expenses.”

“ CMISC Reimbursable Out-of-Pocket Expenses ” means out-of-pocket expenses incurred on behalf of the Funds by CMISC and allocated to Class Y of the Funds for stationery, forms, postage and similar items and those expenses identified as “Out-of-Pocket Expenses” below and (ii) networking account fees paid to dealer firms by CMISC on shareholder accounts established or maintained pursuant to the National Securities Clearing Corporation’s networking system, which fees are approved by the Trustees from time to time.

“ Out-of-Pocket Expenses ” also include, but are not limited to, the following items:

•

Microfiche/microfilm production

•

Magnetic media tapes and freight

•

Printing costs, including certificates, envelopes, checks and stationery

•

Postage bulk, pre-sort, ZIP+4, barcoding, first class direct pass through to the Trust

•

Telephone and telecommunication costs, including all lease, maintenance and line costs

•

Proxy solicitations, mailings and tabulations

•

Daily & Distributions advice mailings

Schedule A to Transfer, Dividend Disbursing and Shareholders’ Servicing Agent Agreement – Class Y Shares

•

Shipping, Certified and Overnight mail and insurance

•

Year-end forms and mailings

•

Duplicating services

•

Courier services

•

Record retention as required by the Trust, retrieval and destruction costs, including, but not limited to, exit fees charged by third party record keeping vendors

•

Third party audit reviews

•

Such other miscellaneous expenses reasonably incurred by CMISC in performing its duties and responsibilities under this Agreement.

The Funds agree that postage and mailing expenses will be paid on the day of or prior to mailing as agreed with CMISC. In addition, the Funds will promptly reimburse CMISC for any other unscheduled expenses incurred by CMISC whenever the Funds, on behalf of their Class Y shares, and CMISC mutually agree that such expenses are not otherwise properly borne by CMISC as part of its duties under the Agreement.

Methodology of Allocating CMISC Reimbursable Out-of-Pocket Expenses

CMISC Reimbursable Out-of-Pocket Expenses are allocated to Class Y shares of the Funds as follows:

Fund Level



A.	Identifiable	Based on actual services performed and invoiced to a Fund.

B.	Unidentifiable	Allocation will be based on three evenly weighted factors.

		• number of shareholder accounts

		• number of transactions

		• average assets

Class Y Shares Level

Allocation to Class Y shares of a Fund will be effected consistent with the Funds’ currently effective Rule 18f-3 Multi-Class Plan.

Schedule A to Transfer, Dividend Disbursing and Shareholders’ Servicing Agent Agreement – Class Y Shares

Appendix I

Funds

Columbia Large Cap Value Fund

Columbia Mid Cap Value Fund

Columbia Large Cap Enhanced Core Fund

Columbia Short Term Bond Fund

Appendix I to Transfer, Dividend Disbursing and Shareholders’ Servicing Agent Agreement – Class Y Shares

Exhibit (h)(7)

MUTUAL FUND FEE AND EXPENSE AGREEMENT

THIS AGREEMENT is made as of this 1st day of May, 2010 by and among Columbia Funds Master Investment Trust, LLC, a Delaware limited liability company, for itself and on behalf of its series listed on Schedule A attached hereto, Columbia Funds Series Trust, a Delaware statutory trust, for itself and on behalf of its series listed on Schedule A attached hereto, Columbia Funds Variable Insurance Trust I, a Delaware statutory trust, for itself and on behalf of its series listed on Schedule A attached hereto, Columbia Funds Series Trust II, a Delaware statutory trust, for itself and on behalf of its series listed on Schedule A attached hereto, Columbia Management Investment Advisers, LLC (formerly, RiverSource Investments, LLC), a Minnesota limited liability company (“CMIA”) and Columbia Management Investment Distributors, Inc. (formerly, RiverSource Fund Distributors, Inc.), a Delaware corporation (“CMID”).

WHEREAS, Columbia Funds Master Investment Trust, LLC, Columbia Funds Series Trust, Columbia Funds Variable Insurance Trust I and Columbia Funds Series Trust II (each a “Company” and together, the “Companies”) are each open-end investment companies registered under the Investment Company Act of 1940;

WHEREAS, CMIA, an investment adviser registered under the Investment Advisers Act of 1940, serves as investment adviser to each of the Companies pursuant to separate investment advisory agreements (the “Investment Advisory Agreements”);

WHEREAS, CMIA serves as administrator to each of the Companies pursuant to an administrative services agreement (the “Administration Agreement”);

WHEREAS, CMID serves as distributor to Columbia Funds Series Trust, Columbia Funds Variable Insurance Trust I and Columbia Funds Series Trust II pursuant to a distribution agreement (the “Distribution Agreement”); and

WHEREAS, pursuant to a prior Mutual Fund Fee and Expense Agreement, the predecessor adviser, administrator and distributor to each of the Companies had committed to certain fee waivers and expense commitments and CMIA and CMID have agreed to commit to continue those same waivers and commitments;

NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and valuable consideration, the receipt whereof is hereby acknowledged, the parties hereto agree as follows:

1. Investment Advisory Fee Waivers. The parties hereby agree that CMIA shall waive any investment advisory fees payable to it under the Investment Advisory Agreements to the extent reflected for each series set forth in Schedule A attached hereto.

2. Administration Fee Waivers. The parties hereby agree that CMIA shall waive any administration fees payable to it under the Administration Agreement to the extent reflected for each series set forth in Schedule A attached hereto.

3. 12b-1 Distribution and Shareholder Servicing Fee Waivers. The parties hereby agree that CMID shall waive any 12b-1 distribution and/or shareholder servicing fees payable to it under the Distribution Agreements to the extent reflected for each series set forth in Schedule A attached hereto.

4. Limitation of Total Operating Expense Ratios—Investment Advisory, Administration Fee Ratios and Other Expenses. The parties hereby agree that CMIA as appropriate shall waive any advisory fees payable to it under the Investment Advisory Agreements, waive any administration fees payable to it under the Administration Agreement, or reimburse other expenses of the series to the extent necessary to ensure that covered expenses (as defined below) do not exceed the total operating expense ratio for each series set forth in Schedule A attached hereto, absent a determination by the Companies’ Boards of Trustees that extraordinary circumstances or a material reduction in portfolio assets has occurred that has made it appropriate to permit an increase in total operating expense ratios. “Covered expenses” include all expenses incurred directly by a series that are required to be included as an expense in a series’ Form N-1A Fee Table and accordingly exclude acquired fund fees and expenses, brokerage commissions and other transaction charges and interest on borrowed money and also exclude rule 12b-1 distribution and/or shareholder servicing fees and expenses that are deemed extraordinary by Columbia Funds Series Trust’s Board of Trustees. “Covered expenses” shall reflect the application of balance credits made available by the Companies’ custodian and custodial charges relating to overdrafts.

5. Automatic Renewal. This Agreement shall renew automatically, with respect to each series set forth in Schedule A, on the same terms, for a period of one year from the expiration of the waiver and/or expense commitment applicable to such series as set forth in Schedule A, unless prior to such an expiration, CMIA and/or CMID provide notice to the appropriate Board of Trustees of a Company of any proposals to increase, decrease or eliminate the series’ fee waivers and/or expense commitment, or to change the time period covered or any other terms thereof, for a subsequent period. Any renewal of this Agreement with respect to a series does not preclude CMIA or CMID from requesting that a Company’s Board of Trustees approve changes to the fee waivers and/or expense commitment, or to the time period covered or any other terms thereof, prior to a subsequent renewal.

6. Entire Agreement; Modification; Amendment. This Agreement constitutes the entire agreement of the parties with respect to its subject matter. Each provision herein shall be treated as separate and independent from any other provision or agreement herein and shall be enforceable notwithstanding the enforceability of any such other provision or agreement. In addition, each provision herein shall be treated as separate and independent with respect to each Company and shall be treated as separate and independent from such provision or agreement with respect to each of the other Companies. No modification or amendment of this Agreement shall be binding unless in writing and executed by the parties affected thereby.

[Signature Page Follows]

IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed by their officers designated below as of the day and year first above written.


COLUMBIA FUNDS SERIES TRUST,
COLUMBIA FUNDS MASTER INVESTMENT TRUST, LLC,
COLUMBIA FUNDS VARIABLE SERIES TRUST I,
COLUMBIA FUNDS SERIES TRUST II, Each for itself and on behalf of its respective series listed on this Schedule A

By:		/s/ Joseph F. DiMaria
Name:		Joseph F. DiMaria
Title:		Chief Accounting Officer

COLUMBIA MANAGEMENT INVESTMENT ADVISERS, LLC

By:		/s/ William F. Truscott
Name:		William F. Truscott
Title:		Chairman

COLUMBIA MANAGEMENT INVESTMENT DISTRIBUTORS, INC.

By:		/s/ William F. Truscott
Name:		William F. Truscott
Title:		Chairman

Mutual Fund Fee and Expense Agreement

S CHEDULE A

C OLUMBIA F UNDS S ERIES T RUST

C ONTRACTUAL A DVISORY /A DMINISTRATION F EE W AIVERS

P ERIOD FROM A UGUST 1, 2009 TO J ULY 31, 2010*

*	At the April 27-28, 2010 Board meeting, the waivers were extended for the period August 1, 2010 through July 31, 2011, upon the expiration of the then current period.

(1)	CMIA shall waive advisory fees payable to it under the Investment Advisory Agreement on assets invested in individual securities and CMIA-advised Corporate Bond Portfolio and Mortgage- and Asset-Backed Portfolio (the “Fixed Income Sector Portfolios”).

(2)	CMIA shall waive administration fees payable to it under the Administration Agreement on assets invested in other Columbia Funds (Fixed Income Sector Portfolios are not considered Columbia Funds).

Schedule A to Mutual Fund Fee and Expense Agreement

C OLUMBIA F UNDS S ERIES T RUST

E XPENSE C OMMITMENTS E STABLISHED AT O VERALL F UND L EVEL

P ERIOD FROM A UGUST 1, 2009 TO J ULY 31, 2010*


Fund-of-Fund	Fund Level Expense Commitment**

Columbia LifeGoal Income Portfolio	0.42	%

*	At the April 27-28, 2010 Board meeting, the expense commitment was extended for the period August 1, 2010 through July 31, 2011, upon the expiration of the then current period.

Waivers of CMIA advisory and/or administration fees and/or other expense reimbursements will result in the listed fund level expense commitments (excluding (i) those explicitly excluded from the definition of “Covered Expenses” in Section 4 of this Agreement; (ii) taxes; and (iii) the Board-approved class specific account expense relating to R Shares).

Schedule A to Mutual Fund Fee and Expense Agreement

C OLUMBIA F UNDS S ERIES T RUST

E XPENSE C OMMITMENTS E STABLISHED AT O VERALL F UND L EVEL

P ERIOD FROM A PRIL 30, 2008 TO J UNE 30, 2010


International Fund	Fund Level Expense Commitment*

Columbia Marsico Global Fund**	1.35	%

**	CMIA is entitled to recover from the Fund any fees waived and/or expenses reimbursed for a three year period following the date of such fee waiver and/or reimbursement if such recovery does not cause the Fund’s total operating expenses to exceed the expense commitment then in effect.

Schedule A to Mutual Fund Fee and Expense Agreement

C OLUMBIA F UNDS S ERIES T RUST

E XPENSE C OMMITMENTS E STABLISHED AT O VERALL F UND L EVEL

P ERIOD FROM A UGUST 1, 2009 TO J ULY 31, 2010


Masters Portfolio	Other Operating Expenses Cap*
Columbia Masters International Equity Portfolio	0.00	%

Schedule A to Mutual Fund Fee and Expense Agreement

C OLUMBIA F UNDS S ERIES T RUST II

E XPENSE C OMMITMENTS E STABLISHED AT F UND L EVEL

F ROM M ARCH 7, 2008 T HROUGH F EBRUARY 28, 2020


Columbia Funds Series Trust II	Other Operating Expenses Cap*
Columbia Retirement 2005 Portfolio	0	%
Columbia Retirement 2010 Portfolio	0	%
Columbia Retirement 2015 Portfolio	0	%
Columbia Retirement 2020 Portfolio	0	%
Columbia Retirement 2025 Portfolio	0	%
Columbia Retirement 2030 Portfolio	0	%
Columbia Retirement 2035 Portfolio	0	%
Columbia Retirement 2040 Portfolio	0	%

*	Waivers of CMIA advisory and/or administration fees and/or other expense reimbursements will result in the listed fund level expense commitments (excluding (i) those explicitly excluded from the definition of “Covered Expenses” in Section 4 of this Agreement; (ii) taxes; and (iii) advisory fees).

Schedule A to Mutual Fund Fee and Expense Agreement

A DVISORY F EE W AIVER FOR C OLUMBIA F UNDS

S UB - ADVISED BY M ARSICO C APITAL M ANAGEMENT , LLC (“M ARSICO ”)

E FFECTIVE J ANUARY 1, 2008 THROUGH

THE R ESPECTIVE E XPIRATION D ATES LISTED BELOW ¹

The dollar amount of the waiver of advisory fees equals the dollar amount calculated on a monthly basis based on an annualized fee rate of 0.45% of the applicable Fund’s assets minus the dollar amount calculated on a monthly basis based on the applicable annualized fee rate according to the below chart. To the extent that a Fund is benefitting from a separate expense limitation for a Fund sub-advised by Marsico, CMIA is not required to waive this portion of the advisory fee for that Fund.


Company/Fund	Fee Rate(%)		Expiration Date
Columbia Funds Series Trust
Columbia Marsico 21 ^st Century Fund			June 30, 2011
Columbia Marsico Focused Equities Fund			June 30, 2011
Columbia Marsico Growth Fund			June 30, 2011
Columbia Funds Variable Insurance Trust I
Columbia Marsico 21 ^st Century Fund, Variable Series ²			April 30, 2011
Columbia Marsico Focused Equities Fund, Variable Series			April 30, 2011
Columbia Marsico Growth Fund, Variable Series			April 30, 2011
Assets up to $18 billion	0.45	*
Assets in excess of $18 billion and up to $21 billion	0.40	*
Assets in excess of $21 billion	0.35	*
Columbia Funds Series Trust
Columbia Multi-Advisor International Equity Fund			June 30, 2011
Columbia Marsico International Opportunities Fund ²			June 30, 2011
Columbia Funds Variable Insurance Trust I
Columbia Marsico International Opportunities Fund, Variable Series ²			April 30, 2011
Assets up to $6 billion	.45	**
Assets in excess of $6 billion and up to $10 billion	.40	**
Assets in excess of $10 billion	.35	**

For purposes of the calculation, the assets sub-advised by Marsico in the following Columbia Funds will be aggregated: (i) Columbia Marsico Growth Fund, Variable Series; (ii) Columbia Marsico Focused Equities Fund, Variable Series; (iii) Columbia Marsico 21 ^st Century Fund, Variable Series; (iv) Columbia Marsico Growth Fund; (v) Columbia Marsico Focused Equities Fund; (vi) Columbia Marsico 21 ^st Century Fund; and (vii) any future Columbia U.S. equity fund sub-advised by Marsico which CMIA and Marsico mutually agree in writing.

For purposes of the calculation, the assets sub-advised by Marsico in the following Columbia Funds will be aggregated: (i) Columbia Marsico International Opportunities Fund, Variable Series; (ii) Columbia Marsico International Opportunities Fund; (iii) Columbia Multi-Advisor International Equity Fund; and (iv) any future Columbia international equity fund sub-advised by Marsico which CMIA and Marsico mutually agree in writing.

At its October 2007 meeting relating to the advisory contract renewal, the Board approved new sub-advisory fee rates and breakpoints for Columbia Funds sub-advised by Marsico, effective January 1, 2008. In this connection, CMIA agreed to waive its advisory fee to the extent necessary to allow for the impact of the new sub-advisory fee rates and breakpoints payable by a Fund to Marsico to be passed through to a Fund’s shareholders, except to the extent that a Fund is already benefiting from a fee waiver or expense cap provided by CMIA.

²	Currently, these funds have a separate contractual expense limitation.

Schedule A to Mutual Fund Fee and Expense Agreement

Effective as of the 1 ^st day of May, 2010.


COLUMBIA FUNDS SERIES TRUST,
COLUMBIA FUNDS MASTER INVESTMENT TRUST, LLC,
COLUMBIA FUNDS VARIABLE SERIES TRUST I,
COLUMBIA FUNDS SERIES TRUST II, Each for itself and on behalf of its respective series listed on this Schedule A

By:		/s/ Joseph F. DiMaria
Name:		Joseph F. DiMaria
Title:		Chief Accounting Officer

COLUMBIA MANAGEMENT INVESTMENT ADVISERS, LLC

By:		/s/ William F. Truscott
Name:		William F. Truscott
Title:		Chairman

COLUMBIA MANAGEMENT INVESTMENT DISTRIBUTORS, INC.

By:		/s/ William F. Truscott
Name:		William F. Truscott
Title:		Chairman

Schedule A to Mutual Fund Fee and Expense Agreement

Exhibit (h)(8)(i)

AMENDMENT TO FINANCIAL REPORTING SERVICES AGREEMENT

THIS AMENDMENT TO FINANCIAL REPORTING SERVICES AGREEMENT, dated as of April 30, 2010 (this “ Amendment ”), by and among each of the registered investment companies, or series thereof, listed on Schedule A hereto (the “ Funds ”), Columbia Management Advisors, LLC (“ CMA ”), State Street Bank and Trust Company (the “ Supplier ”) and Columbia Management Investment Advisers, LLC (formerly known as RiverSource Investments, LLC) (“ CMIA ”), amends the Financial Reporting Services Agreement, dated as of December 15, 2006, as amended and supplemented from time to time (the “ Agreement ”), by and among each of the Funds, CMA, and the Supplier. Capitalized terms used herein but not defined herein shall have the meanings given to such terms in the Agreement.

WHEREAS, Bank of America, N.A., the indirect parent company of CMA has entered into an agreement to sell the long-term asset management business of Columbia Management Group, LLC, including that portion of CMA’s business that relates to the management of the Funds, to Ameriprise Financial, Inc., the parent company of CMIA;

WHEREAS, immediately following the closing of such sale (the “Closing”), CMIA will act as advisor to the Funds;

WHEREAS, CMA seeks Supplier’s consent to assign its rights and obligations under the Agreement to CMIA; and

WHEREAS, the parties hereto desire to amend certain provisions of the Agreement as set forth below to effect the assignment from CMA to CMIA of its rights and obligations under the Agreement.

NOW, THEREFORE, in consideration of the promises and for other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the parties hereto agree as follows:

SECTION 1. ASSIGNMENT .

1.1. Consent to Assignment . The Supplier hereby consents to and approves of the assignment by CMA of its duties, rights and obligations under the Agreement to CMIA pursuant to section 20.0 of the Agreement. CMA hereby assigns to CMIA all of its duties, rights, obligations and future liabilities under the Agreement arising on or after the Closing, and CMIA hereby accepts such assignment.

1.2. Release . From and after the Closing, Supplier agrees to release CMA from any and all further duties, rights, obligations or liabilities under the Agreement arising out of any fact, act, omission, event, circumstance or condition occurring or commencing on or after the date of the Closing. All duties, rights, obligations or liabilities of CMA under the Agreement arising out of any fact, act, omission, event, circumstance or condition occurring or commencing before the date of the Closing remain the responsibility of CMA.

SECTION 2. AMENDMENT . The Agreement shall be amended as follows:

2.1. References to CMA Changed to CMIA . All references to CMA in the Agreement are replaced with references to CMIA (expected to be known as Columbia Management Investment Advisers, LLC following the Closing).

2.2. Amend Notice Addresses . The notice addresses appearing on page two of the Agreement for the Supplier, CMA or any Fund are deleted and replaced in their entirety with the addresses appearing on Exhibit A for the Supplier, CMIA or any Fund.

2.3. Relationship Manager . Pursuant to section 2.5 of the Agreement, CMIA and Supplier hereby appoint as Relationship Managers the persons listed on Exhibit B hereto.

2.4. Continuing Effectiveness . The amendments to the Agreement set forth in this Section 2 shall be deemed to be amendments to the Agreement, and the Agreement, as amended hereby, is hereby ratified, approved and confirmed in all respects.

2.5. Waiver of Any Notice Requirement . The parties hereby waive any notice that they may have been entitled to under the Agreement due to the amendments described in this Amendment.

SECTION 3. MISCELLANEOUS.

3.1. Execution in Counterparts . This Amendment may be executed by the parties hereto in multiple counterparts, each of which shall be deemed to be an original and all of which together shall constitute one and the same agreement.

3.2. Governing Law . This Amendment shall be governed by the internal laws, and not by the laws regarding conflicts of laws, of the Commonwealth of Massachusetts. Each party hereby submits to the exclusive jurisdiction of the courts of such state, and waives any objection to venue with respect to actions brought in such courts.

3.3. Successors and Assigns . This Amendment shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns.

3.4. Effectiveness . This Amendment shall take effect upon the Closing, and shall be of no force or effect in the event the Closing does not take place.

3.5. Notice . This Amendment is executed by an officer of each Fund, as an officer and not individually, and the obligations of this Amendment with respect to the Funds shall be binding upon the assets and properties of the Funds only and shall not be binding upon any of the trustees, officers, employees, agents or shareholders of the Funds individually.

(Signature Page Follows)

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their duly authorized officers as of the day and year first above written.


COLUMBIA FUNDS MASTER INVESTMENT TRUST, LLC
COLUMBIA FUNDS SERIES TRUST
COLUMBIA FUNDS SERIES TRUST I
COLUMBIA FUNDS SERIES TRUST II (formerly, Banc of America Funds Trust)
COLUMBIA FUNDS VARIABLE INSURANCE TRUST
COLUMBIA FUNDS VARIABLE INSURANCE TRUST I

By:		/s/ J. Kevin Connaughton
Name:		J. Kevin Connaughton
Title:		President

STATE STREET BANK AND TRUST COMPANY

By:		/s/ Joseph C. Antonellis
Name:		Joseph C. Antonellis
Title:		Vice Chairman

COLUMBIA MANAGEMENT ADVISORS, LLC

By:		/s/ J. Kevin Connaughton
Name:		J. Kevin Connaughton
Title:		Managing Director

COLUMBIA MANAGEMENT INVESTMENT ADVISERS, LLC

By:		/s/ Amy K. Johnson
Name:		Amy K. Johnson
Title:		Chief Administrative Officer

Schedule A

TRUST AND FUND LISTING

As of: May 1, 2010


Fund Name		Trust Name
Schedule A1 (Fund pays expenses)
Columbia Retirement 2005 Portfolio		Columbia Funds Series Trust II
Columbia Retirement 2010 Portfolio		Columbia Funds Series Trust II
Columbia Retirement 2015 Portfolio		Columbia Funds Series Trust II
Columbia Retirement 2020 Portfolio		Columbia Funds Series Trust II
Columbia Retirement 2025 Portfolio		Columbia Funds Series Trust II
Columbia Retirement 2030 Portfolio		Columbia Funds Series Trust II
Columbia Retirement 2035 Portfolio		Columbia Funds Series Trust II
Columbia Retirement 2040 Portfolio		Columbia Funds Series Trust II
Columbia Asset Allocation Fund		Columbia Funds Series Trust I
Columbia Asset Allocation Fund II		Columbia Funds Series Trust
Columbia Asset Allocation Fund, VS		Columbia Funds Variable Insurance Trust
Columbia Balanced Fund		Columbia Funds Series Trust I
Columbia Blended Equity Fund		Columbia Funds Series Trust I
Columbia Bond Fund		Columbia Funds Series Trust I
Columbia California Intermediate Municipal Bond Fund		Columbia Funds Series Trust
Columbia California Tax-Exempt Fund		Columbia Funds Series Trust I
Columbia Connecticut Intermediate Municipal Bond Fund		Columbia Funds Series Trust I
Columbia Connecticut Tax-Exempt Fund		Columbia Funds Series Trust I
Columbia Conservative High Yield Fund		Columbia Funds Series Trust I
Columbia Contrarian Core Fund		Columbia Funds Series Trust I
Columbia Convertible Securities Fund		Columbia Funds Series Trust
Columbia Core Bond Fund		Columbia Funds Series Trust I
Columbia Disciplined Value Fund		Columbia Funds Series Trust I
Columbia Dividend Income Fund		Columbia Funds Series Trust I
Columbia Emerging Markets Fund		Columbia Funds Series Trust I
Columbia Energy and Natural Resources Fund		Columbia Funds Series Trust I
Columbia Federal Securities Fund		Columbia Funds Series Trust I
Columbia Federal Securities Fund, VS		Columbia Funds Variable Insurance Trust
Columbia Georgia Intermediate Municipal Bond Fund		Columbia Funds Series Trust
Columbia Global Value Fund		Columbia Funds Series Trust
Columbia Greater China Fund		Columbia Funds Series Trust I
Columbia High Income Fund		Columbia Funds Series Trust
Columbia High Yield Fund, VS		Columbia Funds Variable Insurance Trust I
Columbia High Yield Municipal Fund		Columbia Funds Series Trust I
Columbia High Yield Opportunity Fund		Columbia Funds Series Trust I
Columbia Income Fund		Columbia Funds Series Trust I
Columbia Intermediate Bond Fund		Columbia Funds Series Trust I
Columbia Intermediate Municipal Bond Fund		Columbia Funds Series Trust I


Fund Name		Trust Name

Schedule A1 (Fund pays expenses)

Columbia International Bond Fund		Columbia Funds Series Trust I
Columbia International Fund, VS		Columbia Funds Variable Insurance Trust
Columbia International Growth Fund		Columbia Funds Series Trust I
Columbia International Stock Fund		Columbia Funds Series Trust I
Columbia International Value Fund		Columbia Funds Series Trust
Columbia Large Cap Core Fund		Columbia Funds Series Trust
Columbia Large Cap Enhanced Core Fund		Columbia Funds Series Trust
Columbia Large Cap Growth Fund		Columbia Funds Series Trust I
Columbia Large Cap Growth Fund, VS		Columbia Funds Variable Insurance Trust
Columbia Large Cap Value Fund		Columbia Funds Series Trust
Columbia Large Cap Value Fund, VS		Columbia Funds Variable Insurance Trust
Columbia Liberty Fund		Columbia Funds Series Trust I
Columbia Marsico 21st Century Fund		Columbia Funds Series Trust
Columbia Marsico 21st Century Fund, VS		Columbia Funds Variable Insurance Trust I
Columbia Marsico Focused Equities Fund		Columbia Funds Series Trust
Columbia Marsico Focused Equities Fund, VS		Columbia Funds Variable Insurance Trust I
Columbia Marsico Global Fund		Columbia Funds Series Trust
Columbia Marsico Growth Fund		Columbia Funds Series Trust
Columbia Marsico Growth Fund, VS		Columbia Funds Variable Insurance Trust I
Columbia Marsico International Opportunities Fund		Columbia Funds Series Trust
Columbia Marsico International Opportunities Fund, VS		Columbia Funds Variable Insurance Trust I
Columbia Marsico International Opportunities Master Portfolio		Columbia Funds Master Investment Trust, LLC
Columbia Mid Cap Growth Fund, VS		Columbia Funds Variable Insurance Trust I
Columbia Maryland Intermediate Municipal Bond Fund		Columbia Funds Series Trust
Columbia Massachusetts Intermediate Municipal Bond Fund		Columbia Funds Series Trust I
Columbia Massachusetts Tax-Exempt Fund		Columbia Funds Series Trust I
Columbia Masters International Equity Portfolio		Columbia Funds Series Trust
Columbia Mid Cap Core Fund		Columbia Funds Series Trust I
Columbia Mid Cap Growth Fund		Columbia Funds Series Trust I
Columbia Mid Cap Index Fund		Columbia Funds Series Trust
Columbia Mid Cap Value Fund		Columbia Funds Series Trust
Columbia Mid Cap Value Fund, VS		Columbia Funds Variable Insurance Trust
Columbia Money Market Fund, VS		Columbia Funds Variable Insurance Trust
Columbia Multi-Advisor International Equity Fund		Columbia Funds Series Trust
Columbia New Jersey Intermediate Municipal Bond Fund		Columbia Funds Series Trust I
Columbia New York Intermediate Municipal Bond Fund		Columbia Funds Series Trust I
Columbia New York Tax-Exempt Fund		Columbia Funds Series Trust I


Fund Name		Trust Name

Schedule A1 (Fund pays expenses)

Columbia North Carolina Intermediate Municipal Bond Fund		Columbia Funds Series Trust
Columbia Oregon Intermediate Municipal Bond Fund		Columbia Funds Series Trust I
Columbia Overseas Value Fund		Columbia Funds Series Trust
Columbia Pacific/Asia Fund		Columbia Funds Series Trust I
Columbia Real Estate Equity Fund		Columbia Funds Series Trust I
Columbia Rhode Island Intermediate Municipal Bond		Columbia Funds Series Trust I
Columbia S&P 500 Index Fund, VS		Columbia Funds Variable Insurance Trust
Columbia Select Large Cap Growth Fund		Columbia Funds Series Trust I
Columbia Select Large Cap Growth Fund, VS		Columbia Funds Variable Insurance Trust
Columbia Select Opportunities Fund		Columbia Funds Series Trust I
Columbia Select Small Cap Fund		Columbia Funds Series Trust I
Columbia Short-Intermediate Bond Fund		Columbia Funds Series Trust I
Columbia Short-Term Bond Fund		Columbia Funds Series Trust
Columbia Short-Term Municipal Bond Fund		Columbia Funds Series Trust
Columbia Small Cap Core Fund		Columbia Funds Series Trust I
Columbia Small Cap Growth Fund I		Columbia Funds Series Trust I
Columbia Small Cap Growth Fund II		Columbia Funds Series Trust
Columbia Small Cap Value Fund I		Columbia Funds Series Trust I
Columbia Small Cap Value Fund II		Columbia Funds Series Trust
Columbia Small Cap Value Fund, VS		Columbia Funds Variable Insurance Trust
Columbia Small Company Growth Fund, VS		Columbia Funds Variable Insurance Trust
Columbia South Carolina Intermediate Municipal Bond Fund		Columbia Funds Series Trust
Columbia Strategic Income Fund		Columbia Funds Series Trust I
Columbia Strategic Income Fund, VS		Columbia Funds Variable Insurance Trust
Columbia Strategic Investor Fund		Columbia Funds Series Trust I
Columbia Tax-Exempt Fund		Columbia Funds Series Trust I
Columbia Technology Fund		Columbia Funds Series Trust I
Columbia Total Return Bond Fund		Columbia Funds Series Trust
Columbia Value and Restructuring Fund		Columbia Funds Series Trust I
Columbia Value and Restructuring Fund, VS		Columbia Funds Variable Insurance Trust
Columbia Virginia Intermediate Municipal Bond Fund		Columbia Funds Series Trust
Columbia World Equity Fund		Columbia Funds Series Trust I
Columbia LifeGoal Income Portfolio		Columbia Funds Series Trust
Corporate Bond Portfolio		Columbia Funds Series Trust
Mortgage and Asset Backed Portfolio		Columbia Funds Series Trust
Columbia Large Cap Index Fund		Columbia Funds Series Trust
Columbia LifeGoal Balanced Growth Portfolio		Columbia Funds Series Trust
Columbia LifeGoal Growth Portfolio		Columbia Funds Series Trust
Columbia LifeGoal Income and Growth Portfolio		Columbia Funds Series Trust
Columbia Small Cap Index Fund		Columbia Funds Series Trust
Columbia U.S. Treasury Index Fund		Columbia Funds Series Trust I

Schedule A2 (Unified Fee Funds)

CMG Ultra Short Term Bond Fund		Columbia Funds Series Trust I

Exhibit A

Notice Addresses

Address for Notices to Supplier:

State Street Bank and Trust Company

John Hancock Tower

200 Clarendon Street, JHT 3

Boston, MA 02116

Attention: Edward J. McKenzie, Senior Vice President

Telephone: 617-662-4100

Facsimile: 617-662-4195

With a Copy to:

Mary Moran Zeven

Senior Vice President and

Senior Managing Counsel

State Street Bank and Trust Company

Legal Division, LCC 2

2 Avenue de Lafayette

Boston, MA 02111

Telephone: 617-662-1783

Facsimile: 617-662-2702

Address for Notices to the advisor or any Fund:

Columbia Management Investment Advisers, LLC,

formerly known as RiverSource Investments, LLC

100 Federal Street, Boston, MA 02110

ATTN: Joseph F. DiMaria

One Financial Center, Boston, MA 02111

Telephone: 617.585.4125

Email: joseph.dimaria@columbiamanagement.com

With a Copy to:

Ameriprise Financial

— Legal Department

5228 Ameriprise Financial Center, Minneapolis, MN 55474

H27/5228

ATTN: Scott R. Plummer

Telephone: 612.671.9147

Facsimile: 612.671.3767

Address for Invoices:

Columbia Management Investment Advisers, LLC,

formerly known as RiverSource Investments, LLC

—Finance Department

ATTN: Joseph F. DiMaria

One Financial Center, Boston, MA 02111

Telephone: 617.585.4125

Exhibit B

Relationship Managers


Columbia Management Investment Advisers, LLC		Joseph F. DiMaria

State Street Bank and Trust Company		Edward J. McKenzie

Exhibit (h)(9)(i)

AMENDMENT TO ACCOUNTING SERVICES AGREEMENT

THIS AMENDMENT TO ACCOUNTING SERVICES AGREEMENT, dated as of April 30, 2010 (this “ Amendment ”), by and among each of the registered investment companies, or series thereof, listed on Schedule A hereto (the “ Funds ”), Columbia Management Advisors, LLC (“ CMA ”), State Street Bank and Trust Company (the “ Supplier ”) and Columbia Management Investment Advisers, LLC (formerly known as RiverSource Investments, LLC) (“ CMIA ”), amends the Accounting Services Agreement, dated as of December 15, 2006, as amended and supplemented from time to time (the “ Agreement ”), by and among each of the Funds, CMA, and the Supplier. Capitalized terms used herein but not defined herein shall have the meanings given to such terms in the Agreement.

WHEREAS, immediately following the closing of such sale (the “Closing”), CMIA will act as advisor to the Funds;

WHEREAS, CMA seeks Supplier’s consent to assign its rights and obligations under the Agreement to CMIA; and

WHEREAS, the parties hereto desire to amend certain provisions of the Agreement as set forth below to effect the assignment from CMA to CMIA of its rights and obligations under the Agreement.

NOW, THEREFORE, in consideration of the promises and for other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the parties hereto agree as follows:

SECTION 1. ASSIGNMENT .

SECTION 2. AMENDMENT . The Agreement shall be amended as follows:

2.1. References to CMA Changed to CMIA. All references to CMA in the Agreement are replaced with references to CMIA (expected to be known as Columbia Management Investment Advisers, LLC following the Closing).

2.2. Amend Notice Addresses . The notice addresses appearing on page two of the Agreement for Supplier, CMA or any Fund are deleted and replaced in their entirety with the addresses appearing on Exhibit A for Supplier, CMIA or any Fund.

2.3. Relationship Manager . Pursuant to section 2.5 of the Agreement, CMIA and Supplier hereby appoint as Relationship Managers the persons listed on Exhibit B hereto.

2.5. Waiver of Any Notice Requirement . The parties hereby waive any notice that they may have been entitled to under the Agreement due to the amendments described in this Amendment.

SECTION 3. MISCELLANEOUS.

3.3. Successors and Assigns . This Amendment shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns.

3.4. Effectiveness . This Amendment shall take effect upon the Closing, and shall be of no force or effect in the event the Closing does not take place.

(Signature Page Follows)

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their duly authorized officers as of the day and year first above written.


COLUMBIA FUNDS MASTER INVESTMENT TRUST, LLC
COLUMBIA FUNDS SERIES TRUST
COLUMBIA FUNDS SERIES TRUST I
COLUMBIA FUNDS SERIES TRUST II (formerly, Banc of America Funds Trust)
COLUMBIA FUNDS VARIABLE INSURANCE TRUST
COLUMBIA FUNDS VARIABLE INSURANCE TRUST I

By:		/s/ J. Kevin Connaughton
		Name: J. Kevin Connaughton
		Title: President

STATE STREET BANK AND TRUST COMPANY

By:		/s/ Joseph C. Antonellis
		Name: Joseph C. Antonellis
		Title: Vice Chairman

COLUMBIA MANAGEMENT ADVISORS, LLC

By:		/s/ J. Kevin Connaughton
		Name: J. Kevin Connaughton
		Title: Managing Director

COLUMBIA MANAGEMENT INVESTMENT ADVISERS, LLC

By:		/s/ Amy K. Johnson
		Name: Amy K. Johnson
		Title: Chief Administrative Officer

Schedule A

TRUST AND FUND LISTING

As of: May 1, 2010


Fund Name		Trust Name

Schedule A1 (Fund pays expenses)

Columbia Retirement 2005 Portfolio		Columbia Funds Series Trust II
Columbia Retirement 2010 Portfolio		Columbia Funds Series Trust II
Columbia Retirement 2015 Portfolio		Columbia Funds Series Trust II
Columbia Retirement 2020 Portfolio		Columbia Funds Series Trust II
Columbia Retirement 2025 Portfolio		Columbia Funds Series Trust II
Columbia Retirement 2030 Portfolio		Columbia Funds Series Trust II
Columbia Retirement 2035 Portfolio		Columbia Funds Series Trust II
Columbia Retirement 2040 Portfolio		Columbia Funds Series Trust II
Columbia Asset Allocation Fund		Columbia Funds Series Trust I
Columbia Asset Allocation Fund II		Columbia Funds Series Trust
Columbia Asset Allocation Fund, VS		Columbia Funds Variable Insurance Trust
Columbia Balanced Fund		Columbia Funds Series Trust I
Columbia Blended Equity Fund		Columbia Funds Series Trust I
Columbia Bond Fund		Columbia Funds Series Trust I
Columbia California Intermediate Municipal Bond Fund		Columbia Funds Series Trust
Columbia California Tax-Exempt Fund		Columbia Funds Series Trust I
Columbia Connecticut Intermediate Municipal Bond Fund		Columbia Funds Series Trust I
Columbia Connecticut Tax-Exempt Fund		Columbia Funds Series Trust I
Columbia Conservative High Yield Fund		Columbia Funds Series Trust I
Columbia Contrarian Core Fund		Columbia Funds Series Trust I
Columbia Convertible Securities Fund		Columbia Funds Series Trust
Columbia Core Bond Fund		Columbia Funds Series Trust I
Columbia Disciplined Value Fund		Columbia Funds Series Trust I
Columbia Dividend Income Fund		Columbia Funds Series Trust I
Columbia Emerging Markets Fund		Columbia Funds Series Trust I
Columbia Energy and Natural Resources Fund		Columbia Funds Series Trust I
Columbia Federal Securities Fund		Columbia Funds Series Trust I
Columbia Federal Securities Fund, VS		Columbia Funds Variable Insurance Trust
Columbia Georgia Intermediate Municipal Bond Fund		Columbia Funds Series Trust
Columbia Global Value Fund		Columbia Funds Series Trust
Columbia Greater China Fund		Columbia Funds Series Trust I
Columbia High Income Fund		Columbia Funds Series Trust
Columbia High Yield Fund, VS		Columbia Funds Variable Insurance Trust I
Columbia High Yield Municipal Fund		Columbia Funds Series Trust I
Columbia High Yield Opportunity Fund		Columbia Funds Series Trust I
Columbia Income Fund		Columbia Funds Series Trust I


Fund Name		Trust Name

Schedule A1 (Fund pays expenses)

Columbia Intermediate Bond Fund		Columbia Funds Series Trust I
Columbia Intermediate Municipal Bond Fund		Columbia Funds Series Trust I
Columbia International Bond Fund		Columbia Funds Series Trust I
Columbia International Fund, VS		Columbia Funds Variable Insurance Trust
Columbia International Growth Fund		Columbia Funds Series Trust I
Columbia International Stock Fund		Columbia Funds Series Trust I
Columbia International Value Fund		Columbia Funds Series Trust
Columbia Large Cap Core Fund		Columbia Funds Series Trust
Columbia Large Cap Enhanced Core Fund		Columbia Funds Series Trust
Columbia Large Cap Growth Fund		Columbia Funds Series Trust I
Columbia Large Cap Growth Fund, VS		Columbia Funds Variable Insurance Trust
Columbia Large Cap Value Fund		Columbia Funds Series Trust
Columbia Large Cap Value Fund, VS		Columbia Funds Variable Insurance Trust
Columbia Liberty Fund		Columbia Funds Series Trust I
Columbia Marsico 21st Century Fund		Columbia Funds Series Trust
Columbia Marsico 21st Century Fund, VS		Columbia Funds Variable Insurance Trust I
Columbia Marsico Focused Equities Fund		Columbia Funds Series Trust
Columbia Marsico Focused Equities Fund, VS		Columbia Funds Variable Insurance Trust I
Columbia Marsico Global Fund		Columbia Funds Series Trust
Columbia Marsico Growth Fund		Columbia Funds Series Trust
Columbia Marsico Growth Fund, VS		Columbia Funds Variable Insurance Trust I
Columbia Marsico International Opportunities Fund		Columbia Funds Series Trust
Columbia Marsico International Opportunities Fund, VS		Columbia Funds Variable Insurance Trust I
Columbia Marsico International Opportunities Master Portfolio		Columbia Funds Master Investment Trust, LLC
Columbia Mid Cap Growth Fund, VS		Columbia Funds Variable Insurance Trust I
Columbia Maryland Intermediate Municipal Bond Fund		Columbia Funds Series Trust
Columbia Massachusetts Intermediate Municipal Bond Fund		Columbia Funds Series Trust I
Columbia Massachusetts Tax-Exempt Fund		Columbia Funds Series Trust I
Columbia Masters International Equity Portfolio		Columbia Funds Series Trust
Columbia Mid Cap Core Fund		Columbia Funds Series Trust I
Columbia Mid Cap Growth Fund		Columbia Funds Series Trust I
Columbia Mid Cap Index Fund		Columbia Funds Series Trust
Columbia Mid Cap Value Fund		Columbia Funds Series Trust
Columbia Mid Cap Value Fund, VS		Columbia Funds Variable Insurance Trust
Columbia Money Market Fund, VS		Columbia Funds Variable Insurance Trust
Columbia Multi-Advisor International Equity Fund		Columbia Funds Series Trust
Columbia New Jersey Intermediate Municipal Bond Fund		Columbia Funds Series Trust I
Columbia New York Intermediate Municipal Bond Fund		Columbia Funds Series Trust I
Columbia New York Tax-Exempt Fund		Columbia Funds Series Trust I


Fund Name		Trust Name

Schedule A1 (Fund pays expenses)

Columbia North Carolina Intermediate Municipal Bond Fund		Columbia Funds Series Trust
Columbia Oregon Intermediate Municipal Bond Fund		Columbia Funds Series Trust I
Columbia Overseas Value Fund		Columbia Funds Series Trust
Columbia Pacific/Asia Fund		Columbia Funds Series Trust I
Columbia Real Estate Equity Fund		Columbia Funds Series Trust I
Columbia Rhode Island Intermediate Municipal Bond		Columbia Funds Series Trust I
Columbia S&P 500 Index Fund, VS		Columbia Funds Variable Insurance Trust
Columbia Select Large Cap Growth Fund		Columbia Funds Series Trust I
Columbia Select Large Cap Growth Fund, VS		Columbia Funds Variable Insurance Trust
Columbia Select Opportunities Fund		Columbia Funds Series Trust I
Columbia Select Small Cap Fund		Columbia Funds Series Trust I
Columbia Short-Intermediate Bond Fund		Columbia Funds Series Trust I
Columbia Short-Term Bond Fund		Columbia Funds Series Trust
Columbia Short-Term Municipal Bond Fund		Columbia Funds Series Trust
Columbia Small Cap Core Fund		Columbia Funds Series Trust I
Columbia Small Cap Growth Fund I		Columbia Funds Series Trust I
Columbia Small Cap Growth Fund II		Columbia Funds Series Trust
Columbia Small Cap Value Fund I		Columbia Funds Series Trust I
Columbia Small Cap Value Fund II		Columbia Funds Series Trust
Columbia Small Cap Value Fund, VS		Columbia Funds Variable Insurance Trust
Columbia Small Company Growth Fund, VS		Columbia Funds Variable Insurance Trust
Columbia South Carolina Intermediate Municipal Bond Fund		Columbia Funds Series Trust
Columbia Strategic Income Fund		Columbia Funds Series Trust I
Columbia Strategic Income Fund, VS		Columbia Funds Variable Insurance Trust
Columbia Strategic Investor Fund		Columbia Funds Series Trust I
Columbia Tax-Exempt Fund		Columbia Funds Series Trust I
Columbia Technology Fund		Columbia Funds Series Trust I
Columbia Total Return Bond Fund		Columbia Funds Series Trust
Columbia Value and Restructuring Fund		Columbia Funds Series Trust I
Columbia Value and Restructuring Fund, VS		Columbia Funds Variable Insurance Trust
Columbia Virginia Intermediate Municipal Bond Fund		Columbia Funds Series Trust
Columbia World Equity Fund		Columbia Funds Series Trust I
Columbia LifeGoal Income Portfolio		Columbia Funds Series Trust
Corporate Bond Portfolio		Columbia Funds Series Trust
Mortgage and Asset Backed Portfolio		Columbia Funds Series Trust
Columbia Large Cap Index Fund		Columbia Funds Series Trust
Columbia LifeGoal Balanced Growth Portfolio		Columbia Funds Series Trust
Columbia LifeGoal Growth Portfolio		Columbia Funds Series Trust
Columbia LifeGoal Income and Growth Portfolio		Columbia Funds Series Trust
Columbia Small Cap Index Fund		Columbia Funds Series Trust
Columbia U.S. Treasury Index Fund		Columbia Funds Series Trust I

Schedule A2 (Unified Fee Funds)

CMG Ultra Short Term Bond Fund		Columbia Funds Series Trust I

Exhibit A

Notice Addresses

Address for Notices to Supplier:

State Street Bank and Trust Company

John Hancock Tower

200 Clarendon Street, JHT 3

Boston, MA 02116

Attention: Edward J. McKenzie, Senior Vice President

Telephone: 617-662-4100

Facsimile: 617-662-4195

With a Copy to:

Mary Moran Zeven

Senior Vice President and

Senior Managing Counsel

State Street Bank and Trust Company

Legal Division, LCC 2

2 Avenue de Lafayette

Boston, MA 02111

Telephone: 617-662-1783

Facsimile: 617-662-2702

Address for Notices to the advisor or any Fund:

Columbia Management Investment Advisers, LLC,

formerly known as RiverSource Investments, LLC

100 Federal Street, Boston, MA 02110

ATTN: Joseph F. DiMaria

One Financial Center, Boston, MA 02111

Telephone: 617.585.4125

Email: joseph.dimaria@columbiamanagement.com

With a Copy to:

Ameriprise Financial

— Legal Department

5228 Ameriprise Financial Center, Minneapolis, MN 55474

H27/5228

ATTN: Scott R. Plummer

Telephone: 612.671.9147

Facsimile: 612.671.3767

Address for Invoices:

Columbia Management Investment Advisers, LLC,

formerly known as RiverSource Investments, LLC

—Finance Department

ATTN: Joseph F. DiMaria

One Financial Center, Boston, MA 02111

Telephone: 617.585.4125

Exhibit B

Relationship Managers


Columbia Management Investment Advisers, LLC		Joseph F. DiMaria

State Street Bank and Trust Company		Edward J. McKenzie

Exhibit (m)(4)

SHAREHOLDER SERVICING PLAN IMPLEMENTATION AGREEMENT

Ladies and Gentlemen:

We wish to enter into this Shareholder Servicing Plan Implementation Agreement (“Agreement”) with you concerning the provision of services as set forth herein. The terms and conditions of this Agreement are as follows:

1.	Provision of Services

(a)

You will from time to time enter into agreements with banks, broker/dealers and other financial institutions (collectively “Intermediaries”) pursuant to which the Intermediaries will agree to provide personal services to, and maintain accounts of, their clients (“Customers”) who may from time to time beneficially own shares of one or more of the portfolios (collectively, the “Funds”) of the undersigned trust(s) that have a Board approved shareholder servicing plan. The shares of the Funds are collectively referred to herein as “Shares.”

(b)

You will provide such office space and equipment, facilities and personnel (which may be any part of the space, equipment and facilities currently used in your business, or any personnel employed by you) as may be reasonably necessary or beneficial in order to provide the services contemplated hereby.

(c)

You will pay to the Intermediaries, out of the Servicing Fee (as defined below), such amounts as may be agreed between you and the Intermediaries in return for the provision by the Intermediaries of personal services and/or the maintenance of shareholder accounts as described in Section 1(a).

(d)

For all purposes of this Agreement you will be deemed to be an independent contractor, and will have no authority to act as agent for us in any other capacity, except as expressly provided herein.

2.	Compensation

(a)

In consideration of the services provided by you hereunder, we will pay to you a fee as set forth in Schedule I (the “Servicing Fee”). The Servicing Fee may be prospectively increased or decreased by us, in our sole discretion, at any time upon notice to you.

(b)

Compensation payable under this Agreement is subject to, among other things, the Financial Industry Regulatory Authority, Inc. (“FINRA”) conduct rules governing receipt by FINRA members of service fees from registered investment companies (the “FINRA Service Fee Rule”). Such compensation shall only be paid if permissible under the FINRA Service Fee Rule and shall not be payable for services that are deemed to be distribution-related services, or to the extent otherwise prohibited by the FINRA Service Fee Rule.

- 1 -

Reports

You agree to furnish us with such information as we may reasonably request, and will otherwise cooperate with us and our designees (including, without limitation, any auditors or legal counsel designated by us) in connection with the preparation of reports to our Board of Trustees concerning this Agreement and the monies paid or payable by us pursuant hereto, as well as any other reports or filings that may be required by law. You agree to provide us with such certifications, reports and other information as we may reasonably request from time to time to assist us in complying with, and monitoring for compliance with, such laws, rules and regulations.

Term

(a)

This Agreement shall become effective as of the closing of the sale of the long-term asset management business of Columbia Management Group, LLC, including that portion of Columbia Management Advisors, LLC’s business that relates to the management of the Trust and each of its series, to Ameriprise Financial, Inc. (the “Closing”), and, unless sooner terminated as provided herein, shall continue in effect from year to year with respect to a Fund, provided such continuance is specifically approved at least annually by (i) our Board of Trustees, or (ii) a vote of a majority (as defined in the Investment Company Act of 1940, as amended (“1940 Act”)) of the outstanding voting securities of the Fund, provided that in either event the continuance is also approved by the majority of our Trustees who are not parties to this Agreement or interested persons (as defined in the 1940 Act) of any such party, by vote cast in person at a meeting called for the purpose of voting on such approval.

(b)

This Agreement is terminable with respect to a Fund, without penalty, on not less than sixty (60) days’ written notice, by our Board of Trustees, by vote of a majority (as defined in the 1940 Act) of the outstanding voting securities of such Fund, or by you. This Agreement will also terminate automatically in the event of its assignment (as defined in the 1940 Act). Upon termination, the obligations of the parties under this Agreement shall cease except for unfulfilled obligations and liabilities arising prior to termination.

5.	Communications

You will send any notice to us by first class mail, postage prepaid, or by confirmed telefacsimile at: One Financial Center, Boston, Massachusetts, 02111, fax number 617-345-0919, Attention: Secretary. We will send any notice to you by first class mail, postage prepaid, or by confirmed telefacsimile to you at: c/o Columbia Management Investment Distributors, Inc. (formerly known as RiverSource Fund Distributors, Inc.), One Financial Center, Boston, MA 02111, fax number 617-737-0641, Attn: President, or such other address or telefacsimile number as we may reasonably believe appropriate. A party that changes its address or telefacsimile number shall promptly notify the other party.

6.	Governing Law

This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts without giving effect to conflict of laws principles. This Agreement may not be assigned by either party.

- 2 -

7.	Actions by the Trust and its Trustees

A reference to each Trust and the Trustees of each Fund refer respectively to the Trust created by the Declaration of Trust and the Trustees as Trustees but not individually or personally. A copy of the document establishing each applicable Trust under Massachusetts law is filed with the Secretary of the Commonwealth of Massachusetts. All parties hereto acknowledge and agree that any and all liabilities of the Trust arising, directly or indirectly, under this Agreement will be satisfied solely out of the assets of the Trust and that no Trustee, officer or shareholder shall be personally liable for any such liabilities. All persons dealing with any Trust, must look solely to the property belonging to such Trust for the enforcement of any claims against the Trust.

8.	Miscellaneous

We may amend this Agreement upon written notice to you. You will be deemed to have accepted such amendment by providing the services contemplated in this Agreement after receipt of such notice. You and we also may amend this Agreement by means of a written amendment signed by both parties.

This Agreement shall cancel and supersede any and all prior servicing agreements or similar agreements or contracts relating to the provision of similar services between you and the Funds.

This Agreement may be executed in any number of counterparts, each of which shall be deemed an original for all purposes and all of which, taken together, shall constitute one and the same instrument.

[The remainder of this page intentionally left blank.]

- 3 -

If you agree to be legally bound by the provisions of this Agreement, please sign a copy of this letter where indicated below and promptly return it to us, at the following address: One Financial Center, Boston, MA 02110, Attention: Secretary.


Very truly yours,

COLUMBIA FUNDS SERIES TRUST
COLUMBIA FUNDS SERIES TRUST I
COLUMBIA FUNDS SERIES TRUST II (formerly, Banc of America Funds Trust) on behalf of its respective Funds

By:		/s/ Joseph F. DiMaria
		Name: Joseph F. DiMaria
		Title: Chief Accounting Officer

Accepted and Agreed to:

COLUMBIA MANAGEMENT INVESTMENT DISTRIBUTORS, INC.

By:		/s/ William F. Truscott
		Name: William F. Truscott
		Title: Chairman

Shareholder Servicing Plan

SCHEDULE I

COMPENSATION

Classes A, ¹ B, C, E, F and J Shares, Daily Class Shares, Liquidity Class Shares, Investor Class Shares, Adviser Class Shares and Marsico Shares of a Columbia Fund except as otherwise specifically identified below:

The Servicing Fee shall be, with respect to each applicable Fund, an annual rate not to exceed 0.25% of the average daily net asset value of all Shares of such Fund class, other than shares with respect to which the Fund is paying a shareholder servicing fee directly to a third party. The Servicing Fee shall be accrued daily and paid monthly in arrears.

Classes A, B and C of Columbia Tax-Exempt Fund, Columbia Intermediate Municipal Bond Fund and Columbia High Yield Municipal Fund:

The Servicing Fee shall be, with respect to each applicable Fund, an annual rate not to exceed 0.20% of the average daily net asset value of all Shares of such Fund class, other than shares with respect to which the Fund is paying a shareholder servicing fee directly to a third party. The Servicing Fee shall be accrued daily and paid monthly in arrears.

Classes A and B of Columbia Liberty Fund:

The Servicing Fee shall be an annual rate not to exceed 0.15% of the average daily net asset value attributable to shares issued prior to April 1, 1989, and an annual rate not to exceed 0.25% of the average daily net asset value attributable to shares issued thereafter, other than shares with respect to which the Fund is paying a shareholder servicing fee directly to a third party. The Servicing Fee shall be accrued daily and paid monthly in arrears.

For Class A shares of Columbia Asset Allocation Fund, Columbia Balanced Fund, Columbia Conservative High Yield Fund, Columbia Contrarian Core Fund, Columbia Disciplined Value Fund, Columbia Dividend Income Fund, Columbia Large Cap Growth Fund, Columbia Mid Cap Growth Fund, Columbia Oregon Intermediate Municipal Bond Fund, Columbia Real Estate Equity Fund, Columbia Small Cap Core Fund, Columbia Small Cap Growth Fund I and Columbia Technology Fund, each a series of Columbia Funds Series Trust I, the Board of Trustees of Columbia Funds Series Trust I limits total payments for distribution and service fees for each applicable Fund to 0.25% of such Fund’s average daily net assets attributable to Class A shares, and therefore any amounts payable by Class A shares of such Fund pursuant to Columbia Funds Series Trust I’s Distribution Plan shall directly reduce the maximum allowable rate of the Servicing Fee. For example, payment of a 0.10% distribution fee would reduce the maximum allowable rate of the Servicing Fee to 0.15%.

Classes A and B of Columbia California Tax-Exempt Fund, Columbia Connecticut Tax-Exempt Fund, Columbia Massachusetts Tax-Exempt Fund and Columbia New York Tax-Exempt Fund:

The Servicing Fee shall be an annual rate not to exceed 0.10% of the average daily net asset value attributable to shares issued prior to December 1, 1994, and an annual rate not to exceed 0.25% of the average daily net asset value attributable to shares issued thereafter, other than shares with respect to which the Fund is paying a shareholder servicing fee directly to a third party. The Servicing Fee shall be accrued daily and paid monthly in arrears.

Classes A and B of Columbia Strategic Income Fund:

The Servicing Fee shall be an annual rate not to exceed 0.15% of the average daily net asset value attributable to shares issued prior to January 1, 1993, and an annual rate not to exceed 0.25% of the average daily net asset value attributable to shares issued thereafter, other than shares with respect to which the Fund is paying a shareholder servicing fee directly to a third party. The Servicing Fee shall be accrued daily and paid monthly in arrears.

Class A shares of the non-money market funds of Columbia Funds Series Trust each have a combined shareholder servicing and distribution plan pursuant to which the aggregate annual fee rate listed above represents total compensation for services rendered in connection with (i) the sale of such shares; (ii) the personal services and/or the maintenance of shareholder accounts holding such shares; or (iii) any combination thereof.

Exhibit (p)(4)

MACKAY SHIELDS LLC

CODE OF ETHICS

All recipients of the Code should read it carefully, retain it for future reference and abide by its requirements. Should you have a question as to your status under the Code, contact the Legal/Compliance Department immediately.

Amended and Restated November 4, 2009

Table of Contents


Statement of General Fiduciary Principles
General Statement		4
Principles and Standards of Business Conduct		4
Conflicts of Interest		5
Outside Corporate Board Membership		5
“Other” Outside Activities		6
Outside Activities Relating to the Company		6
Conflicts of Interest Questionnaire		6
Gifts and Entertainment		6
Insider Trading; Information Barrier		7
Confidentiality of Client Information		7
Excessive Trading		7
Standards of Conduct for Chartered Financial Analysts		8

Definitions
Access Person		8
Affiliate		8
Affiliated Fund		8
Automatic Investment Plan		8
Beneficial Ownership		8
Cashless Exercise		9
Chief Compliance Officer		9
Client		9
Code		9
Covered Security		9
Discretionary Managed Account		9
Dividend Reinvestment Plan		9
Employee		9
Employee Stock Option Plan		10
Employee Stock Purchase Plan (or ESPP)		10
Employment Date		10
Excepted Securities		10
Exchange Traded Fund (or ETF)		10
Federal Securities Laws		10
529 Plans		10
Front Running		10
Immediate Family		10
Initial Public Offering		11
Insider Trading		11
Investment Company Act		11
Investment Club		11
Legal/Compliance		11
Pending Buy or Sell Order		11


Private Placement		11
Registered Principal or Registered Representative		11
Related Policies		11
Restricted List		11
Scalping		11
Supervised Person		11
Watch List		12

Personal Investment Activities – Restrictions and Monitoring Procedures
Preclearance of Trades		12
Exceptions to Trade Preclearance Requirements		12
Restricted and Watch Lists		13
Front Running and Scalping		13
Maximum Trades and Trade Requests per Quarter		13
Trading/Black-Out Periods		13
Considerations and Exceptions to Trading/Black-Out Period		14
Use of Brokerage for Personal or Family Benefit		14
Initial Public Offerings		15
Private Placements		15
Short-Term Trading/Sixty Day Holding Period		15
Other Exceptions		15
Affiliated Fund Shares		16
Preclearance of Accounts		16

Recordkeeping and Reporting
Privacy Statement		17
Initial Holdings and Account Reports		17
Quarterly Transactions and Account Reports		18
Annual Reporting		18
Electronic Reporting and Certifications		18
Duplicate Confirmations		19
Reporting of Code Violations		19
Recordkeeping		19

Administration
Mutual Fund Code of Ethics		19
Sanctions		20
Monitoring and Review		20
Acknowledgement and Training		21
Exceptions		21

Exhibits

1.	Statement of General Fiduciary Principles and Standards of Business Conduct

1.1

General Statement

This Code of Ethics has been issued by MacKay Shields LLC (“MacKay” or the “Company”) in order to set forth guidelines and procedures that promote ethical practices and conduct by all Employees. It is also intended to ensure that all Employees comply with Federal Securities Laws. The Code provides each Employee with specific guidance concerning personal security investments and the responsibilities associated with that activity.

MacKay requires that all Employees observe the applicable standards of duty and care set forth herein. An Employee may not evade the provisions of the Code by acting through another person, including a friend, relative or other, to act in a manner that is prohibited.

MacKay believes that mutual funds, including those we manage provide a broad range of investment options to meet employee investment needs. We encourage Employees to use these vehicles for their personal investments. We do not encourage active trading by our employees. We recognize, however, that individual needs differ and that there are other attractive investment opportunities. As a result, this Code is intended to give you and your family flexibility to invest, without jeopardizing relationships with our Clients.

MacKay is entrusted with the assets of our Clients for investment purposes. This fiduciary relationship requires our personnel to place the interests of our Clients before their own and to avoid even the appearance of a conflict of interest. Persons subject to this Code must adhere to this general overriding principle as well as comply with the Code’s specific provisions. This is how we earn and keep our Clients’ trust.

As a fundamental requirement, MacKay demands the highest standards of ethical conduct on the part of all its Employees. All Employees must abide by this basic standard and never take inappropriate advantage of their position with the Company.

1.2

Principles and Standards of Business Conduct

The following general fiduciary standards and standards of business conduct shall govern personal investment activities and the interpretation and administration of this Code:

•

The interests of Clients must be placed first at all times;

•

All personal securities transactions must be conducted consistent with this Code and in such a manner as to avoid any actual or potential conflict of interest or any abuse of an individual’s position of trust and responsibility;

•

Employees should not take inappropriate advantage of their positions; and

•

Employees must comply with applicable Federal Securities Laws.

It shall be a violation of this Code and its procedures, for any Employee of the Company, in connection with the purchase or sale, directly or indirectly, of any security or other investment held or to be acquired by any client including a registered investment company or other entity (collectively a “Client”):

•

to employ any device, scheme or artifice to defraud any Client;

•

to make to the Client any untrue statement of a material fact, or to omit to state to the Client a material fact necessary in order to make the statements made, in light of the circumstances under which they are made, not misleading;

•

to engage in any act, practice or course of business that operates or would operate as a fraud or deceit upon the Client; or

•

to engage in any manipulative practice with respect to the Client.

It shall also be a violation of this Code and its procedures, for any Employee of the Company to engage in any manipulative practice with respect to securities or any other investments, including, without limitation, price manipulation and the spreading, misuse or malicious use of false rumors.

This Code does not attempt to identify all possible conflicts of interest, and literal compliance with each of its specific provisions will not shield Employees from liability for personal trading or other conduct that violates a fiduciary duty to Clients.

1.3

Conflicts of Interest

As part of this ongoing responsibility, each Employee has the duty to disclose to MacKay any interest that he or she may have in any firm, corporation or business entity that is not affiliated or participating in any joint venture or partnership with MacKay or its Affiliates and that does business with MacKay or that otherwise presents a possible conflict of interest as described herein. Disclosure should be timely so that MacKay may take action concerning any possible conflict, as it deems appropriate. It is recognized, however, that MacKay has or may have business relationships with many organizations and that a relatively small interest in securities of an organization does not necessarily give rise to a prohibited conflict of interest.

1.4

Outside Corporate Board Membership

Except as described in Section 1.6 hereof, it is considered generally incompatible with the duties of an Employee of MacKay for that Employee to assume the position of director of a corporation not affiliated with the Company. A request should be made by an Employee to the CCO and the Employee’s supervisor if the Employee seeks to accept any invitation to serve as a director of a corporation that is not an Affiliate and the person must receive the approval of his or her supervisor and the CCO, General Counsel or Deputy General Counsel prior to accepting any such directorship. For Employees that are Registered Representatives, approval by MacKay’s designated Registered Principal and notification of NYLIFE Distributors LLC is also required. In the event that approval is given, the CCO shall immediately determine whether the corporation in question is to be placed on the Company’s Restricted List.

1.5

“Other” Outside Activities

Except as described in Section 1.6 herein, it is considered generally incompatible with the duties of an Employee of MacKay to act as an officer, director, general partner, consultant, agent, representative or employee of any other business or entity (including, without limitation, a non-profit, educational or religious institution), other than an Affiliate. A request should be made by an Employee to the CCO and the Employee’s supervisor if the Employee seeks to accept any invitation to serve as an officer, director, general partner, consultant, agent, representative or employee of any business or entity that is not an Affiliate and the person must receive the approval of his or her supervisor and the CCO, General Counsel or Deputy General Counsel prior to accepting any such position. For Employees that are Registered Representatives, approval by MacKay’s designated Registered Principal and notification of NYLIFE Distributors LLC is also required. In the event that approval is given, the CCO shall immediately determine whether the business in question is to be placed on the Company’s Restricted List.

1.6

Outside Activities Relating to the Company

Employees who, in the regular course of their duties relating to the Company’s investment activities, are asked to serve as the director, officer, general partner, consultant, agent, representative or employee of a company may do so with the prior written approval of their department head and the CCO. Recognizing that such positions with public companies may interfere with the Company’s advisory activities, it is not expected that such positions will be assumed absent unusual circumstances that will benefit Clients. In the event that such unusual circumstances are present, the department head and the CCO shall collectively decide whether the assumption of the position is in the best interest of the Company’s clients.

1.7

Conflicts of Interest Questionnaire

Initially and annually thereafter, a Questionnaire in substantially the form attached as Exhibit A hereto, shall be distributed to each Employee for completion and filing with the CCO or his or her designee. Each Employee shall promptly supplement the annual questionnaire as necessary to reflect any material changes between annual filings. In addition, on a quarterly basis, each employee shall file with the CCO or his or her designee the names and affiliations of Immediate Family members who either reside with, or are financially dependent upon, or whose investments are controlled by, the Employee, who are employed in the securities or commodities industries and who might be in a position to benefit directly or indirectly from the activities of MacKay personnel in the discharge of their duties. Such report shall be in the form of Exhibit B .

1.8

Gifts and Entertainment

Employees are subject to the MacKay Shields LLC Gift and Entertainment Policy and should refer to that Policy for guidance with respect to the limits on giving and receiving gifts or entertainment to or from third parties that do business with MacKay, its Affiliates, or its Clients. Pursuant to the Gift & Entertainment Policy, employees may not engage in gift or entertainment activity that would be impermissible under the U.S. Foreign Corrupt Practices Act or any commercial bribery statutes or laws. Employees who are Registered Representatives are also subject to limitations on giving or receiving gifts that are imposed by the Rules of Conduct of the Financial Industry Regulatory Authority (FINRA). Employees are required to make current and quarterly reports under this Policy and annually, as part of their Code of Ethics certification, must acknowledge that they have read this Policy and have complied with its terms.

1.9

Insider Trading; Information Barrier

Employees may not trade on inside information (i.e., material non-public information ¹ ) or communicate such information to others. An Employee who believes that he or she is in possession of inside information should contact the General Counsel or CCO immediately. In addition, employees are required to observe the restrictions on the communication of investment-related information within the New York Life enterprise. Please refer to the MacKay Shields LLC Insider Trading Policy and Procedures, the MacKay Shields LLC Information Barrier Policy and Procedures and MacKay’s Restricted List Policy and Watch List Policies and Procedures for specific guidelines governing inside information and information barriers. Annually, as part of their Code of Ethics certification, all Employees must acknowledge that they have read these Policies and have complied with their terms.

1.10

Confidentiality of Client Information

MacKay has developed an Information Security and Privacy Policy, which is designed to: (1) ensure the security and confidentiality of Client records and information; (2) protect against any anticipated threats or hazards to the security or integrity of Client records and information; and (3) protect against unauthorized access to or use of Client records or information that could result in substantial harm or inconvenience to any Client.

It is MacKay’s policy to protect the confidentiality of holdings of mutual funds for which the Company serves as investment adviser or sub-advisor and to prevent the selective disclosure of non-public information concerning such mutual funds. All portfolio information regarding such mutual funds is subject to the Policy on Selective Disclosure of Mutual Fund Portfolio Holdings. Annually, as part of their Code of Ethics certification, all Employees must acknowledge that they have read this Policy and have complied with its terms. Please refer to the Policy for specific guidelines governing portfolio holdings information.

1.11

Excessive Trading

Employees are prohibited from short-term trading or excessive trading of Affiliated Funds, other than those that permit such trading, and must comply with any trading restrictions established by the Company to prevent market timing of these funds. Please refer to Section 3.13 for specific guidelines governing Affiliated Funds.

Material information generally is that which a reasonable investor would consider significant in making an investment decision. Nonpublic information is any information which has not been disclosed to the general public. Information is considered public when it is widely disseminated; e.g., disclosure in the news media or company filings.

1.12

Standards of Conduct for Chartered Financial Analysts

In addition to this Code, MacKay requires that its Employees who are chartered financial analysts comply with the provisions of the CFA Institute’s Code of Ethics and Standards of Professional Conduct applicable to chartered financial analysts.

2.	Definitions

“Access Person” - has the same meaning as set forth in Rule 17j-1 under the Investment Company Act and as set forth in Rule 204A-1 of the Investment Advisers Act of 1940 and shall include any Supervised Person of MacKay who has access to non-public information regarding any Clients’ purchase or sale of securities, or information regarding the portfolio holdings of any Affiliated Fund, or who is involved in making securities recommendations to Clients, or who has access to such recommendations that are non-public.

“Affiliate” - any person directly or indirectly controlling, controlled by or under common control with such other group.

“Affiliated Fund” - (i) any registered investment company and series of such company or portion thereof for which MacKay is the investment manager, investment adviser or sub-advisor; or (ii) any registered investment company whose investment adviser or principal underwriter controls MacKay, is controlled by MacKay or is under common control with MacKay. For purposes of this definition, “control” has the same meaning as it does in Section 2(a)(9) of the Investment Company Act.

“Automatic Investment Plan” - a program in which regular periodic purchases (or withdrawals) are made automatically in (or from) investment accounts in accordance with a predetermined schedule and allocation. An automatic investment plan includes dividend reinvestment plans (“DRIPs”) and Employee Stock Purchase Plans (“ESPPs”), but does not include a 401k plan.

“Beneficial Ownership” - shall be interpreted in the same manner as it would be under Rule 16a-1(a)(2) under the Securities Exchange Act of 1934 in determining whether a person is the beneficial owner of a security for purposes of the Securities Exchange Act of 1934 and the rules and regulations thereunder. A beneficial owner is any person who, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has or shares a direct or indirect pecuniary interest in the securities. A pecuniary interest in securities means the opportunity, directly or indirectly, to profit or share in any profit derived from a transaction in those securities. A person is presumed to have an indirect pecuniary interest in securities held by members of a person’s Immediate Family who either reside with, or are financially dependent upon, or whose investments are controlled by, that person. A person also has a beneficial interest in securities held: (i) by a trust in which he or she is a Trustee, has a Beneficial Interest or is the settlor with a power to revoke; (ii) by another person and he or she has a contract or an understanding with such person that the securities held in that person’s name are for his or her benefit; (iii) in the form of a right to acquisition of such security through the exercise of warrants, options, rights, or conversion rights; (iv) by a partnership of which he or she is a member; (v) by a corporation that he or she uses as a personal trading medium; (vi) by a holding company that he or she controls; or (vii) by an Investment Club of which he or she is a member.

“Cashless Exercise” - transactions executed when exercising employee stock options. Essentially, the money is borrowed to exercise the option to purchase shares, the option is exercised and simultaneously the shares are sold to pay for the purchase, taxes, and broker commissions.

“Chief Compliance Officer” or “CCO” - the Company’s Chief Compliance Officer.

“Client” - any client of the Company, including a registered investment company (mutual fund) or other person or entity.

“Code” - this Code of Ethics.

“Covered Security” - any note, stock, treasury stock, security future, bond, municipal bond (including municipal auction rate securities (“ARS”) with short-term (e.g., 7 day) coupon resets and closed-end municipal auction rate “Preferred” shares), debenture, evidence of indebtedness, certificate of interest or participation on any profit-sharing agreement, collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas, or other mineral rights, any put, call, straddle, option, or privilege on any security (including a certificate of deposit) or on any group or index of securities (including any interest therein or based on the value thereof), or any put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency, or, in general, any interest or instrument commonly known as a “security”, or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing.

For these purposes, the purchase or sale of a Covered Security includes, among other things, the writing of an option to purchase or sell a Covered Security. A security held or to be acquired includes any option to purchase or sell, and any security convertible into or exchangeable for, a Covered Security.

“Discretionary Managed Account” - an account managed on a discretionary basis by a person other than such Employee over which an Employee certifies that he or she has no direct or indirect influence or control over the selection or disposition of securities and no prior knowledge of transactions therein; provided, however, that direct or indirect influence or control of such account is held by a person or entity not associated with MacKay or an Affiliate and not a relative of such Employee.

“Dividend Reinvestment Plan (or DRIP)” - a stock purchase plan offered by a corporation whereby shareholders purchase stock directly from the company (usually through a transfer agent) and are allowed to reinvest their cash dividends by purchasing additional shares or fractional shares.

“Employee” - any person employed by MacKay. Temporary employees and outside consultants who in connection with their regular functions or duties obtain information regarding the purchase or sale of securities in portfolios managed by MacKay may be subject to this Code, as determined by Legal/Compliance.

“Employee Stock Option Plan” - contracts between a company and its employees that give employees the right to buy a specific number of the company’s shares at a fixed price within a certain period of time.

“Employee Stock Purchase Plan (or ESPP)” - an organized plan for employees to buy shares of their company’s stock.

“Employment Date” - the date on which the Employee commenced working for the Company.

“Excepted Securities” - securities not covered by this Code include the following:

•

direct obligations of the U.S. Government;

•

bankers’ acceptances;

•

bank certificates of deposit;

•

commercial paper;

•

high quality short-term debt instruments, including repurchase agreements;

•

shares issued by open-end mutual funds that are not Affiliated Funds; and

•

interests in 529 Plans.

“Exchange Traded Fund (or ETF)” - represents shares of ownership in either fund, unit investment trust, or depository receipts that hold portfolios of common stocks that are included in a selected index, either broad market, sector or international. ETFs trade throughout the day on an exchange.

“Federal Securities Laws” - the Securities Act of 1933, the Securities Exchange Act of 1934, the Sarbanes-Oxley Act of 2002, the Investment Company Act of 1940, the Investment Advisers Act of 1940, Title V of the Gramm-Leach-Bliley Act, any rules adopted by the Securities and Exchange Commission (“SEC”) under any of these statutes, the Bank Secrecy Act as it applies to funds and investment advisers, and any rules adopted thereunder by the SEC or the Department of the Treasury.

“529 Plans” - qualified state college tuition programs.

“Front Running” - the buying or selling of a security by a person, with the intent of taking advantage of the market impact of a Client’s transaction in the underlying security by or on behalf of the Client.

“Immediate Family” - any of the following relatives sharing the same household as the Employee: child, stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, sister-in-law, including adoptive relationships. The term also includes any related or unrelated individual who resides with, or is financially dependent upon, or whose investments are controlled by, or whose financial support is materially contributed to by, the Employee, including “significant others.”

“Initial Public Offering” - an offering of securities registered under the Securities Act of 1933, the issuer of which immediately before registration was not subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934.

“Insider Trading” - the purchase or sale of securities of a company while in possession of material, non-public information or communicating such information to others.

“Investment Company Act” - the Investment Company Act of 1940, as amended.

“Investment Club” - a group of two or more people, each of whom contributes monies to an investment pool and participates in the investment making decision process and shares in the investment returns.

“Legal/Compliance” - MacKay’s Legal/Compliance Department

“Pending Buy or Sell Order” - both an order placed with a broker to buy or sell a security for a Client account and an internal decision by an Employee to buy or sell a security for his or her personal account over which he or she has a Beneficial Interest.

“Private Placement” - an offering that is exempt from registration under the Securities Act of 1933, as amended, under Sections 4(2) or 4(6), or Rules 504, 505 or 506 thereunder.

“Registered Principal or Registered Representative” - an Employee who is registered as such with a member firm of the Financial Industry Regulatory Authority, or FINRA.

“Related Policies” - Such policies as Legal/Compliance from time to time determines are related to the conduct standards of this Code, including but not limited to the following MacKay policies: Insider Trading Policy and Procedures; Information Barrier Policy and Procedures; Restricted List; Watch List; Gifts and Entertainment; Policy on Anti-Corruption in International Business Transactions; Employee Personal Political Contributions and Activities Policy and Procedures; Information Security and Privacy Policy; Policy on Selective Disclosure of Mutual Fund Portfolio Holdings; and CFA Code of Ethics and Standards of Professional Conduct (with respect to Employees who are Chartered Financial Analysts).

“Restricted List” - a listing of securities maintained by Legal/Compliance in which trading by Employees is generally prohibited.

“Scalping” - buying and selling a security on the same day as a Client and includes, among other transactions, the buying of a security when a Client is selling that security, or selling a security when a Client is buying that security, with the intention of taking advantage of the market impact of the Client’s trades.

“Supervised Person” - any officer, director (or other person occupying a similar status or performing similar functions) and Employee, as well as any other persons who provide advice on behalf of MacKay and are subject to MacKay’s supervision and control; provided that any member of MacKay’s Board of Managers who is an employee of New York Life Insurance Company or New York Life Investment Management LLC shall not be considered a Supervised Person, as these individuals are subject to the requirements of their respective business entity’s Code of Ethics.

“Watch List” - a listing of securities maintained by Legal/Compliance in which trading by Employees is generally prohibited.

3.	Personal Investing Activities - Restrictions and Monitoring Procedures

3.1

Preclearance of Trades

3.1.1

Generally

Preclearance of personal securities transactions allows MacKay to prevent certain trades that may conflict with Client trading activities. To help prevent Front Running, Scalping, and other trading abuses and actual or potential conflicts of interest, no Employee of MacKay (or account in which an Employee has any direct or indirect Beneficial Ownership interest) may purchase or sell, directly or indirectly, Covered Securities without prior approval of Legal/Compliance (except pursuant to the exceptions in Section 3.2 below).

3.1.2

Requests for Preclearance of Trades

Each Employee shall submit a trade request between the hours of 8:00 and 11:00 AM using MacKay’s automated personal trading system (http://mscch/itrade/itrade.asp) before placing an order for any transaction in Covered Securities in any account in which the Employee has Beneficial Ownership. The system allows Legal/Compliance to efficiently monitor personal trading activities and will be periodically tested. The trade request shall be in substantially the form of Exhibit C . Upon submitting a trade request through the automated personal trading system, employees will receive immediate notification whether the trade request was approved or denied by Legal/Compliance.

Any approval received is effective, unless revoked, only for the Day that the request was submitted and ultimately approved; provided, however, that in the case of foreign securities, the authorization is effective, unless revoked, for a period of twenty-four (24) hours. If the transaction is not executed on that same Day (or within such twenty-four (24) hour period), a new request must be filed and another authorization must be obtained.

3.2

Exceptions to Trade Preclearance Requirements

3.2.1

Preclearance is not required with respect to any of the following transactions:

•

in Discretionary Managed Accounts;

•

by employees of the New York Life Insurance Company or New York Life Investment Management LLC who are members of the Board of Managers of MacKay who do not have access to information about MacKay’s purchases and sales of securities;

•

that are non-volitional in nature: e.g. stock splits, stock dividends, exchanges and conversions, mandatory tenders, pro rata distributions to all holders of a class of securities, gifts, inheritances, and margin/maintenance calls (where the securities to be sold are not directed by the covered person);

•

automatic purchases under DRIPs, ESPPs or similar accounts;

•

transactions in ETFs representing shares of a market index and which consists of a minimum of 30 securities, commodity, currency and treasury ETF’s;

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in securities that are Excepted Securities;

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in shares of Affiliated Funds; or

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in government-sponsored enterprises fixed income securities (FNMA, FHLMC).

3.2.2

In addition, authorization given for initial and subsequent purchases or sales of DRIPS or ESPP will not be subject to the one day authorization provision since transactions in these programs usually take place on a periodic pre-determined basis.

3.3

Restricted and Watch Lists

No Employee may acquire or dispose of any direct or indirect Beneficial Ownership in securities of an issuer listed on the Company’s Restricted List. Although transactions in securities of an issuer listed on the Restricted List are generally prohibited, case-by-case exceptions may be granted by the General Counsel or CCO. Securities on the Watch List are dealt with on a case-by-case basis by the General Counsel or CCO.

3.4

Front Running and Scalping

Notwithstanding anything expressly stated in the Code, no Covered Securities may be purchased or sold by any Employee if such purchase or sale is effected with a view to making a profit from a change in the price of such security resulting from anticipated transactions by or for a Client.

3.5

Maximum Trades and Trade Requests per Quarter

An Employee may execute a maximum of fifty (50) trades per calendar quarter. There is currently no maximum limitation on the number of trade requests that an Employee may submit per calendar quarter. The Code grants the General Counsel or CCO the power to impose a further limitation on any Employee with respect to the number of trades or number of requests if it is believed to be in the best interest of the Company or its Clients.

3.6

Trading / Black-Out Periods

3.6.1

No Employee may acquire or dispose of Beneficial Ownership in a Covered Security (other than an Excepted Security) that MacKay is purchasing or selling for any Client or proposes to purchase or sell for any Client where such transaction would in any way conflict with or be detrimental to (or appear to conflict with or be detrimental to) the interest of the Client;

3.6.2

No Employee may acquire or dispose of Beneficial Ownership in a Covered Security (other than an Excepted Security) on a day when there is a Pending Buy or Sell Order in that security for a Client until such order is executed or withdrawn.

3.6.3

No Employee may acquire or dispose of Beneficial Ownership in a Covered Security (other than an Excepted Security) if any purchase or sale of such security has been made for a Client account in the prior seven calendar days or can reasonably be anticipated for a Client account in the next seven calendar days.

3.7

Considerations and Exceptions to Trading/Blackout Period

3.7.1

In evaluating whether any purchase or sale of such securities can “reasonably be anticipated for a Client account in the next seven calendar days”, the following factors shall be considered:

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Whether the Employee transacted in a type or specific security in which his or her product area has invested or may invest;

•

Whether there were changed circumstances involving the market, the type or the specific security or the Client’s account;

•

Whether the Employee was aware of any information concerning an actual or contemplated investment in that same security by MacKay for any Client account; and

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Whether the Client account was managed by the Employee’s product area.

3.7.2

Exceptions may be granted to the blackout period set forth in paragraph 3.6.3 above in the event that the contemplated transaction involves:

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500 shares or less in the aggregate and the issuer has market capitalization (outstanding shares multiplied by the current market price per share) greater than $5 billion;

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the smaller of 500 shares or less in the aggregate or less than .001% of the issuer’s market capitalization, if the issuer has market capitalization (outstanding shares multiplied by the current market price per share) less than $5 billion; or

•

investment grade debt instruments of less than $100,000 par value.

3.8

Use of Brokerage for Personal or Family Benefit

No securities trades in which the Employee has a direct or indirect Beneficial Ownership interest may be effected through MacKay’s traders. Employees must effect such trades through their personal broker-dealers. In addition, no Employee may, for direct or indirect personal or a family member’s benefit, execute a trade with a broker-dealer by using the influence (implied or stated) of MacKay or any Employee’s influence (implied or stated) with MacKay.

3.9

Initial Public Offerings

No Employee may directly or indirectly acquire Beneficial Ownership in any securities in an Initial Public Offering of securities except with the express written prior approval of the General Counsel or CCO.

3.10

Private Placements

No Employee may directly or indirectly acquire Beneficial Ownership in an offering of securities in a Private Placement except with the express written prior approval of the General Counsel or CCO. Any Employee who has obtained prior approval and made an investment in a Private Placement must disclose that investment if that Employee plays a part in any subsequent consideration of an investment in the issuer on behalf of Client accounts. Under such circumstances, MacKay’s decision to purchase securities of the Private Placement issuer will be subject to an independent review by investment personnel with no investment in the issuer.

3.11

Short-Term Trading/Sixty Day Holding Period

No Employee shall purchase and sell (or exchange), or sell and purchase (or exchange) the same (or equivalent) Covered Security within sixty (60) calendar days. The 60-day holding period is measured from the time of the most recent trade of shares of the relevant Covered Security by the Employee. Exceptions may be made in cases of death or disability, or under other special circumstances if approved in advance by the General Counsel or CCO.

Notwithstanding the above, an Employee who receives a grant of options through an Employee Stock Option Plan, who chooses to exercise those options in a Cashless Exercise, will be allowed an exception from the sixty-day holding period, so long as such transactions are precleared as required under Section 3.1.

3.12

Other Exceptions

The restrictions with respect to: Section 3.3 Restricted List, Sections 3.6 Trading/Black-out Periods, and Section 3.11 Short-term trading do not apply to the following transactions:

•

in Discretionary Managed Accounts;

•

by employees of New York Life Insurance Company or New York Life Investment Management LLC who are members of the Board of Managers of MacKay, who do not have access to information about MacKay’s purchases and sales of securities;

•

that are non-volitional in nature: e.g. stock splits, stock dividends, exchanges and conversions, mandatory tenders, pro-rata distributions to all holders of a class of securities, gifts, inheritances, and margin/maintenance calls (where the securities to be sold are not directed by the covered person);

•

automatic purchases under DRIPs, ESPPs or similar accounts;

•

any transactions in ETFs representing shares of a market index and which consists of a minimum of 30 securities, commodity, currency and treasury ETF’s;

•

in securities that are Excepted Securities;

•

purchases or sales with respect to Affiliated Fund shares of a taxable or tax-exempt money market fund;

•

futures and forward contracts on direct obligations of the government of the United States, a market index consisting of a minimum of 30 securities, commodity and currency

•

sales that are part of an automatic withdrawal plan or program, including loans, withdrawals and distributions from 401(k) plans or programs;

•

in government-sponsored enterprises fixed income securities (FNMA, FHLMC); or

•

in municipal auction rate securities (“ARS”) with short-term coupon resets (e.g. 7 day) and closed-end municipal auction rate “Preferred” shares.

3.13

Affiliated Fund Shares

The following provisions apply to all Affiliated Fund Shares held by an Employee, including, but not limited to, shares owned through a 401(k) plan or similar account, or through a variable insurance product.

No Employee shall purchase and sell (or exchange), or sell and purchase (or exchange), shares of the same Affiliated Fund of which such Employee has a Beneficial Ownership interest within sixty (60) days. The 60-day holding period is measured from the time of the most recent trade of shares of the relevant Affiliated Fund by the Employee. Waivers of this requirement may be granted in cases of death or disability, or under other special circumstances by the General Counsel or CCO. None of the above-specified restrictions on short-term trading in Affiliated Fund shares shall apply to the following transactions:

•

Purchases or sales effected in any account over which the Employee has no direct or indirect influence or control (for example, blind trusts or Discretionary Managed Accounts);

•

Purchases or sales that are non-volitional on the part of the Employee;

•

Purchases that are effected as part of an automatic DRIP, an automatic investment plan, a payroll deduction plan or program (including, but not limited to, automatic payroll deduction plans or programs and 401(k) plans or programs (both employee initiated and/or employer matching)), an ESPP, or other automatic stock purchase plans or programs;

•

Sales that are part of an automatic withdrawal plan or program, including loans, withdrawals and distributions from 401(k) plans or programs; or

•

Purchases or sales with respect to Affiliated Fund Shares of a taxable or tax-exempt money market fund.

3.14

Preclearance of Accounts

No Employee may open an account with any broker, dealer or bank that will hold Covered Securities of which the Employee has a direct or indirect Beneficial Ownership interest without the prior written approval of Legal/Compliance. Requests to open such accounts shall be made in substantially the form of Exhibit D .

With respect to any accounts holding Covered Securities in which an Employee has a direct or indirect Beneficial Ownership interest, each Employee who is a Supervised Person may only use a broker, dealer or bank (the last only with respect to bank accounts used substantially as brokerage accounts) that complies with the electronic transmission requirements set forth in Section 4.6, below.

4.	Recordkeeping and Reporting Requirements

4.1

Privacy Statement

MacKay recognizes the sensitivity and personal nature of information collected under the Code, and the interests of Employees in maintaining their privacy regarding this information. MacKay’s Legal/Compliance personnel will take all necessary steps designed to ensure that all reports disclosing personal securities holdings, requests for preclearance of transactions and other information filed by Employees under the Code will be treated as confidential, subject only to the review by Legal/Compliance and the Compliance Committee provided in the Code or forms thereunder and review by the SEC and other regulators and to the extent necessary to provide required reports to clients and their representatives.

4.2

Initial Holdings and Account Reports

At the time of becoming an Employee, but in no case later than 10 days from the Employment Date, every new Employee shall submit to Legal/Compliance, a report in substantially the form of Exhibit E , disclosing every Covered Security and Affiliated Fund in which that Employee has a direct or indirect Beneficial Ownership interest as of the Employment Date. The holdings information must be current as of a date no more than 45 days prior to the Employment Date.

At the same time, new Employees must also disclose all broker, dealer or bank accounts in which any securities (whether or not they are Covered Securities or Affiliated Fund Shares) as to which the Employee has any Beneficial Ownership interest are held, in a report in substantially the form of Exhibit F . Such accounts include Discretionary Managed Accounts (e.g., wrap accounts), in which case the Employee must certify, in a report substantially in the form of Exhibit G , that he or she has no direct or indirect influence or control over the selection or disposition of securities and no prior knowledge of transactions therein. Within 30 days of their Employment Date, new Employees are required to move such accounts holding Covered Securities to a broker, dealer or bank (the last only with respect to bank accounts used substantially as brokerage accounts) that complies with the electronic transmission requirements set forth in Section 4.6, below.

Additionally, each new Employee shall file a report in substantially the form of Exhibit H , indicating that the Employee has received, read, understood and will comply with the Code and the Related Policies.

4.3

Quarterly Transactions and Account Reports

Every Employee shall file with Legal/Compliance a report within 30 calendar days following the end of each calendar quarter reflecting all transactions in any Covered Security and Affiliated Fund ² in which an Employee has, or by reason of such transaction acquires or disposes of, any Beneficial Ownership interest, or, alternatively, must confirm that there were no such transactions in the applicable calendar quarter. Such report shall be in substantially the form of Exhibit I .

At the same time, Employees must also disclose all broker, dealer or bank accounts in which any securities (whether or not they are Covered Securities or Affiliated Fund Shares) as to which the Employee has any Beneficial Ownership interest are held, in a report in substantially the form of Exhibit F . Such accounts include Discretionary Managed Accounts (e.g., wrap accounts), in which case the Employee must certify, in a report substantially in the form of Exhibit G , that he or she has no direct or indirect influence or control over the selection or disposition of securities and no prior knowledge of transactions therein.

4.4

Annual Reporting

At the end of each calendar year, but in no case later than January 30 ^th of the following year, every Employee shall submit to Legal/Compliance, a report disclosing every Covered Security and Affiliated Fund in which that Employee has a direct or indirect Beneficial Ownership interest as of year-end. The report shall be substantially in the form of Exhibit E . Employees must also disclose all broker, dealer or bank accounts in which any securities (whether or not they are Covered Securities or Affiliated Fund Shares) as to which the Employee has any Beneficial Ownership interest are held. The report shall be substantially in the form of Exhibit F . In the event such accounts include Discretionary Managed Accounts, the Employee shall also include a certification substantially in the form of Exhibit G .

In addition, each Employee shall file annually substantially in the form of Exhibit J a certification indicating that the Employee has received, read, understood and complied with the Code and the Related Policies.

4.5

Electronic Reporting and Certifications

With advance notice from Legal/Compliance, reports and certifications required to be filed by an Employee shall be made between the hours of 8:00 and 11:00 AM using MacKay’s automated personal trading system (http://mscch/itrade/itrade.asp). In the event that such automated system is unavailable, Employees will be advised to use the paper forms of reports as provided as Exhibits to this Code.

²	Legal/Compliance receives information on transactions in certain Affiliated Fund Shares held through the Company’s 401(k) plan directly from the Company’s 401(k) plan administrators. Therefore, reporting relating to these transactions need not be provided directly from the Employee.

4.6

Duplicate Confirmations

Each Employee shall provide Legal/Compliance with sufficient information in Exhibit F so that Legal/Compliance can arrange for prompt filing by the broker, dealer and bank (where the bank account is used substantially as a brokerage account) with the CCO of duplicate confirmations of all trades of Covered Securities and quarterly account statements. The duplicates shall be mailed to MacKay at the applicable address listed in Exhibit K hereto.

With respect to any accounts holding Covered Securities as to which the Employee has any Beneficial Ownership interest, each Supervised Person may only use a broker, dealer or bank (the last only with respect to bank accounts used substantially as brokerage accounts) that will electronically transmit duplicate monthly statements and trade confirmations to MacKay’s automated personal trading system. This requirement does not apply to:

•

Discretionary Managed Accounts

•

401k accounts

•

DRIPs

•

ESPPs

4.7

Reporting of Code Violations

Each Employee shall promptly notify the General Counsel or CCO of any violation of the Code.

4.8

Recordkeeping

MacKay is required under the Investment Advisers Act of 1940, as amended, and the Investment Company Act to keep records of certain transactions in which its Employees have direct or indirect Beneficial Ownership.

Legal/Compliance must maintain all records relating to compliance with the Code, such as preclearance requests, exception reports, other internal memoranda relating to non-compliant transactions, and preclearance records, records of violations and any actions taken as a result thereof, written acknowledgements, and the names of Employees for a minimum period of five years. Acknowledgements of the Code will be maintained for five years after the individual ceases to be an Employee.

5.	Administration

5.1

Mutual Fund Codes of Ethics

Certain Employees may owe a specific duty of care to each mutual fund Client based on the Employee’s status as an Access Person of that mutual fund. It has been determined that each Employee’s compliance with the Company’s Code will also satisfy the requirements of Rule 17j-1 of the Investment Company Act as well as any mutual fund that the Company currently advises or sub-advises.

5.2

Sanctions

Upon discovering a violation of the Code, MacKay shall take whatever remedial steps it deems necessary and available to correct an actual or apparent conflict. Following those corrective efforts, the CCO, in consultation with the General Counsel, may impose sanctions if, based upon all of the facts and circumstances considered, such action is deemed appropriate. The magnitude of these penalties varies with the severity of the violation, although repeat offenders will likely be subjected to harsher punishment. These sanctions may include, among others, oral or written admonishments, trade reversals, disgorgement of profits, monetary fines, suspension or termination of personal trading privileges, adverse employment action, adverse compensation action and employment suspension or termination. It is important to note that violations of the Code may occur without employee fault (e.g., despite preclearance). In those cases, punitive action may not be warranted, although remedial steps may still be necessary.

Factors to be considered during any review of circumstances underlying a violation may include but are not limited to:

•

Whether the act or omission was intentional or volitional;

•

Whether mitigating or aggravating factors existed;

•

The person’s history of prior violations of Company policy;

•

The person’s cooperation, acknowledgement of transgression and demonstrable remorse;

•

The person’s position and responsibilities within the Company;

•

Whether the employee is deemed to be an Access Person, Advisory Person or Investment Personnel of a mutual fund as defined by Rule 17j-1 of the Investment Company Act;

•

Whether the person transacted in the same security in which his/her product area has invested or could invest;

•

Whether the person was aware of any information concerning an actual or contemplated investment in that same security for any Client account;

•

Whether the Client account was managed by the Employee’s product area; and

•

Whether the price at which the personal securities transaction was effected was more advantageous than the price at which the client transaction in question was effected.

5.3

Monitoring and Review

Legal/Compliance, using automated systems and other methods, conducts reviews of all personal securities transactions and holdings reports with a view towards determining whether Employees have complied with all provisions of the Code. Legal/Compliance is responsible for developing and maintaining more detailed standard operating procedures around daily monitoring to detect and prevent violations of this Code.

The General Counsel or CCO will undertake a quarterly review with respect to the Code to verify that the Code is being followed. The results of this review will be set forth in a quarterly summary report to MacKay’s Compliance Committee. The report shall specify any related concerns and recommendations and be accompanied by appropriate exhibits.

5.4

Acknowledgment and Training

Each Employee must certify at the time of becoming an Employee and annually thereafter, in substantially the form of Exhibit H and Exhibit J , as applicable, that he or she has read and understood, is subject to and has complied with the Code and the Related Policies. Each Employee must attend a Code of Ethics training session conducted by Legal/Compliance within a reasonable time period upon becoming an Employee. Legal/Compliance is available to all Employees at all times for questions as to the application of this Code.

5.5

Exceptions

The General Counsel or CCO may grant written exceptions to provisions of the Code in circumstances that present special hardship or special situations determined not to present potential harm to Clients or conflict with the spirit and intent of the Code. The exceptions may be granted to individuals or classes of individuals with respect to particular transactions, classes of transactions or all transactions. Exceptions shall be structured to be as narrow as is reasonably practicable with appropriate safeguards designed to prevent abuse of the exception.

Exhibits


Exhibit A		Conflicts of Interest Questionnaire

Exhibit B		Conflicts of Interest Quarterly Certification

Exhibit C		Personal Securities Trading Preclearance Request Form

Exhibit D		Account Preclearance Request Form

Exhibit E		Employee Initial/Annual Securities Holdings Report and Certification

Exhibit F		Brokerage Account Certification Form

Exhibit G		Discretionary Managed Account Certification

Exhibit H		Acknowledgement of Receipt of the Code of Ethics and Related Policies

Exhibit I		Quarterly Transactions Report

Exhibit J		Annual Certification of Compliance With the Code of Ethics and Related Policies

Exhibit K		Address for Duplicate Confirmations and Statements

Exhibit A

Conflicts of Interest Questionnaire


		NAME:

		TITLE:

Please list any officership, directorship, trusteeship or material employment that you (or any member of your Immediate Family, ³ hold in any corporations, associations, charitable or religious organizations, schools, partnerships or companies (including, without limitation, any publicly traded companies) or in any affiliates of MacKay Shields LLC (the “Company”). If you do not have any, please insert “NONE” below.

(a) Please list any material financial interest (that is, to your knowledge an ownership interest equal to or greater than 1% of such entity or 10% of your (or your Immediate Family member’s) total net worth (hereinafter referred to as a “Material Interest”) you (or any such Immediate Family member) may have in any business unit which you know is a supplier of or soliciting orders for sales or services to the Company or its affiliates. If you do not have any, please insert “NONE” below.

(b) Please list any Material Interest you (or member of your Immediate Family) may have in any business unit which you know is doing business with the Company or its affiliates, other than suppliers referred to above. If you do not have any, please insert “NONE” below.

3.	Please list any Material Interest you (or member of your Immediate Family) may have in any corporations, associations, partnerships or companies. If you do not have any, please insert “NONE” below.

Please list the names (not amount of the holdings) of any corporations, associations, partnerships or companies in which you (or any member of your Immediate Family) have a Material Interest and in which, to your knowledge, the Company or its affiliates or clients has an investment. If you do not have any, please insert “NONE” below.

For the purposes of this Questionnaire, “Immediate Family” means any of the following relatives: child, stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, sister-in-law, including adoptive relationships. The term also includes: (i) any member of your household; (ii) any unrelated individual whose investments are controlled and whose financial support is materially contributed to by you; and (iii) “significant others”.

Please list the names of any corporations, associations, partnerships, companies or business units in the following categories in which you (or any member of your Immediate Family) may have a Material Interest. (The amount of holding or the number of shares of stock need not be listed.) If you do not have any, please insert “NONE” below.

(a) Any investment advisor, investment banking firm, brokerage firm or other business unit other than affiliates. (Do not include brokerage or similar accounts or investments in mutual funds.)

(b) Any company in which to your knowledge the Company or a client or an affiliate has an investment.

(c) Any company, other than affiliates, whose principal business is the issuance and sale of life insurance, annuities or accident and health insurance policies, or the provision of financial or health services or products (including any life insurance or health insurance agency, brokerage or insurance consultant firm). Do not include interests in policies, annuities or health insurance contracts.

(d) Any mortgage loan correspondent of any affiliate or any other concern engaged primarily in the business of buying, selling or servicing real estate mortgages. (Do not include mortgages upon property owned by you, or personal investments in real estate investment trusts.)

Please list (i) the names of any business firms in which you (or a member of your Immediate Family) have a Material Interest and which have property which to your knowledge is subject, in whole or in part, to a real estate mortgage held by the Company, its affiliates or the Company’s employees, officers or members of its board of directors and (ii) any of your (or your dependent relative’s) financial liabilities, including with respect to real estate to the Company, its affiliates or the Company’s employees, officers or members of its board of directors. If you do not have any, please insert NONE below.

7.	Please list or summarize any financial interest you (or any member of your Immediate Family), have which, in your opinion, affects or might appear to affect adversely the discharge of your duties and responsibilities to the Company. If you do not have any, please insert “NONE” below.

Please list the names of any member of your Immediate Family who are employed or affiliated with a broker-dealer firm, including a description of their position and the name of the broker-dealer, and whether the individual of her/her department provides any services to the Company. In addition, please indicate whether the individual is a “registered representative” of such broker-dealer.

The undersigned has complied with and will comply with the “Employee Personal Political Contributions and Activities Policy and Procedures” and has obtained the requisite pre-clearance before making any political contribution in a covered jurisdiction and has disclosed or reported all information required to be disclosed or reported pursuant to the Policy.

If a material change occurs in any matters reported in this Questionnaire or new circumstances are discovered evidencing any conflict of interests or other deviations from the Company’s Code of Ethics, the undersigned hereby undertakes promptly to file with the General Counsel an appropriate amendment or supplement to this Questionnaire until it is superseded by the next completed Annual Questionnaire.


Date:
				(Signature)


				(Name)


				(Title)

If any of the spaces allocated above are insufficient, please attach a complete list following this signature page.

Exhibit B

Conflicts of Interest Quarterly Certification

In connection with any purchases or sales of securities for clients during the quarter, I disclosed to MacKay Shields LLC any material interests in my personal securities which might reasonably have been expected to involve a conflict with the interests of clients.

The names and affiliations of my Immediate Family who either reside with, or are financially dependent upon, or whose investments are controlled by me and who are employed in the securities or commodities industries and who might be in a position to benefit directly or indirectly from the activities or knowledge of MacKay Shields’ personnel in the discharge of their duties are as follows:


Names		Affiliations


Date:		Signature:

Exhibit C

Personal Securities Trading Preclearance Request Form

NAME:

•

Trades must be made on the same day that approval is received.

•

On small cap or illiquid securities where extra time is needed, advance approval by the General Counsel or Chief Compliance Officer is required.

NOTES

BROKERAGE
ACCOUNT

SECURITY
TYPE

NAME OF
SECURITY

# OF SHRS, PRINCIPAL
AMOUNT, ETC.

APPROX
PRICE

SYMBOL
OR
CUSIP #

PURCHASE (P)
SALE (S)

The person indicated above has stated and represents that:

he/she has no insider information relating to the above referenced issuer(s);

there is no conflict of interest in these transactions with respect to client portfolios (IF A CONFLICT OF INTEREST EXIST, PLEASE CONTACT THE LEGAL/COMPLIANCE DEPARTMENT IMMEDIATELY.); and these securities are not initial public offerings or private placements.

Exhibit D

Account Preclearance Request Form


NAME:



General Counsel/Chief Compliance Officer:

Initials:



APPROVED		¨

DISAPPROVED		¨

Broker, Dealer or Bank:



Name of Firm:



Address:

Name on Account:



Relationship to Employee:

Exhibit E

Employee Initial/Annual Securities Holdings Report and Certification

As of Date: / /20

Employee Last Name, First (Telephone Ext.)


Ticker	Security type Code	Cusip	Security Name	Quantity


Brokerage Account: Employee First and Last Name		Account Number: ( )

I certify that the Reportable Securities listed above (including “Reportable Funds”, that is mutual funds advised by MacKay Shields or an affiliate) are the only such securities in which I have a direct or indirect Beneficial Interest.



		Signature				Date

Exhibit F

Brokerage Account Certification Statement

Employee Last Name, First (Telephone Ext.)

I certify that the above reflects all accounts (including brokerage accounts and bank accounts used substantially as brokerage accounts) that have been opened or closed with respect to Reportable Securities in which I have a direct or indirect Beneficial Interest (note that this includes the account name and number of discretionary accounts, 529 plans, 401(k) accounts, Mutual Fund accounts, automatic investment plans and dividend reinvestment plans).



		Signature				Date

Exhibit G

Discretionary Managed Accounts Certification

I hereby certify that during the reporting period I have had no influence or control over any investment decisions made in my discretionary managed account(s) and that the account is solely managed by a Registered Investment Adviser (“RIA”) or employee of a RIA.

Signature

Name

Position

Date

Account Name

Account Number

Exhibit H

Acknowledgement of Receipt of the Code of Ethics and Related Policies

The undersigned hereby certifies that:

(i) The undersigned has received and reviewed a copy of MacKay Shields LLC Code of Ethics and the Related Policies, which Related Policies currently include the following:

•

Gifts and Entertainment;

•

Information Barrier Policy and Procedures;

•

Information Security and Privacy Policy;

•

Insider Trading Policy and Procedures;

•

Policy on Anti-Corruption in International Business Transactions;

•

Employee Personal Political Contributions and Activities Policy and Procedures;

•

Policy on Selective Disclosure of Mutual Fund Portfolio Holdings;

•

Restricted List;

•

Watch List;

•

CFA Code of Ethics and Standards of Professional Conduct (with respect to Employees who are Chartered Financial Analysts)

(ii) The undersigned understands the requirements contained therein and recognizes that the undersigned is subject to the Code of Ethics and Related Policies; and

(ii) The undersigned has complied with and will comply with the Code of Ethics and Related Policies and has disclosed or reported all information required to be disclosed or reported pursuant to the Code of Ethics and the Related Policies.

(iii) The undersigned authorizes MacKay to furnish the information contained in any report filed by the individual to such federal and state agencies and to the Trustees/Directors of any mutual fund to which MacKay is the investment manager, investment adviser or sub-adviser and to clients and their representatives and as may be required or requested by law or applicable rules and regulations, on the understanding that, except for the foregoing and such requirements, the information contained in such reports shall be treated as confidential and disclosed to no one outside of MacKay without the consent of the individual submitting the report.

Signature

Print Name

Date

Exhibit I

Quarterly Transactions Report

Employee Last Name, First (Telephone Ext.)


Trans. Type	Ticker	Security Name	Trade Date	Quantity	Price


Account Number:						Broker:

I certify that the above represents all transactions in Reportable Securities of which I have a direct or indirect Beneficial Interest except for transactions in Reportable Funds sponsored by an affiliate of New York Life Insurance Company and held in MacKay Shields’ 401(k) plan.

Reportable Securities are almost every type of investment, including private placements and hedge funds. However, Reportable Securities do not include direct obligations of the U.S. Government, bank CDs and mutual funds not affiliated with MacKay Shields – see definition in the Personal Investment Policy for the complete description. Note also that no information need be provided for securities held in an account over which you have no direct or indirect influence or control. Some examples include discretionary management accounts, automatic investment plans and dividend investment plans and dividend reinvestment plans.



		Signature				Date

Exhibit J

Annual Certification of Compliance with the Code of Ethics and Related Policies

I hereby certify that I have received and reviewed a copy of the MacKay Shields LLC Code of Ethics and the Related Policies, which Related Policies currently include the following:

•

Gifts and Entertainment;

•

Information Barrier Policy and Procedures;

•

Information Security and Privacy Policy;

•

Insider Trading Policy and Procedures;

•

Policy on Anti-Corruption in International Business Transactions;

•

Employee Personal Political Contributions and Activities Policy and Procedures;

•

Policy on Selective Disclosure of Mutual Fund Portfolio Holdings;

•

Restricted List;

•

Watch List;

•

CFA Code of Ethics and Standards of Professional Conduct (with respect to Employees who are Chartered Financial Analysts).

I further certify that I am subject to the Code of Ethics and the Related Policies and have complied with all the requirements set forth therein.

Signature

Print Name

Date

Exhibit K

Address For Duplicate Confirmations and Statements

Chief Compliance Officer

MacKay Shields LLC

9 West 57 ^th Street

New York, NY 10019

Exhibit (q)(1)

COLUMBIA FUNDS SERIES TRUST

COLUMBIA FUNDS MASTER INVESTMENT TRUST, LLC

COLUMBIA FUNDS VARIABLE INSURANCE TRUST I

COLUMBIA FUNDS SERIES TRUST II

(each a “Registrant”)

POWER OF ATTORNEY

The undersigned does hereby constitute and appoint J. Kevin Connaughton, Michael G. Clarke, Scott R. Plummer, Christopher O. Petersen, Michael E. DeFao, Ryan C. Larrenaga, Paul B. Goucher, Joseph D’Alessandro, Robert M. Kurucza and Marco E. Adelfio, each individually, his or her true and lawful attorney-in-fact and agent (each an “Attorney-in-Fact”) with power of substitution or resubstitution, in any and all capacities, including without limitation in the undersigned’s capacity as trustee of each Registrant, in the furtherance of the business and affairs of each Registrant: (i) to execute any and all instruments which said Attorney-in-Fact may deem necessary or advisable or which may be required to comply with the Securities Act of 1933, the Investment Company Act of 1940, the Securities Exchange Act of 1934 (together the “Acts”) and any other applicable federal securities laws, or rules, regulations or requirements of the U.S. Securities and Exchange Commission (“SEC”) in respect thereof, in connection with the filing and effectiveness of each Registrant’s Registration Statement on Form N-1A regarding the registration of each Registrant or its shares of beneficial interest, and any and all amendments thereto, including without limitation any reports, forms or other filings required by the Acts or any other applicable federal securities laws, or rules, regulations or requirements of the SEC; and (ii) to execute any and all federal, state or foreign regulatory or other required filings, including all applications with regulatory authorities, state charter or organizational documents and any amendments or supplements thereto, to be executed by, on behalf of, or for the benefit of, each Registrant. The undersigned hereby grants to each Attorney-in-Fact full power and authority to do and perform each and every act and thing contemplated above, as fully and to all intents and purposes as the undersigned might or could do in person, and hereby ratifies and confirms all that said Attorneys-in-Fact, individually or collectively, may lawfully do or cause to be done by virtue hereof.

[REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY]

This Power of Attorney shall be revocable with respect to an undersigned at any time by a writing signed by such undersigned and shall terminate automatically with respect to a Registrant if the undersigned ceases to be a trustee of the Registrant.

Dated: May 1, 2010

/s/ Edward J. Boudreau, Jr.

Edward J. Boudreau, Jr.

/s/ William P. Carmichael

William P. Carmichael

/s/ William A. Hawkins

William A. Hawkins

/s/ R. Glenn Hilliard

R. Glenn Hilliard

/s/ John J. Nagorniak

John J. Nagorniak

/s/ Anthony M. Santomero

Anthony M. Santomero

/s/ Minor M. Shaw

Minor M. Shaw

Exhibit (q)(2)

COLUMBIA FUNDS SERIES TRUST

COLUMBIA FUNDS MASTER INVESTMENT TRUST, LLC

COLUMBIA FUNDS VARIABLE INSURANCE TRUST I

COLUMBIA FUNDS SERIES TRUST II

(each a “Registrant”)

POWER OF ATTORNEY

The undersigned does hereby constitute and appoint Scott R. Plummer, Christopher O. Petersen, Michael E. DeFao, Ryan C. Larrenaga, Paul B. Goucher, Joseph D’Alessandro, Robert M. Kurucza and Marco E. Adelfio, each individually, his true and lawful attorney-in-fact and agent (each an “Attorney-in-Fact”) with power of substitution or resubstitution, in any and all capacities, including without limitation in the undersigned’s capacity as president of each Registrant, in the furtherance of the business and affairs of each Registrant: (i) to execute any and all instruments which said Attorney-in-Fact may deem necessary or advisable or which may be required to comply with the Securities Act of 1933, the Investment Company Act of 1940, the Securities Exchange Act of 1934 (together the “Acts”) and any other applicable federal securities laws, or rules, regulations or requirements of the U.S. Securities and Exchange Commission (“SEC”) in respect thereof, in connection with the filing and effectiveness of the Registrant’s Registration Statement on Form N-1A regarding the registration of each Registrant or its shares of beneficial interest, and any and all amendments thereto, including without limitation any reports, forms or other filings required by the Acts or any other applicable federal securities laws, or rules, regulations or requirements of the SEC; and (ii) to execute any and all federal, state or foreign regulatory or other required filings, including all applications with regulatory authorities, state charter or organizational documents and any amendments or supplements thereto, to be executed by, on behalf of, or for the benefit of, each Registrant. The undersigned hereby grants to each Attorney-in-Fact full power and authority to do and perform each and every act and thing contemplated above, as fully and to all intents and purposes as the undersigned might or could do in person, and hereby ratifies and confirms all that said Attorneys-in-Fact, individually or collectively, may lawfully do or cause to be done by virtue hereof.

[REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY]

This Power of Attorney shall be revocable with respect to an undersigned at any time by a writing signed by such undersigned and shall terminate automatically if the undersigned ceases to be an officer of the Registrant.

Dated: May 1, 2010

/s/ J. Kevin Connaughton

J. Kevin Connaughton